“Every single great idea that has marked the 21st century, the 20th century and the 19th century has required government vision and government incentive,” he said. “In the middle of the Civil War you had a guy named Lincoln paying people $16,000 for every 40 miles of track they laid across the continental United States. … No private enterprise would have done that for another 35 years.”
“Every” is a very, very broad word but before we jump into examples we should address Biden’s reference to the building of transcontinental railways.
It’s worth noting that the only transcontinental railway to survive without government subsidies or land grants, and without going into bankruptcy, was the Great Northern Railroad built by James J. Hill (full disclosure: I went to Jim Hill Middle School here in Minot, ND). More, via Cato:
In January 1893, the Great Northern Railway completed its route from St. Paul to Seattle without any land grants (except a small grant to a predecessor railroad) or other federal or state subsidies. The railway competed directly with the Northern Pacific, and to some extent with the Union Pacific, which served some of the same territory. The Great Northern’s builder, James J. Hill, knew that the other railroads had been built primarily for the subsidies, and as a result, they were poorly engineered and often followed circuitous routes. Hill built the Great Northern along the most direct route his engineers could find, so his operating costs were far lower than competitors’.
When the economic crash of 1893 took place a few months later, the Northern Pacific, Union Pacific, and almost all other western railroads went into receivership…Many people predicted that the Great Northern would not be able to compete and would follow the others into bankruptcy. But Hill managed to stay out of receivership, and the Great Northern remained the only transcontinental built in North America without government subsidies that never went bankrupt.
By 1930, American railroad mileage peaked at about 260,000 miles…only 18,700 of these miles were built with land grants or other federal subsidies.
Going beyond railroads, we can talk about Henry Ford’s invention of the automobile and the innovation of the assembly line at his manufacturing plants. Nikola Tesla and Thomas Edison, both scientists and entrepreneurs working in the private sector, were rival advocates for the use of different forms of electricity (DC vs AC). Edison’s light bulb was the result not of government subsidy but of private investment and vision.
Amazon.com revolutionized online retail with private investment. Walmart revolutionized “brick and mortar” retail with private investment.
We could cite some examples where government-funded research has resulted in breakthroughs and innovations, but by and large the driving force behind every significant technological and economic advancement in the history of this country has been the free flow of capital.
Politicians like Biden, who are so vain as to want to attribute all the good things in the world to themselves, may spout their history revisionism to their heart’s content. But government’s role in the private sector is almost always to slow innovation and advancement not facilitate it.
Government, above a certain level, is a burden rather than a boon.