American Socialism (6)

In the 1930s, an intellectually honest argument could be made that the market, unassisted, would not provide electricity to rural areas within a reasonable period of time - if ever. In 1935, as part of the New Deal (see also effective economic stimulus), the Rural Electrification Administration (REA) was created to subsidize electrical service to rural and remote areas of the United States.

Similarly in 1934, the Telecommunications Act provided for subsidies, in the form of excess charges in urban areas, levied by monopoly provider AT&T, to make telephone service available in those same rural and remote areas.

Although the REA was - and still is - socialism at work, the program was initially successful and created real wealth in a manner that the market could not have done. It is also likely that near universal telephone service - at least prior the invention of the cellular phone - would never have been achieved without subsidies.

The real issue is why, seventy five years after their creation, when there are few parts of America lacking basic electricity supply or telephone service, the REA and the Universal Service Fund still exist to provide subsidized loans to commercial businesses and jobs for bureaucrats.

Perhaps America - supposedly the land of free enterprise - should take lessons from India, much of Africa, and other developing nations, where affordable, unsubsidized, cellular telephone service will soon be available almost everywhere.