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A Perspective on Economic Development

By: Eric Wright

You may be surprised to learn our founders hotly debated the constitutionality of the federal government being involved in road construction projects to facilitate travel and commerce. In fact, Andrew Jackson vetoed one such project, the Maysville Road, on the grounds he considered it unconstitutional.

What tipped the scale against this attitude was the undeniable impact of a project that made New York “The Empire State,” and New York City the commercial capitol of America and, in some ways, the world. It was an economic development project first put forward about 25 years after the American Revolution and underwritten by the state of New York — The Erie Canal.

The canal facilitated western expansion and provided a means of bringing crops harvested in the west to the markets along the eastern seaboard and beyond. Surprisingly, Thomas Jefferson, who orchestrated one of the greatest economic development expenditures in history, the Louisiana Purchase, considered the canal project “madness.” His protégé, President James Madison, vetoed a Congressional bill funding this most significant transportation project of the era, which New York’s legislature decided to invest in … and the rest, as they say, is history.

The next transformational economic development project was one of Abraham Lincoln’s great legacies, though he never lived to see it completed — the Transcontinental Railroad. It was an undertaking so vast and challenging that historian Steven Ambrose dramatically described it in his book, “Nothing Like It in the World.” As trains became the dominant factor in transportation, economic opportunity and the development of the American West, this public/private partnership did for the country what the Erie Canal had done for New York by making her a world power.

From Turnpikes To Interstates

A subsequent project of similar impact and scope was the interstate highway system, as the automobile began to rival the locomotive in transforming our way of life. These non-stop, toll-free thoroughfares linked the nation and gave rise to communities and commerce across the country. Though credited to President Eisenhower, the concept was first proposed by President Roosevelt, though he was distracted from pursuing it by a world war, which Eisenhower helped to win.

The next mind-boggling and budget-ballooning project was America’s quest to explore space and put human beings in the most hostile of known environments. It has taken more than 50 years for the private sector to move into a position to take over aspects of this industry. One thing is certain, however, had we not made the investment, America’s economic and strategic positioning would have been surrendered.

Believe it or not, every one of these projects was hotly debated and brutally criticized as being pork barrel for special interests, greedy politicians and speculators, as well as being downright un-American. Were there examples of graft? Probably in every case. Yet, because of them, everyone’s economic potential and quality of life had the opportunity to improve.   

Where are these lessons in the current debate over the local, state and federal government’s role in facilitating economic development? Are our air and seaports a form of “corporate welfare?” They receive government subsidies and special corporate designations; do critics think we are being exploited by the likes of Delta, Southwest and Royal Caribbean Cruise Lines? Debate is always a healthy thing, but when reason and history is eclipsed by ideological name calling, we have to say “enough”. Here is to the legislature that came to its senses.

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