Our mix of free enterprise and socialism has been working for a long time

The Tennessee Valley Authority (TVA) was developed during the Great Depression that occurred in the 1930s. It was a federal government program that established electricity for a seven-state area, and it bolstered the free enterprise economy of the region. World War Two followed the depression era. The TVA was a source of the extensive amount of electricity needed by Alcoa to produce the aluminum needed for the 50,000 aircraft that authorities anticipated needing for the successful conduct of the war. Additionally, the TVA was the source of electricity needed by the Oak Ridge, Tennessee, nuclear facility. Oak Ridge made a significant contribution to the development of the weapon that persuaded the Japanese to surrender.

After the war, returning veterans were entitled to a government-financed benefit, the GI Bill. That legislation provided college education and other training for millions of people who otherwise may not have been able to obtain a college education. The program also provided loan guarantees for housing. Those benefits for individual veterans were also very beneficial for private companies that built an immense number of housing units and sold millions of automobiles, refrigerators, and other products and built the most prosperous economy in history during the 1950s through the 1970s. No one benefited more from the government-sponsored education than private employers. The jobs and economic activity generated significant tax revenue for the federal government. Not all socialism is bad socialism. 

The internet was originally developed by the U.S. Government, and that activity was financed by taxpayers. The internet has been a gold mine for private enterprise.

Elon Musk operates SpaceX, a private rocket system to transport people or materials into low earth orbit. He would probably tell us that he financed the project. But rocket development has been taxpayer financed from its initiation more than 70 years ago. According to Columbia University Professor Ruth DeFries, the capsule that landed Neil Armstrong and Buzz Aldrin on the surface of the moon and returned them safely to earth in 1969 was the work of “four hundred thousand engineers, scientists, and technicians.” All of that was, of course, paid for by taxpayers. Now, the benefit accrues to a billionaire who operates a for-profit rocket. 

Free enterprise is a vital part of our economy. But, sometimes, teamwork and socialistic endeavors play a vital role. When the only driving force is profit, many desirable or necessary functions are under served. Public health, disease control, and public sanitation are issues that, when available to all, benefit all. These activities generally require public funding.

We frequently see communities propose a collaboration between government and private enterprise. The community may offer a financial contribution in the form of real estate or sewer and water line connections or a variety of other incentives including tax forgiveness to induce a company to locate in the local community and bring jobs.

We have a mixed economy that has been working for a long time. Ours is most assuredly not a pure free enterprise economy and certainly not close to a socialist economy. But it works where theories fail.