Throughout American history centralized, federally subsidized infrastructure projects have been a recurring theme for plutocratic interests. Under the Whigs (“internal improvements”) and the Gilded Age GOP (railroad land grants) it was promoted by parties that unabashedly identified themselves as advocates for national commercial interests. But with the rise of the Progressive movement at the turn of the 20th century (which promoted “Jeffersonian ends with Hamiltonian means,” in Herbert Croly’s words) and the essentially corporatist New Deal agenda (Google “Gerard Swope”), infrastructure has been increasingly promoted as a “liberal” or “Progressive” idea, constantly talked up by people who publicly identify themselves as enemies of the Malefactors of Great Wealth. Just consider how many times the Interstate Highway System comes up as a “Progressive” precedent in liberal speeches, or look at Rachel Maddow’s 30 second spots in front of the Hoover Dam talking about “big things.” So it’s hardly a surprise that presumptive Democratic presidential nominee Hillary Clinton has jumped on that bandwagon.
The Clinton campaign promised on May 25 (Abby Phillip, “Clinton to make new pledge to push infrastructure bill in first 100 days,” Washington Post) that she’d push a giant infrastructure bill in her first 100 Days, presumably bigger than the $270 billion she’s already promised. It would be, said the aide who made the announcement, “the most significant increase in infrastructure investment since President Eisenhower built the Interstate Highway System.”
And we all know how “Progressive” the Interstate was, right? Just look at all those Rachel Maddow commercials. Never mind that the Interstate was built under the supervision of “Defense” Secretary Charles Wilson, former General Motors CEO, who posited a unity of interests between his previous and present employers something like that of the Father and Son as formulated at the Council of Nicea. And never mind that the Clinton announcement came right on the heels of “Infrastructure Week,” which is basically a sales campaign by the construction and civil engineering industry and the industries whose business models depend on subsidized infrastructure.
Anyone with a lick of common sense knows American politics isn’t divided between a Party of Working People and a Party of Big Business. It’s always been divided between two Parties of Business that serve two somewhat different but overlapping segments of the capitalist class. And infrastructure spending isn’t even really an issue between them. Here in Northwest Arkansas the traditional priority of the Third Congressional District Representative — always occupied by a Republican — is to bring home highway pork for Walmart, Tyson, J.B. Hunt trucking and the Jim Lindsey real estate empire. Governor Asa Hutchinson — a man so right-wing he still has the stick up his ass he got for graduation from Bob Jones University — just announced his plan to fund a major state highway spending program from general revenues.
The central principle of corporate capitalism, in Noam Chomsky’s famous phrase, is socializing cost and risk and privatizing profit. And from the beginning the single most important cost which has been socialized is transportation. The national railroad system was central to the model of mass production that emerged in the 20th century, and probably tipped the balance toward it.
According to Charles Sabel and Michael Piore (The Second Industrial Divide), the invention of the electric motor eliminated the main reason for large scale in industry — the need to fully utilize power from a single steam engine or water wheel — and made it possible to scale machinery to production flow and locate production close to the point of consumption. The ideal model, given this new technology, was craft production with general-purpose electrically powered machinery, integrated into local industrial districts, quickly switching between production runs on a demand-pull basis as new orders came in.
Instead, we got a centralized economy of large-scale production with specialized machinery, with the machines constantly running at full capacity to minimize unit costs. Given that production was divorced from demand, it was necessary to organize the whole society around a supply-push distribution system to make sure the industrial output was consumed and the wheels kept turning. So we got imperial wars to open up foreign markets by force, a perpetual war economy to soak up surplus capital and industrial capacity, and planned obsolescence to keep people buying stuff.
Alfred Chandler, in The Visible Hand, said the mass production economy would have been impossible without a high-volume national railroad system. Large manufacturing corporations serving a national market only emerged when they could be piggybacked on a preexisting nationwide wholesale and retail system. And the logistical model of such national distribution chains presupposed a centralized railroad system. Chandler didn’t write this as some kind of New Left critic of mass productive capitalism, mind you, but as an apostle of managerialism.
We’ve been conditioned to think of mass production as the height of efficiency (“Economies of scale,” 100,000 hypnopaedic repetitions under the pillow from age five to eight), but in fact it is not. According to Borsodi’s Law, productive economies of scale beyond a relatively low level of output, are more than offset by the increasing costs of distribution. And this is especially true of mass production industries. Because production is undertaken to fully utilize capacity (Ralph Borsodi argued in The Distribution Age), rather than in response to incoming orders, ways must be found after the fact to ensure consumption of the output. We get a batch-and-queue system with large factory warehouses full of finished goods waiting for orders, large stocks of goods in transit at every node in the network, and enormous costs from mass advertising, packaging and brand differentiation — not to mention those imperial wars, enormous miltiary budgets and planned obsolescence.
This grossly inefficient system is only profitable because 1) industrial cartels with oligopoly pricing make it possible to restrict price competition and pass the inefficiency costs on to the consumer through administered pricing, and 2) so much of the input costs — like, say, shipping on subsidized railroads and highways — are subsidized by the government.
The same is true of social pathologies like urban sprawl. That model, in which people live in suburban residential monocultures and drive to separate commercial monoculture enclaves where they work and shop, depends heavily on subsidized urban infrastructure projects — frequently involving the use of eminent domain and the ethnic cleansing and demolition of minority neighborhoods — along with subsidized utilities to new outlying housing developments and Big Box stores.
The Interstate was also the main force behind the “warehouses on wheels” logistical model of the national retail chains that destroyed Main Street, and the disappearance of local canneries into national food processing conglomerates.
So now we’re back where we’re started. There’s nothing “progressive” about government funding the operating costs of big business. Railroads, highways and airports should be funded entirely by user fees on those who impose costs on the system.
Had the railroad system been developed without eminent domain, without land grants and other subsidies, it probably would have emerged as a national patchwork of hundreds of local systems with the national trunk lines being fewer, lower in capacity and emerging later. Absent the role of the federal government (which created the civil aviation system almost completely at taxpayer expense), airlines would consist mostly of small passenger — and no jumbo jets — travelling point to point without a hub system. If there was a large-scale air freight system, it would probably be airships. Throw in the national network of two-lane turnpikes we’d likely have absent subsidies, and American industry would probably look a lot more like those industrial districts Sabel and Piore wrote about.
Imagine an industrial economy of small neighborhood garage shops, with high-tech computerized machine tools, self-managed by the people working them and producing for the local market. Most of our clothing, furniture, household appliances — and even cars — are produced in such neighborhood shops. The industrial designs are all open source, so the majority of the price of our manufactured goods that currently consists of embedded rents on patents and trademarks wouldn’t be there. All the waste that goes into mass marketing, shoddy design, the military budget, and the cost of driving twenty miles and back every day instead of living in mixed-use communities where we work and shop, would be gone; so we’d probably enjoy the same standard of living with fifteen hours or less work a week.
There are some substantive policy differences between Democrats and Republicans — don’t get me wrong. But on all the issues most fundamental to keeping us from having the kind of economy I described in the previous paragraph — the transportation subsidies, “intellectual property,” the global Empire and permanent warfare state — the two parties are almost indistinguishable. I don’t know — one party may give us a form of corporate rule that’s somewhat more bearable than the other. But either way it will be corporate rule, without a doubt.
If we ever want to get to that human-friendly economy of small-scale, self-managed production for local use, we’ll never get there through the state. We’ll have to go around it.
