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Infrastructure and the State

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This letter of mine [2] appears in today’s edition of the Washington Times:

Upset that Virginians’ taxes were not recently raised to construct more roads, State Delegate Brian J. Moran [3], Alexandria [4] and Fairfax Democrat, declares that “Government has an important role to play in strengthening our infrastructure, developing our economy and creating new jobs” (“Virginia’s transportation conundrum,” Op-Ed, Tuesday).  Not so fast.

Infrastructure that we today naively suppose must be supplied by government has in the past often been supplied by the private sector – supplied so well, indeed, that these private-infrastructure projects helped to spark the Industrial Revolution in 18th-century Britain [5].  Harvard University historian David S. Landes explains:

“At the same time, the British were making major gains in land and water transport.  New turnpike roads and canals, intended primarily to serve industry and mining, opened the way to valuable resources, linked production to markets, facilitated the division of labor.  Other European countries were trying to do the same, but nowhere were these improvements so widespread and effective as in Britain.  For a simple reason: nowhere else were roads and canals typically the work of private enterprise, hence responsive to need (rather than to prestige and military concerns) and profitable to users….  These roads (and canals) hastened growth and specialization.”

Donald J. Boudreaux

The quotation in my letter comes from David Landes’s splendid book The Wealth and Poverty of Nations [6] (1998), pp. 214-215.

The 2002 book The Voluntary City [7] — co-edited by my colleague (and Marginal Revolution [8]‘s) Alex Tabarrok (along with David Beito and Peter Gordon) — offers further historical insight into how markets supply many collective goods.

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