4 ms·

No incentive to take multi million dollar bets would mean most of the achievements of the last 200 years like railroads, airports and airliners, microchips, etc

No incentive to take multi million dollar bets would mean most of the achievements of the last 200 years like railroads, airports and airliners, microchips, etc would have never gotten built.

mrguyorama 3y ago
>Railroads You mean that thing that happened when we gifted huge tracts of lands to a few private businesses so they could pay for the railroads? American railroads were NOT a private investment, but a public one! >airports and airliners Once again, public money during the war, creating the giant B-29 was more expensive than the Manhattan Project! America absolutely pumped cash into any building that claimed they could put out a few screws a week to support the insane amount of war material building we did. The airliner industry was further supported by Cold War warplane development, with bigger planes and bigger jet engines. >microchips Bell telephone had a legal monopoly for several generations. Literal government handout for free extra profit. Further improvements in computing were once again funded by military desires, simulators for planes, early computers were designed nearly entirely for computing ballistic tables for artillery, and selling a little bit of spare time on the side. Modern America exists because in 1940, America actually invested in itself. None of those investments were private. More examples: IBM owes a lot of it's early success to mechanizing the US census, once again public money. They even took some money from the Nazis FFS. How much did Henry Ford make building Shermans and other war material, often for the british or soviets to use? Starlink's Dishy terminal wouldn't exist without shitloads of public funds put into new phase array solid state scanned radars that were built out for the aegis system. Or how about basically the entire country's infrastructure exists because the feds spent billions on paying poor people to dig ditches so they wouldn't starve to death. I'm sure walmart and amazon would do great with our old state roads right? But sure, let's keep pretending these were "bets" by "private" companies.
- gottorf 3y ago
  > You mean that thing that happened when we gifted huge tracts of lands to a few private businesses so they could pay for the railroads Do huge tracts of land magically become working railroads? The word "happened" is carrying a lot of weight here. In general, your argument handwaves the difference between basic research (often paid for by public grants to universities) and a working implementation subject to market forces. The two have radically different incentive structures and require very different competencies. Good things don't happen by a politician's fiat, no matter how many tax dollars you throw at the problem. Behind every story of "America actually investing in itself" is men and women toiling away, breaking backs and burning midnight oil, almost always out of a profit motive.
  - mrguyorama 3y ago
    I will make clear that I'm talking about the transcontinental railroad. The companies were gifted not just land for the railroads, but 100ft of land on both sides of the rail line, as well as bonus land grants for every mile of "grade" totaling about 6,400 acres (2,600 ha) for each mile of railroad built, because the desire was for the railroad companies to fund the construction by selling the land. We also gave them significant bonds at 6%, which were repaid in full and with interest. The money was free and didn't exactly have strings attached. Gifting land to private individuals or companies used to be America's favored way to set up the next generation of wealth. In total, the acts to build the transcontinental railroad gifted the private companies more land than the state of Texas covers. The labor to build said railroads was then imported from Ireland and China. These same laborers were then treated as outsiders and "anti-american". The people who "burned the midnight oil" to build the cross country railroads were not americans working for a profit motive, but immigrants purposely encouraged to come to america with a false promise of "opportunity" so that they would be stuck here with limited opportunities outside of working for the railroad under shit conditions that often resulted in deaths, and underpaid with funds from the sale of land that was gifted to the companies by the federal government. This was as clear cut a handout to build infrastructure as you can get, and then we let these same companies pretty much explicitly become robber barons. We paid for their capital costs and then let them eat the profits from said capital. The same acts giving railroads money also made provisions to build a cross country telegraph line, so there's some handout to future communications infrastructure.
    - gottorf 3y ago
      > but immigrants purposely encouraged to come to america with a false promise of "opportunity" In other words, a profit motive on the part of those immigrants. They desired to make their lives better. That the opportunities were false doesn't mean they were not being sought out. > This was as clear cut a handout to build infrastructure as you can get, and then we let these same companies pretty much explicitly become robber barons. I agree the grants had inadequate oversight and because of that, it's fair to call it a handout. But again, just because land and money were handed out does not mean that you get a working railroad on the other side, or that public funding is the only way to get large infrastructure works done. Were some of the risks subsidized by the public in the case of the transcontinental railroad? Sure. The same thing happened with Solyndra, and nothing of value was produced at the end of that. So clearly government handouts aren't the necessary and sufficient precursor to success; at least the transcontinental railroad was built. And mind you, back in those days, US government spending as a percentage of GDP was in the single-digit percent, compared to the behemoth it is now at over 35%. If the redistribution of public money through taxation really generated wealth, we should all be living like kings given current levels of government spending. > Gifting land to private individuals or companies used to be America's favored way to set up the next generation of wealth. None of the descendants of the railroad tycoons are still so rich that they're worth being written about[0]. Cornelius Vanderbilt was estimated to have been worth 1/87th of the US GDP at the time of his death. His famous heir, Anderson Cooper, is estimated at the upper end to be worth $200M. In contrast, even the poorest state in the union, Mississippi, has had a billionaire from playing music, of all things[1]. [0]: https://www.forbes.com/sites/kerryadolan/2020/12/17/billion-dollar-dynasties-these-are-the-richest-families-in-america/ https://www.forbes.com/sites/kerryadolan/2020/12/17/billion-... [1]: https://en.wikipedia.org/wiki/Jimmy_Buffett https://en.wikipedia.org/wiki/Jimmy_Buffett

