On May 10, 1869, at Promontory Summit, Utah, Central Pacific Railroad President Leland Stanford hammered the final spike into the first transcontinental railroad in the United States. Completion of the railroad took six years and was financed largely through government subsidies and land grants. The railroad dramatically reduced the time needed to cross the country, and its completion was celebrated across the United States, in real time, through telegraph links.
Building the railroad is an example of the productive function of government (albeit through a public-private partnership). In this case, the government undertook to further a project that it believed could not be done by private citizens or markets alone.
One of the great ironies is that this isn’t true. Between 1886 and 1893, Entrepreneurs James J. Hill built his own transcontinental railroad. He did so without government support, and even purchased the public lands through which his Great Northern Railroad passed.
By some accounts, Hill was also a more humane, honest, and customer-oriented leader than the men who built the first railroad. Rather than being accountable to the government, he was accountable to his shareholders, and his customers, and that made a big difference.
- The producers of the TV drama version of the story make a great deal about the costs of the advance of civilization (environmental, for the Native Americans, for the workers, etc). Do you think a project like this could be undertaken today? If not, what has changed?
- While J.J. Hill was able to build a profitable railroad without any government support, he only did so 25 years after the government funded one was completed. Should “the advance of civilization” have waited? What benefits did the earlier completion bring to the country? (and what costs)?
- Protective functions of the government include having an honest judiciary, uncorrupt officials, and providing police and border protections. Productive functions are things like running schools and building railroads. Which function do you think is more important? What do you think should be the balance between them?
3, May 2018, Aerial View of a Highway [Digital photograph]. Retrieve from <google.com>.