Making cement in South Dakota, and other tales from the annals of Big Government
Americans have welcomed what's now labeled as socialism for years. Will the partisan attacks have any impact?
When government goes into business, is it socialism? And if it is, should we be worried?
Huge deposits of limestone lie beneath the prairies and mountains of western South Dakota, where I grew up. The rock became more valuable in the mid-19th century, when it emerged as the main ingredient of new types of hard cement. By the early 20th century, as the construction of roads and buildings boosted cement demand, there was a push to open a cement plant in the Black Hills, so that cement wouldn’t have to be hauled from hundreds of miles away. But nobody would put up the capital needed to build it.
So the state did it. The South Dakota Cement Plant finally opened in Rapid City in 1924. The state could take a small profit – about $10 million a year by the 1990s – and still match its competitors’ prices, which it did until selling the plant to a Mexican company, Grupo Cementos de Chihuahua, in 2001. By then, Dacotah Cement had been used all over the country, including in the Hoover Dam and the interstate highway system.1
This notion of a state going into business to do something that private industry was doing everywhere else is especially surprising, I suppose, since it happened in what’s now a rock-ribbed conservative state. Imagine the pushback if a state decided in 2021 to build and operate a factory making something essential but in great demand – computer chips, say, competing with the likes of Intel and Qualcomm. I suspect one of the first to denounce the idea would be South Dakota’s current governor, Kristi Noem.
Noem, after all, is quite critical of what she considers government intrusion into free markets. Her rhetoric is nearly apocalyptic. She has claimed that Democrats “have embraced socialism,” which “destroys lives.” 2
She’s far from alone. The concept that Democratic officeholders are closet socialists – and that Joe Biden has a “radical socialist agenda,” as former Secretary of State Mike Pompeo claimed recently – is a drumbeat on the right. Most Americans have a negative view of socialism, though pollsters note that people who consider themselves Republican are much more intense in their opposition. 3So when Republican candidates try to rustle up Cold War-era fears of socialism, it does more to animate their own voters than to sway independents or lure Democrats.
Still, it’s obviously seen as a potent weapon, because all sorts of Democratic proposals get labeled “socialistic” these days – though mostly in the context of government actions to support people at the lower end of the socioeconomic spectrum, like laws requiring a higher minimum wage, or expanded unemployment benefits. You don’t hear socialism cited when the discussion turns to subsidies for farmers, which ballooned from $4 billion a year in 2017 to $20 billion in 2020, mainly to prop up the agricultural sector from the devastation it faced as a result of Donald Trump’s failed trade war. 4
All the fuss about socialism, in fact, misses a couple of points. First is simply definitional: Socialism is all about workers owning and managing the means of production for the common good, and there’s not much of that in the United States, no matter what party is in power. What there is a lot of – and this is the second key point, I’d say – is government money pouring into portions of industries, or segments of the economy. We’ve accepted that since at least 1806, when Congress funded the first federal highway – The National Road, to link the Ohio River with Cumberland, in the state of Maryland. Governments own the roads now, though they’re built by private firms hired by governments. Road-building isn’t socialist, any more than healthcare in America is. Both are essential services provided by a partnership of government and private industry.
Government exists, fundamentally, because people are willing to yield their individual authority for the common good. Government built ports in deep harbors and forts on the frontier; government raises armies for our defense and hires police for our protection.
So the question about what leads to socialism comes down to where you draw the line on government activity. And that may shift over time. You can use taxpayers’ funds to open a library, where books are lent, but not a bookstore, where books are sold. Government provides buses to get people around, but taxi service is private, and passenger rail is — well, it’s complicated. And with regard to those computer chips, we use tax dollars to subsidize construction of chip fabrication plants, but those billions of dollars don’t allow the government to own and sell those chips once they’re made.
Sometimes the line is quite unclear. Decades ago, I was the editor of a tiny newspaper in a lovely little city in northwest Indiana called Rensselaer. It was one of the few cities that owned and operated all its utility services. Rensselaer, population 4,688 in 1970, had its own electric power plant, gas plant, water plant, sewage plant and garbage disposal service. In the suburb at the edge of rural America where I live now, none of those services come from government.
“People pick up the phone and call me when there’s a problem,” said Stephen Wood, the mayor of Rensselaer, when I reached him last week. The city finally stopped running the electric plant in 2019, he said, but it still owns the distribution network – the poles and lines – and sells electricity and gas power it buys wholesale to 3,300 local customers, at rates competitive with what citizens elsewhere pay. The electric and gas utilities employ 17 people in Rensselaer. “I think it works pretty well,” Wood said, with the sort of quiet understatement that my Hoosier parents would especially appreciate.
An even more blurred line between private and public enterprise exists in Alaska, which owns all the oil reserves and other natural resources underground and gives every Alaskan an annual stipend based on the state’s income from sales. The Alaska Permanent Fund has lately paid an average of about $1,600 a year to each citizen. 5You may note that no state is more reliably Republican than Alaska: Its electoral votes have gone to a Democrat only once in its history. There is no citizen groundswell suggesting that the state is slipping toward socialism by owning its natural resources and sharing that wealth with state residents.
