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Causal Factors

Why Infrastructure Remains So Crucial

Research & Commentary
February 03, 2015

by Sheila Kennedy

 America’s failure to attend to our basic infrastructure is one of the most serious policy issues we face.

By Sheila Suess Kennedy

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Economic enterprises need multiple kinds of infrastructure in order to have a chance of succeeding.

Economic activity depends on infrastructure.

In poor, third-world countries, people are no less entrepreneurial or hard-working than those who live in the developed West. What could be interpreted as a lower level of sophisticated economic activity in these countries can actually be traced to a lack of basic infrastructure.

Economic enterprises need multiple kinds of infrastructure in order to have a chance of succeeding (beginning with enough people with the wherewithal to buy their goods—i.e. markets). They lack roads, trucks and railroads to transport necessary raw materials and to ship finished goods. They often lack reliable electricity and potable water. Even more importantly, many countries can’t even provide entrepreneurs with the security and social stability businesses require—the sort of social order we take for granted.

Infrastructure is thus much more than roads and sewers, important as those are. Infrastructure—in its most expansive sense—includes important social supports like the rule of law. In most western democratic countries (although not in the U.S.), health care is considered part of a country’s essential social infrastructure. [pullquote] Access to a robust infrastructure plays a huge role in mitigating economic inequality. [/pullquote]

Needless to say, equal access to a robust social and physical infrastructure plays a huge role in mitigating economic inequality.

Elizabeth Warren is one of the few elected officials who seems to understand the essential role played by infrastructure. As she recently put it:

“People who built great businesses worked hard. Most successful entrepreneurs worked their tails off. But those businesses needed good soil to grow–and that meant they need roads and bridges to get their goods to market, dependable and affordable power grids, access to clean water and safe sewers, up-to-date communications–the kind of basic infrastructure that we build together.

Coming out of the Great Depression, we built those roads and bridges and power grids that helped businesses grow right here in America. We plowed money into our future, and as those businesses grew, they created great jobs here at home.

But by the 1980s, our country sharply cut back on making those investments in our future, and now we’re getting left behind. Today China spends 9 percent of its GDP on infrastructure. Europe spends about 5 percent of its GDP on infrastructure. They are building a future for their businesses–and better jobs for their people.

But the United States is investing only 2.4 percent and looking for more ways to make cuts. Today, the American Society of Civil Engineers says we have about $3.6 trillion worth of deferred maintenance, repairs and upgrading–and every day we’re falling behind.” [pullquote] Divestment from infrastructure hurts most in the areas where it is most needed—the poorer parts of our nation. [/pullquote]

Of course, disinvestment from infrastructure hurts most in the areas where it is most needed—the poorer parts of our nation.

America’s failure to attend to our basic infrastructure is one of the most serious policy issues we face. It is maddening to watch members of Congress in both parties posture for interest groups and play petty politics while our bridges and sewers crumble, our power grid degrades, and other countries’ wireless service exceeds ours in reliability and speed.

As the great longshoreman and philosopher Eric Hoffer once said, we cannot judge the greatness of a civilization by the roads and buildings it constructs, but by how well it maintains what it builds.

By that measure of greatness, the United States is falling far behind.

Sheila Suess Kennedy, J.D. is Professor of Law and Public Policy in the School of Public and Environmental Affairs at Indiana University Purdue University at Indianapolis. Her scholarly publications include eight books and numerous law review and journal articles. Professor Kennedy is a columnist for the Indianapolis Business Journal and a frequent lecturer, public speaker and contributor to popular periodicals. She blogs at www.sheilakennedy.net

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