Insurance is critical to our economy and our lives and, taken as a whole, surprisingly big. Americans spend nearly as much each year on insurance coverage as on food. But insurance rests on a promise that, if the worst happens, you will be protected. Why should we believe that promise? Because for nearly 200 years, state governments have audited insurance companies’ books and watched their payment records to be sure they keep their word.
State governments began licensing doctors, lawyers, engineers, and other professionals in the late 1800s. They did it because colleges were turning out highly trained people who found themselves surrounded by con artists and quacks. The professionals turned to the states for help. In the century and a half since, licensing has raised professional standards and given us some assurance that those we depend on for expert advice are trained and acting in our best interests. For this, we can thank government.
The most transformative technology of our era started out as a government project and was supported mostly by government funds until it was discovered by businesses in the 1990s. Here’s how the internet became the preferred way of connecting computers and creating an online world, why this government creation beat out private competitors, and what it tells us about the role governments play in economic development.
In the 20th century a remarkable partnership between the federal government and the states and localities transformed American farming by teaching farmers about new crops, methods, and technologies. Imagine what something like cooperative extension could do in the 21st century for people living in cities and suburbs. Here’s why this government program worked so well in the past, and why it might be a model for our times.
The National Weather Service has created a huge infrastructure of radar, satellites, ocean buoys, aircraft sensors, hurricane-hunting airplanes, and volunteer storm spotters to keep us aware of changing weather conditions and warn us of approaching storms. These forecasts and warnings are growing more accurate by the day. So what does the government charge for this life-and-death service? Nothing. Public safety is one reason we have governments.