No incentive to take multi million dollar bets would mean most of the achievements of the last 200 years like railroads, airports and airliners, microchips, etc would have never gotten built.

mrguyorama 3y ago

>Railroads You mean that thing that happened when we gifted huge tracts of lands to a few private businesses so they could pay for the railroads? American railroads were NOT a private investment, but a public one! >airports and airliners Once again, public money during the war, creating the giant B-29 was more expensive than the Manhattan Project! America absolutely pumped cash into any building that claimed they could put out a few screws a week to support the insane amount of war material building we did. The airliner industry was further supported by Cold War warplane development, with bigger planes and bigger jet engines. >microchips Bell telephone had a legal monopoly for several generations. Literal government handout for free extra profit. Further improvements in computing were once again funded by military desires, simulators for planes, early computers were designed nearly entirely for computing ballistic tables for artillery, and selling a little bit of spare time on the side. Modern America exists because in 1940, America actually invested in itself. None of those investments were private. More examples: IBM owes a lot of it's early success to mechanizing the US census, once again public money. They even took some money from the Nazis FFS. How much did Henry Ford make building Shermans and other war material, often for the british or soviets to use? Starlink's Dishy terminal wouldn't exist without shitloads of public funds put into new phase array solid state scanned radars that were built out for the aegis system. Or how about basically the entire country's infrastructure exists because the feds spent billions on paying poor people to dig ditches so they wouldn't starve to death. I'm sure walmart and amazon would do great with our old state roads right? But sure, let's keep pretending these were "bets" by "private" companies.

gottorf 3y ago
> You mean that thing that happened when we gifted huge tracts of lands to a few private businesses so they could pay for the railroads Do huge tracts of land magically become working railroads? The word "happened" is carrying a lot of weight here. In general, your argument handwaves the difference between basic research (often paid for by public grants to universities) and a working implementation subject to market forces. The two have radically different incentive structures and require very different competencies. Good things don't happen by a politician's fiat, no matter how many tax dollars you throw at the problem. Behind every story of "America actually investing in itself" is men and women toiling away, breaking backs and burning midnight oil, almost always out of a profit motive.
- mrguyorama 3y ago
  I will make clear that I'm talking about the transcontinental railroad. The companies were gifted not just land for the railroads, but 100ft of land on both sides of the rail line, as well as bonus land grants for every mile of "grade" totaling about 6,400 acres (2,600 ha) for each mile of railroad built, because the desire was for the railroad companies to fund the construction by selling the land. We also gave them significant bonds at 6%, which were repaid in full and with interest. The money was free and didn't exactly have strings attached. Gifting land to private individuals or companies used to be America's favored way to set up the next generation of wealth. In total, the acts to build the transcontinental railroad gifted the private companies more land than the state of Texas covers. The labor to build said railroads was then imported from Ireland and China. These same laborers were then treated as outsiders and "anti-american". The people who "burned the midnight oil" to build the cross country railroads were not americans working for a profit motive, but immigrants purposely encouraged to come to america with a false promise of "opportunity" so that they would be stuck here with limited opportunities outside of working for the railroad under shit conditions that often resulted in deaths, and underpaid with funds from the sale of land that was gifted to the companies by the federal government. This was as clear cut a handout to build infrastructure as you can get, and then we let these same companies pretty much explicitly become robber barons. We paid for their capital costs and then let them eat the profits from said capital. The same acts giving railroads money also made provisions to build a cross country telegraph line, so there's some handout to future communications infrastructure.
  - gottorf 3y ago
    > but immigrants purposely encouraged to come to america with a false promise of "opportunity" In other words, a profit motive on the part of those immigrants. They desired to make their lives better. That the opportunities were false doesn't mean they were not being sought out. > This was as clear cut a handout to build infrastructure as you can get, and then we let these same companies pretty much explicitly become robber barons. I agree the grants had inadequate oversight and because of that, it's fair to call it a handout. But again, just because land and money were handed out does not mean that you get a working railroad on the other side, or that public funding is the only way to get large infrastructure works done. Were some of the risks subsidized by the public in the case of the transcontinental railroad? Sure. The same thing happened with Solyndra, and nothing of value was produced at the end of that. So clearly government handouts aren't the necessary and sufficient precursor to success; at least the transcontinental railroad was built. And mind you, back in those days, US government spending as a percentage of GDP was in the single-digit percent, compared to the behemoth it is now at over 35%. If the redistribution of public money through taxation really generated wealth, we should all be living like kings given current levels of government spending. > Gifting land to private individuals or companies used to be America's favored way to set up the next generation of wealth. None of the descendants of the railroad tycoons are still so rich that they're worth being written about[0]. Cornelius Vanderbilt was estimated to have been worth 1/87th of the US GDP at the time of his death. His famous heir, Anderson Cooper, is estimated at the upper end to be worth $200M. In contrast, even the poorest state in the union, Mississippi, has had a billionaire from playing music, of all things[1]. [0]: https://www.forbes.com/sites/kerryadolan/2020/12/17/billion-dollar-dynasties-these-are-the-richest-families-in-america/ https://www.forbes.com/sites/kerryadolan/2020/12/17/billion-... [1]: https://en.wikipedia.org/wiki/Jimmy_Buffett https://en.wikipedia.org/wiki/Jimmy_Buffett