Hi GV, (Long) RE: "Railroad tracks, all private enterprise. Note that the railroad was the primary reason that our country was able to vault ahead of the rest of the world in economic well being."
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The railroad tracks never would have extended their reach, if it weren't for the land grants that made this possible. The railroad track business was not private enterprise, it was heavily subsidized by land grants. That's based upon real data from my family history, where some of their land was given to the railroads for the betterment of the local economy.
So, the land grants were contributors to the economical improvement you mention.
The cost of the tracks was quite cost prohibited, according to my Grandpa who explained to me the details of why the railroad went through my Gr Grandparent's land, rather than around it. If a person's land wasn't large, the railroad would simply go around the land or relocate a family, but in the case where the land stretched for miles, the railroad really had no choice but to go through the land, rather than around it, due to the high cost of laying out more miles of tracks. My Gr Grandparents knew the details of the costs of tracks because that was obviously one of the first discussion points.
However, they were more motivated to spur growth for the local economy.
But the point is, the railroads were built upon these types of land grants, not based upon private enterprise. I don't see how it would have happened without them.
(One could argue about the validity of installing railroad tracks to areas where settlements/cities didn't take off. However, many areas did take off.)
RE: "Although I'm not positive, I'm pretty sure that the phone system was private capital, too."
I wasn't talking about the founding investment (which was by Bell's wife's father.) By investment, I meant the company's investment into certain markets. They never would have made many of the market entries, without a guarantee by the government to be the single provider. This guarantee allowed for an adequate ROI. Without it, they never would have gone into many of the markets.
RE: "Public works and highways, for the most part, were government funded. "
What's difficult about installing a fiber duct when a city road is being repaired or replaced? Why rip it up twice?
RE: "Along the way, many railroads collapsed in bankruptcy"
One of my college friend's Grandpa was a majority business owner of one of the smaller railroads that went bankrupt in the 1930's. They went from being incredibly wealthy to incredibly poor, where they didn't even have enough money to pay for the heat (or firewood, whatever kind of heat they had back then) so the story went. She said they had everything in the stock market, particularly railroad stocks.
RE: "note that if it weren't for MCI getting the government out of the way a couple of decades ago"
There's a huge difference between government intervention at the front end vs. back end. (And there's a huge difference between installing a duct in rural areas or small cities on roads they're repairing, vs. installing it across all of America.)
The land grants allowed for railroad tracks.
One argument that I think would bolster your case, which you haven't used, is the potential for corruption. I think that's the biggest concern. The government and business corruption of the railroad era was tremendously huge. They took a good useful idea and tainted it with corruption. So, the question is: can it be prevented a second time with better policy, or is it just the way our society is.
RE: "Equity markets don't work for >3 year solutions..."I would definitely disagree with that notion."
That intentional exaggeration was subtle humor about the Bubble Era. AfterTheBubble VCs are now saying 5 years.
RE: "The biotech industry was funded primarily with equity capital, even though that industry has a very long payoff time."
We chatted about this once. We have a different opinion. Mine is based upon my former college roommate who does heavy research in medical microbiology as a univ prof, a VC that is in the life sciences, and a life science entrepreneur whose pitch I heard. "This is not R, ready to go, it's ready to implement." The impression I have is, biotech VC funding is for D not R. My research friend tells me the best biotech inventions/cures were discovered by accident. (She has a dry sense of humor too.) One VC said it takes $100M+ on average to get a biotech company off the ground. The media claims today's drugs aren't really new drugs, just slight enhancements based upon old drugs. Sounds like too much focus on D and not enough on R, which I believe is what equity markets tend to deliver.
I rather doubt the equity markets would have delivered Rx treatment for my sister's illness (which I hear only 3,200 people get per year) due to the small market size. Thank goodness for research.
RE: "But if the government is funding another competitive project, it is quite possible that another solution might not happen."
That's a good point.
But I think you could use other arguments against government intervention, like: potential for corruption, slowness, and possibly technology changes. (Though does fiber strand change much over 10 years, aside from terminal ends? Fiber is just glass, a known property, and it can plow a lot of data through that exceeds the limitations of traditional Cable and works around the congestion/bandwidth limitations of wireless.)
If the government is digging up a city street, why not put a fiber or fiber duct in? Seems a waste of labor not to. Broadband isn't going to be an option for every home, unless the gov't intervenes. It's not the like the phone, LECs, or cable companies have extra money to deal with small markets.
Regards,
Amy J |
