Dane Smith: Public sector key to free enterprise

  • July 29, 2010 - 6:40 PM

The basic premise of Craig Westover's July 25 Opinion Exchange article ("Jobs don't come from government'') -- summed up in his assertion that "government can only tax and consume wealth'' -- is fundamentally erroneous.

Certainly, business and profits are the engine of our prosperity, and it can be argued that sustainable private-sector jobs right now are preferable to more public-sector jobs. But an engine needs a vehicle and a road to drive on, and a safe driver with a license. And from the birth of our nation to this very day, our governments at the federal, state and local levels have helped create the conditions and investment in human and physical infrastructure necessary for progress and prosperity.

Examples are literally everywhere we look. Governments imposed compulsory, universal and "free'' public schooling. Government funding of the Erie Canal helped New York City become the world center of capitalism, and "public improvements'' were integral to Whig and Republican party platforms. Loans and subsidies for railroad development were among the very first actions of our Minnesota state government.

Government "spending'' saved the Falls of St. Anthony from destruction by recklessly competitive private owners, and government was instrumental in financing the dams and millraces that created Minneapolis. Multinational governmental and public university research investment led to the creation of the Internet, and the University of Minnesota developed the taconite process that extended iron mining for decades in northern Minnesota.

Most of the humdrum things our state and local governments do on a daily basis are of enormous value to private businesses. Taxpayer-financed professional educators, who work every year teaching a million Minnesota young people how to read and write and process data and perform quadratic equations, might be the single most valuable contributors to our economic health. Much government funding is absolutely indispensable for business and immediately necessary: rule of law in courts and conflict resolution; public safety; regulatory order from competitive chaos, and public-works systems ranging from sewers to transportation to airports.

Let's praise free enterprise and understand that profits are good and necessary under our system, and that growth provides an abundance that helps the common good. But we shouldn't give countenance to extreme libertarian ideology that is contemptuous of the public sector or that suggests it has little or no value. If it were not for the mostly positive impacts of government, we would not be one of the most prosperous states in the richest and most powerful nation in the world.


The writer is president of Growth & Justice, a think tank focused on economics and state-local tax-and-budget issues.

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