Center for a Stateless Society
A Left Market Anarchist Think Tank & Media Center
But Who Will Build the Roads? (Maritime Edition)

China just announced a regional infrastructure plan to promote the integration of Asian markets under Chinese leadership — sparking predictably hypocritical outrage from the United States (“China’s Pouring $40 Billion Into a New ‘Silk Road,'” The Blaze, November 9). Chinese President Xi unveiled the Silk Road Fund to leaders of Bangladesh, Cambodia, Laos, Mongolia, Myanmar, Pakistan and Tajikistan as they prepared for a summit on Asian-Pacific affairs. The announcement follows the creation of a $50 billion bank last month by China and twenty other governments to finance regional infrastructure.

According to unnamed US officials, Silk Road is an unnecessary duplication of existing World Bank efforts. The subtext, of course, is that the World Bank and other Bretton Woods institutions, along with Western foreign aid programs, were created to integrate the world economy under the control of Western capital (primarily that of the US and its trilateral junior partners in Western Europe and Japan). China, as a rising regional power and the second largest economy in the world, challenges the hegemony of global economic governance institutions created to serve American interests — much as the rising power of imperial Germany a hundred years ago challenged Britain’s unrivaled naval and colonial domination.

The hypocrisy comes in when you consider the sheer scale of US government global infrastructure financing since World War II, and its pretense that the goal of this financing is service to the neutral interests of some “international community.”

Some people (especially liberals) frame state-funded infrastructure as a neutral good that benefits everyone. It is no such thing. Depending on its scale, structure, and degree of overlap between its funders and its beneficiaries, it benefits some economic actors at the expense of others like any other state-funded input. One stereotypical question we anarchists like to attribute to liberals — usually delivered in a whiny, quavering voice — is “but who will build the roooaaads?”

In fact, despite the lionization of “infrastructure” as “progressive,” every major, centralized, nationally funded infrastructure project in American history has had politically organized business interests as its main constituency, serving primarily to subsidize their business models. In early US history it was mainly the Federalists and Whigs, parties of the national commercial interests, who promoted federally-funded “internal improvements.” The massively subsidized national railroad system, with its high-capacity central trunk lines and reliable schedule, gave rise to a nationwide wholesale and retail ecosystem, which in turn enabled giant industrial corporations to produce on a continental scale. Like the railroad system, the federally subsidized civil aviation and Interstate Highway systems made large nationwide corporations artificially competitive against local producers by enabling them to externalize increased distribution costs onto the taxpayer.

Some right-leaning libertarians whose hearts bleed for corporate interests adopt a pose of ignorance, echoing liberal arguments that “the roads benefit anyone who wants to use them,” or disingenuously twisting left-libertarian arguments that subsidized roads benefit some business interests at everyone else’s expense as a condemnation of large corporations for “driving on public roads.”

Some use similar chicanery on a global scale, asking how libertarians could object on principled grounds to obviously “neutral” activities like the US Navy keeping world sea lanes open for commerce. This is just a larger-scale libertarian equivalent of “but who will build the roooaaads?” For an answer we need only consult Adam Smith, who argued that public infrastructure should be financed by its beneficiaries: That public bridges be financed by tolls based on the weight of vehicles passing over them, and that navies be financed based on the value of merchant cargo shipped under their protection.

The single largest component of US “defense” spending is the US Navy, due to the enormous capital outlays embodied in its ships. And the main purpose of all those carrier groups in the Indian Ocean and western Pacific is to keep maritime choke points open and suppress piracy. Absent a state with the ability to tax society at large for the benefit of particular economic interests, merchant shipping (including oil tankers) would necessarily bear the full cost of this policing activity, adding significantly (to say the least) to shipping costs.

It’s hard to deny — unless one is economically illiterate — that this is a massively distorting subsidy, or that the provision of maritime protection on free market principles would result in a powerful shift of incentives toward supply chain relocalization and energy conservation.

Citations to this article:

Markets Not Capitalism
Organization Theory
Conscience of an Anarchist