Anyone who has read the 10-part series, “Alaska Emergency Employment Mobilization” already knows American System great projects such as the “Railroad Around the World” have been a feature of Alaska’s development plan for a very long time. This project was first promoted by Russian Count Sergei Witte in the 1890s.
The financial issue today is based on the same dynamic issue that faced Count Witte. How will the project be financed? The authors of this article missed one of the major insights that Count Witte had already solved in his time.
The current authors promote the maximum use of private financing to reduce the need for direct government financing. The problem is that maximizing private financing causes a lack of two important credit mechanisms. Private financing cannot directly increase the money supply through deficit spending or effectively subsidize reserve requirements. Only national governments and national banks have those abilities.
Count Witte who learned Alexander Hamilton’s and Henry Clay’s American System through studying Georg Friedrich List would not make such a mistake today.
Let us continue to learn more through the Alaska State Bank Advocate Facebook page and not forget lessons that have been learned a long time ago.
