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What is Not Seen

Mises Daily: Tuesday, June 12, 2001 by

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TVA in constructionThe idea of freedom has always had its critics, those who believe that coercive force is required for society to flourish and that the rule of law needs to be supplemented by proactive government policies.

Michael Kelly, editor of The Atlantic Monthly magazine and a very fine writer–thinker on many fronts, has offered his own criticism of the free-market thesis, and it is worth quoting before scrutinizing it, given how attractively he puts the point. (Read his article). If you think that it is private individuals, working in voluntary cooperation, who make good things happen, Kelly offers this response:

This is mostly myth. If we look at the great moments in innovation, the developments that changed everything, we almost always find that the private geniuses did their bit, but the great clumsy, heavy hand of government is frequently what turned that bit into a new way of life. Ford gave us the cheap car, but Eisenhower gave us the interstate. Edison gave us the light bulb, but the TVA wired the farms. Most of the great advances in flight, and all the advances in space flight, have their origins of government, specifically military, work. So, too, with the Internet, which rose out of the government’s ARPANET system. It was government that linked America’s coasts by rail, government that constructed the Panama Canal, government that built all the really big stuff. The revolution in flight . . . came about not only because of the work of private geniuses but also because a bunch of bureaucrats at NASA pushed it, and because those bureaucrats were lucky to have had as their boss since 1992 an engineer named Daniel Goldin. . . .

Much of what Kelly tells us here is quite true, of course, but is it the whole story? Anyone who is even slightly familiar with the history of economic thought will have doubts about that. To start with, there is Frederick Bastiat’s famous thesis, presented in his essay, "What is Seen and What is Not Seen." What governments do often takes center stage on the historical and reportorial scene, but Bastiat shows that it is folly to forget that such doings displace a lot else that might have happened, had government not done its grand deed.

But there is more. What must be kept in mind is that governments make people do what they would not otherwise want to do themselves. More importantly, people may well want to do something other than what government wants done—that is, what those in power, be they the majority or some elite or a single ruler, want to have done.

Without going through this elementary material again, let us just look at some of what Kelly says is a credit to government. Consider Eisenhower and the interstate. It gave a very serious boost to the automobile, yes, but it very likely suppressed the development of alternative—and probably much more environmentally friendly—modes of transportation. It redistributed wealth that otherwise might have been used for private roads placed in better locations and managed in ways that might have been more efficient.

Or consider TVA, which basically has been discredited as the great help to farmers its champions would have wanted us to think. And, of course, its environmental impact is now estimated to have been devastating. The costs of the private include alternative use of the farmland that had to be flooded to make it. The ARPANET system, meanwhile, did give rise to the Internet, but, as many historians argue, that was of minimal significance. We don’t know whether the 'Net might actually be faster and work better without the initial government program.

As to the rail system that government has subsidized from one end of the continent to the other, it has produced massive monopolies that were later used to justify antitrust legislation and that have run roughshod over private farming across the country. I need say little about the fiasco that the Panama Canal arguably has been, politically and even economically, given what might have been done instead.

The story is the same in all these cases, including the flight industry, where government airports have been the source of much consternation—both for environmentalists and for those with different visions as to how that industry might and should have developed.

These are not all bad programs. The question is: What did they cost, and what might have been in their absence? There can be no final answer. The bottom line is this: Governments use force to accomplish their goals, and even when the results are ostensibly grand, it comes at a very high cost—a cost that is both seen and unseen—and often wreaks havoc while being a frontal assault on human dignity as well.

Despite Kelly, it is private individuals working in a voluntary setting of voluntary cooperation who do the most good in the world. When government interferes, most of what results is lamentable relative to the alternative of market-driven projects.

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Tibor R. Machan teaches business ethics at Chapman University and is an adjunct scholar of the Ludwig von Mises Institute in Auburn, Alabama. See his Mises.org Archive or send him MAIL.