Politicians have recently taken the Obama administration to task for direct involvement (or intervention) in the economy. Congresswoman Michelle Bachmann (R-Mn) claimed in a recent speech that the government has always left the private sector alone "until the last 18 months". A cursory examination of history clearly demonstrates that governments have always controlled, intervened in, or been a direct participant in national and international economies.
The only pattern one can see is a gradual separation between government and business, and that has only been in the last 500 years since the dawn of market capitalism. The United States has been a leader in this disengagement, but the government has always operated in a symbiotic relationship with the private economy. Two industries illustrate this point.
Land and Real Estate
In 1785, Congress passed the Land Act. This law established a grid on the United States and all of its territories. This grid divides the country into blocks of 36 square miles. The law was updated and brought under the Constitution in 1796, and updated under the Homestead Act of 1862.
Under this series of laws, the United States government would declare a territory and take possession of all unclaimed land. An example is the Northwest Territory, declared in 1787. This was divided into Ohio and the Indiana Territory. The government planned canals and then sold the land it had claimed.
At first the property was sold to anyone who could afford it. But over the years the government increasingly regulated the sales to prevent speculation and make sure the land was developed. There was also an effort to open the territory up to as many people as possible to relieve population pressure in the east.
With the Homestead Act, western range land was specifically targeted, leading to the famous Range Wars between homesteaders and cattle ranchers. Another part of the Homestead Act was the creation of land grant colleges such as West Virginia University, which were established and financed with funds generated by western land sales.
The grid has been updated frequently, and was refined using digital technology in the 1990's. The federal government worked with the real estate industry to apply minute precision to property divisions in the United States and Canada. Over the history of the United States, land and real estate has been regulated in a symbiotic relationship between the government, property owners and sellers.
The Transportation Industry
From the time of colonization, the government has developed transportation routes. At first this meant rudimentary dredging of rivers and clearing of paths through forests and fields. This often meant creating paths using eminent domain.
Canals were the first "big" government transportation projects. The Erie Canal is an early example. Shipping by water was heavily subsidized and supported by the government, and protection of port cities such as New Orleans was always a priority of the government.
The railroads greatly benefitted from governmental support. One example was the Gadsden Purchase, which added to the southern Arizona Territory. The land was purchased from Mexico to give the railroads a clear, flat path from El Paso to the Sierra Madre and Los Angeles. When the grid was applied to new territories after the Civil War, preferences were given to railroads.
After World War II, the federal government and state governments worked to develop the interstate highway system. A clear commercial beneficiary of this free network was and is the trucking industry. The auto industry benefitted as well, with easy road access for families and individuals.
Other Industries
Other industries have directly and indirectly benefited from active governmental engagement. The energy industry is a clear example, with the government providing over 50 billion dollars a year to the nuclear power industry. The agricultural industry receives direct and indirect government support as well.
The current discussion concerning the proper government role in private enterprise would benefit from an accurate assessment of the history of that relationship in the past.
Donald Marchand - Currently, I am a teacher. I teach Social Studues at a small school in southern Maryland. But I think I've been a lot more in my life. ...
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