But Who Will Build the Roads? (Maritime Edition)

by Kevin Carson

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.

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  1. In other words, here again Kevin comes out with the dogma that Thomas Knapp insists we are “lying” about; Kevin just does not like trade. Goods moving about. By road, by rail, by canal, and by ship. “Supply chain localisation” being a posh way of saying, living off local produce.

    Well fine Kevin. Just don’t start crying when you find yourself missing bananas and coffee. You’ve got your local turnips after all.

  2. Agreed Ian.

    On the IMF, World Bank and so on – they should be abolished.

    Any “vulgar” libertarian is against them, just as we are against the Federal Reserve and Bank of England, Indeed as “vulgar” libertarians believe that all lending should come from REAL SAVINGS (at interest rates agreed between lenders and borrowers) we are rather more against such credit-money expansion institutions than Kevinites are.

    On “infrastructure” – it should be privately financed and controlled as the Turnpike road network in England and Wales and the CANAL network was, railways should be the same.

    If (for some reason) roads prove to be uneconomic, then people will tend to live near railway stations – and big shops (and so on) will also tend to be near such places.

    More generally…….

    It is a pity that China seems to be repeating some of the mistakes of the United States (creating its own versions of the “World Bank” and so on) – if it repeats the mistake of creating an unsustainable Welfare State then things will get “interesting” in the sense of the curse (perhaps not really of Chinese origin) “may you live in interesting times”.

    As for the United States military – it (like all Western militaries) has been in DECLINE for half a century (both as a share of the economy – and in terms of numbers of ships, aircraft and so on).

    Presently the United States armed forces is heading towards between 3 and 2 per cent of the economy – and the number of ships and aircraft (and so on) is heading towards 1930s levels.

    The Welfare State (which was not created by “capitalists” or in the interests of “capitalists”) is growing out of control, it is eating everything that is not itself – this is also true in all other Western countries.

    The end result will be horrific. Economic, social and cultural breakdown.

  3. As for companies (“corporations”) Ian has a point – and one I can not really explain (although I do not think the Puritan theory explains it – I do not have my own theory, so I am at a loss).

    In reality American companies are now (they did not use to be) more highly taxed than companies in any other Western country (they are being driven out of the United States) and company managers can be thrown into prison for what would be considered clerical errors in other Western countries – yet many Americans (and Kevin is a good example of this sort of American) have a fanatical hatred of “corporations” and operate under the delusion that they control the government and so on – as if real life was like some Hollywood film (indeed, come to think of it, why is “the corporation” the stock villain of a Hollywood film and the bogey man of the degenerate part of American culture?).

    In future partnerships (also with limited liability – an ancient practice in both private Law Merchant and Church, Canon, Law when applied to commercial questions) may come to dominate the American economy and the formal “corporation” die out.

    Of course this assumes that the United States does not utterly collapse (along with the rest of the Western World) and both the out of control Welfare States and the Credit Bubble financial system (rather than lending coming solely from REAL SAVINGS) may well destroy our civilisation.

  4. I think it would be a pity if the American economy (assuming the United States, and the West generally, survives at all) became dominated by Partnerships and so on (due to an insane hatred of “corporations” and the myth that they are the “creations of the state” as if Canon Law for commercial matters, including bodies corporate, never existed). I think it would be a pity because to become a partner in an large scale enterprise one has to be rather wealthy to start with – whereas most people can buy a few shares in a company (especially if Capital Gains Tax and Inheritance Tax were abolished and the web of regulations removed – basically the situation returned to what it was when the vast majority of shares were owned by individuals, mostly rather ordinary individuals – the “Aunt Agatha” types).

    It would also be ironic if the Kevinites (with their obsession with attacking “the rich”) actually made property ownership more (rather than less) concentrated than it is now. But such is life and Partnerships are certainly not a threat to the very survival of Civil Society – as both the out of control Welfare State (not create by “capitalists” or for the benefit of “capitalists”) and the credit bubble financial system (rather than having all lending being from real savings – actual sacrifice of consumption) both are.

    As for private military forces………

    Well there are all sorts of problems with them, but the United States armed forces appears to be in terminal decline and the other Western forces are MOSTLY token forces.

    Some way will, hopefully, be found to protect trade and commerce from the threat of the Chinese regime (whose military is expanding rapidly and whose desire for more lands and seas is unlimited, soon will London and New York be declared “always part of China – we have this ancient map, on which the ink is wet, that proves it”?, as so many countries in Asia and the Pacific are discovering). and Mr Putin’s armed forces, and (of course) the thousand year (plus) threat of the Islamists – expanding daily as their population grows.

    Perhaps in the future (when the accursed United Nations treaties against nuclear weapons in space and against private property in space – are torn up) great private companies (“corporations”) with their headquarters on Mars (the planet of war……..) will be in a position to rain down nuclear death on governments and (Black Flag?) pirates who threaten the property of business enterprises.

    I can see lots of problems with this – but one can but dream.

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