The sharpest ironies often are unintentional.
Eating breakfast at a coffee shop in Slayton this past week, I overheard an older farmer in the next booth explaining how adopting “precision farming was boosting his yields and profits.” This method matches seeding and fertilizer rates to small differences in productive capacity across a field.
Then the conversation switched to politics, and the same man opined: “There is nothing that the government does right, nothing that helps the economy at all!” He had no idea of the irony of what he was saying. His improvement in production and income from precision farming would never have happened without government.
Precision farming hangs entirely on precise control of location while planting, fertilizing, spraying or harvesting a field. It uses “differential GPS,” inputting real-time locations to an onboard farm machine computer that controls seed and fertilizer rates or logs production. It may even steer the machine.
The “GPS” part of this technology depends on the Global Positioning System produced by the federal government. The “differential” part is additional data supplied through ground stations. In our state, some 130 such stations are operated by the Minnesota Department of Transportation. These supply “corrections” that augment the accuracy of satellite positioning from being within a few yards to fractions of an inch.
MnDOT terms that degree of accuracy “survey grade,” which indicates an important reason why the government agency most visible for repairing highways is supplying data that farmers use to plant seeds and apply fertilizer. You can use the same technology to guide snow plows and lay out a new highway interchange. And it can replace private-sector surveying.
When my mother had some miles of drainage tile installed in our farm in 1958, the contractors spent days with transit, surveyors rod and stakes. By the mid-1970s, this had largely been replaced by lasers. But now, all that is necessary for a farmer to tile a field is to work with the same receiver-computer in his large tractor that he uses for planting corn.
Savings in time when draining a field, snow plowing a highway or laying out an entrance ramp are increases in economic efficiency. So are higher yields of corn and reduced use of fertilizer and diesel fuel. This is basic economics. Living standards grow; society gets more goods and services to meet people’s needs for the same use of resources.
So given these benefits and the apparent market demand, would — and could — the private sector provide similar resources?
In economic terms, differential GPS has the classic characteristics of a “public good;” it is “non-rival and non-excludable.”
“Non-rival” means the use of it by one person does not mean someone else cannot also use it. A hamburger is rival. If I eat it, you cannot. A tornado warning siren is non-rival. Even if I hear it, so can you. Ditto for a differential GPS signal. My friend John can use it to plant the bottom field on the south quarter, a MnDOT crew 20 miles away can survey for a new bridge and a drainage contractor in the next county can install miles of tile.
Similarly, my hamburger is excludable. The fast-food joint can refuse to give it to me unless I pay for it. But it is impossible to prevent non-payers from hearing the tornado warning. It is also nigh impossible to keep anyone from using a GPS signal itself. One could perhaps encode the differential corrections put out by MnDOT and charge for the service. But the marginal cost of one more user is near zero, so society is best off if it is provided free.
The private sector never would have put dozens of navigation satellites into orbit 40 years ago, because excludability was near-impossible at that time. The investment was tens of billions of dollars, and there seemed to be few uses besides military and navigation. The government was already spending tens of millions on the LORAN system of tower-broadcast navigation signals. And the military advantages on their own were deemed overwhelming enough to justify the outlay.
The military worried enough about enemy use of the signals that for nearly two decades, the signal available to civilians and foreign militaries was degraded to make location less accurate. But as the civilian applications of GPS and the economic productivity boom that might spring from more accurate location data became evident, President Bill Clinton ended the signal degradation near the end of his term.
In the interim, research in both public and private sectors had developed the “differential” part of contemporary technology. Internet communications were also key to this. Indeed, some parts of northern Minnesota still lack the degree of precision available elsewhere in the state because of the lack of reliable high-speed links.
So it was not government alone that got us to where we are, but we never would have gotten here without government.
And as with rural electrification and solid-state electronics of bygone years, we never could have known then how much the new technology would do for productivity, or which markets would develop. Private electric companies refused to string wires to farms because the revenue from a few light bulbs in farm houses would never pay for poles, wires and transformers. No one in 1932 guessed how many electric motors there would be on farms by 1972.
Similarly, when engineers from Fairchild Semiconductor spun off into what is now Intel, no one dreamed of how many applications there would be for integrated circuits. If Cold War fears had not established the U.S. Department of Defense as a back-stop buyer for any electronics innovation, Silicon Valley might never have existed.
This is not new. The history of productivity increases through provision of public goods goes back to the flood control and irrigation programs in the Nile, Indus, Po and Ganges River valleys of antiquity. This history includes chapters like early modern lighthouses that were built without government involvement in some cases, but in such insufficient quantities that economic efficiency still suffered. It is a history that many ignore and that is never discussed in presidential campaigns. But it has a greater cumulative effect on our lives than any individual elected to the White House in 80 years.