“If you’ve got a business,” President Barack Obama said, “you didn’t build that.”
By ignoring his preceding sentence, Republicans quickly turned that into one of the most abused statements of the 2012 presidential campaign. By “that” Obama meant the roads, bridges and other government investments which were the foundation for many a success story in the private sector.
And for those who didn’t already know, that includes our state ferry system.
Two weeks ago, the Alaska Marine Highway System released a report describing just how much Alaskans benefit from our publicly owned transportation network. The study by the McDowell Group concluded that the $117 million the state spent on the system in 2014 generated $273 million worth of economic activity. That’s a return of 133 percent on the state’s investment.
The huge payback estimated by McDowell might surprise even an economist like Josh Bevins of the Economic Policy Institute, a labor supported think tank in Washington, D.C. “Investments in public capital have significant positive impacts on private-sector productivity with estimated rates of return ranging from 15 percent to upwards of 45 percent,” he wrote several months before Obama’s speech. And he says it’s consistently higher than the return from private capital investments.
Now, I’ll admit that measuring the economic stimulus of government spending is more complicated than I’m making it sound. And I’m probably mixing apples and oranges by putting the marine highway study alongside the global picture Bevins was painting. But both describe how the redistribution of public funds can result in job creation and economic expansion.
To some in this country the mention of wealth redistribution is akin to treason. But no matter how much we deny it, the American economy is powered by a mix of capitalist and socialist ideals. In the case of transportation infrastructure, public spending supports anybody who travels. And many of those living in the most remote communities served by the AMHS are poster children for self-reliance, not welfare.
The system also subsidizes businesses such as Copper River Seafoods. They transport millions of pounds of seafood to Anchorage using the ferry between Cordova and Whittier. There’s no private marine shipping option because the demand to move freight across Prince William Sound is pretty low. And the cost of shipping by commercial air would make their fish much less competitive in other markets.
The AMHS encouraged settlement in Alaska’s coastal cities similar to the way railroads opened up the American west. Sure, the system has always relied entirely on public funding. But railroad barons weren’t exactly models of private enterprise. They were subsidized by federal land grants that included a 400-foot right-of-way and 10 squares miles per mile of track. And they built much of the system by taking advantage of cheap immigrant labor.
Land and labor have been at the center of wealth redistribution in the country since before we declared independence. Just ask Native Americans and Alaskans who lost rights to the lands they’d occupied for centuries, African American slaves who were never paid a dime, or the children who worked in factories for almost nothing before passage of the Fair Labor Standards Act in 1938.
These extreme cases of upward wealth redistribution may be ancient history. But the capitalist-socialist debate isn’t complete without acknowledging it exists in other forms today. An example is the $20 million government Advanced Technology Program grants awarded to Dow Chemical and General Electric while the respective CEOs of these Fortune 500 companies were earning $26 million and $19 million annually.
That’s at least 125 times more than Michael Neussl earns as Deputy Commissioner for Marine Operations. But as a true public servant he doesn’t expect more for overseeing an enterprise that helps move people and goods to and from Alaska’s coastal communities.
Any hardcore capitalist would tell you that government programs lack the competitive spirit which motivates entrepreneurs in the private marketplace. And that’s the populist narrative preferred by our budget slashing legislators. They’d rather us see AMHS as just another bloated bureaucracy in an inherently wasteful government.
But the effectiveness of publicly owned and operated ferries can’t be measured by the usual metrics of production and profit. It’s a matter of how well it serves the greater good. There’s always room for improvement, but AMHS has a long history of using public funds to redistribute and expand our collective wealth. And it needs a long-term plan and adequate funding to ensure it remains a shining socialist success story.
• Rich Moniak is a Juneau resident and retired civil engineer with more than 25 years of experience working in the public sector.