Government often steps in when private investors won’t. Maybe a good idea requires too much expensive research and development to be attractive to private capital, or maybe the return on a needed investment is too low to justify an initial expense. That’s why it was the federal government that brought electricity to rural America, starting in the 1930s, and why government investment was used to spread radio nationwide about the same time and begin to explore space in the 1950s and 1960s.
That’s the work of government. It is not aided one whit by politicians who engage in inflammatory rhetoric more than in the tasks that citizens need them to accomplish.
Back when western South Dakota needed cement, a state commission concluded that the best way to get it was for the state to build and operate a plant. Citizens had to first enact a state constitutional amendment to allow the government to own a business. It passed only after it was endorsed by Peter Norbeck, a newly-elected and popular Republican governor.
Norbeck, who went on to serve two terms as governor and win three races for the U.S. Senate, was no closet socialist. He was a pragmatist. His state needed cement, so he got the state to make cement. Oh, and South Dakota also operated stockyards, flour mills, grain elevators, a coal mine, and provided hail insurance.6
Sometimes, you know, government’s gotta do what nobody else is gonna do.
VIEWED FROM UPSTATE
Dispatches from our common ground *
Wherein each week we look around what we call the nation’s Upstates — those places just a bit removed from the center of things — to find illuminating news and intriguing viewpoints, which you might not otherwise see.
This week, we share dispatches from:
Billings, Mont. (The Billings Gazette, billingsgazette.com)
Little Rock, Ark. (Arkansas Democrat-Gazette, arkansasonline.com)
Roanoke, Va. (The Roanoke Times, roanoke.com)
Overland Park, Kan. (The Kansas City Star, kansascity.com)
NOTE: The complete “Viewed from Upstate” section is available only to paid subscribers. Thanks for your support!
Are there markets for all that wind power?
Construction will begin this summer on Montana’s biggest wind farm, a 750-megawatt installation with operations in three counties. People have been wondering where all that power will go, and now a first contract has been announced: Puget Sound Energy, which serves the Seattle area, will buy 350 megawatts, enough to power 140,000 homes. In The Billings Gazette, Tom Lutey reports why the Montana power is attractive to Washington utility operators: The wind peaks in Montana during times of the year when it’s flagging in the Northwest. (One of these days, all the ongoing research into large-scale energy storage will yield a cost-efficient way to store all that power, and this sort of problem will vanish.)
ACLU takes on Arkansas law targeting trans youth
Unless a court intervenes, a new law will take effect July 28 in Arkansas that effectively bars medical treatment for transgender youths in the state. According to the the Arkansas Democrat-Gazette, leading medical associations consider gender-affirming treatments, such as those which the law would bar, to be the best practice for trans people, and potentially life-saving. The American Civil Liberties Union has filed suit, claiming the ban is unconstitutional. But the state’s attorney general, Leslie Rutledge, vows a fight to uphold the act. "I won't sit idly by while radical groups such as the ACLU use our children as pawns for their own social agenda,” Rutledge says.
Independent report slams state military college for racism, sexism
Forced by a U.S. Supreme Court ruling, the state-funded Virginia Military Institute finally admitted women in 1997. But even a quarter-century later, the few women of VMI complain of a campus with rampant sexism, and cadets (as students are called) of color say racism is prevalent. According to a report by Amy Friedenberger in The Roanoke Times, those concerns were sustained by an intense independent investigation, which cited “institutional racism and sexism” and noted that sexual assault is “prevalent” on the campus. The institute’s new superintendent, retired Army Major Gen. Cedric T. Wins, who is the first Black American to head the school, vowed “zero tolerance for that kind of behavior.” But the report concluded that unless the college confronts reality, “it will remain a school for white men.”
Still reigning: the best place in America to raise a family
The folks at WalletHub, who pick catchy research topics sure to zip up digital page views, have once again named a suburb of Kansas City, Mo., as the best place to raise a family. It’s Overland Park, which got the same notice five years in a row ending in 2019 — and didn’t get the prize last year probably only because WalletHub didn’t issue the report during the pandemic. Overland Park came out on top of 182 cities surveyed, according to The Kansas City Star, based on cost of housing, local schools, healthcare and recreational opportunities. The city has sustained remarkable growth over the past half-century, and is now the second-largest city in Kansas. (Quick: What’s #1?) It’s not hard to figure out one reason why OP is popular: It’s well-off. Only 3 percent of families in the city have incomes below the federal poverty line. (A: Wichita, of course.)
On a warm Friday night this week, our little city was buzzing with activity. Sidewalk cafes were packed. A nearby clothing store said this week’s business was the best it had ever sustained. And here’s how quickly things change: When a man entered the clothing store wearing a mask, we all did a double-take. Three weeks ago, everybody was still masked.
Answer me this, then, to help my research for another column: What has surprised you about America’s apparent emergence from the shadow of COVID-19 in recent weeks? What have you seen that made you do a double-take? And are you worried?
More on all that soon. Meantime, thanks for reading — with special thanks to paying subscribers, not because I need the money, but because I support the principle that we all should pay for the news that we consume. Or the commentary we like, I suppose.
* And thank you for standing with me on this common ground — that is, our America.
- Rex Smith