This is a tendentious, statist philosophy of infrastructure. America's freight railroads are private infrastructure. They are a paragon of excellence and efficiency, the envy of the world, and they do a damn fine job of turning a profit and being a multiplier at the same time.
If infrastructure is really such a multiplier, people should be able pay for it from the multiples they earn, and the infrastructure owners will turn a profit. This means that more infrastructure gets built, and higher multipliers achieved, until the multiplier is not so big, and they stop. (This is a state where owners earn an accounting profit, but not what the economists call an "economic" profit, that is, it's not any more money than you could make investing anywhere else.)
This is how the price mechanism works, and how the pursuit of profit in a market works, and why capitalism is actually good at making things happen. The alternatives to using the pricing mechanism generally leave you underprovisioning infrastructure (leaving these potential profits on the table), or overprovisioning infrastructure (wasting money), or in a state where people overuse infrastructure in wasteful ways (see the nation's road system, which is very good at connecting things -- but socializing its construction and access has led to ridiculous traffic jams in many cities, and many segments that are heavily accessed by trucks charge extra for the wear and tear through the use of tolls.)
Are there obstacles to realizing this capitalist utopia of efficiency in practice? Yes. Definitely, lots of them, and especially for network-y infrastructure like railroads. Is state intervention warranted sometimes? Yes. Is abandoning the pricing mechanism entirely, because multipliers exist, the only thing to do? No. And even when it is, it is a fraught endeavor. Among other things, the people who benefit are not the same as the people who pay, and the transfers involved can be unfair.
> If infrastructure is really such a multiplier, people should be able pay for it from the multiples they earn, and the infrastructure owners will turn a profit.
Let's say a good quality rail link from Town X to some big center of employment has the following effects:
* Raises attorney Alice's salary from $150,000 to $175,000
* Raises barista Bob's salary from $23,000 to $28,000
* Raises retiree Clive's home price from $300,000 to $400,000 although he'll never set foot on a train himself.
* Allows business-owner Doris to fill a specialist job that previously she hadn't been able to fill, indirectly leading to a better product and improved sales in ways that are hard to quantify, but are probably several times that employee's salary.
Which of those should the rail link owners capture, and how would you propose they do so?
The challenge of for-profit infrastructure is, even if you choose ticket prices to capture 50% of Bob's benefit, you only capture 10% of Alice's benefit, and ~0% of Clive and Doris's benefits.
If infrastructure is really such a multiplier, people should be able pay for it from the multiples they earn, and the infrastructure owners will turn a profit. This means that more infrastructure gets built, and higher multipliers achieved, until the multiplier is not so big, and they stop. (This is a state where owners earn an accounting profit, but not what the economists call an "economic" profit, that is, it's not any more money than you could make investing anywhere else.)
This is how the price mechanism works, and how the pursuit of profit in a market works, and why capitalism is actually good at making things happen. The alternatives to using the pricing mechanism generally leave you underprovisioning infrastructure (leaving these potential profits on the table), or overprovisioning infrastructure (wasting money), or in a state where people overuse infrastructure in wasteful ways (see the nation's road system, which is very good at connecting things -- but socializing its construction and access has led to ridiculous traffic jams in many cities, and many segments that are heavily accessed by trucks charge extra for the wear and tear through the use of tolls.)
Are there obstacles to realizing this capitalist utopia of efficiency in practice? Yes. Definitely, lots of them, and especially for network-y infrastructure like railroads. Is state intervention warranted sometimes? Yes. Is abandoning the pricing mechanism entirely, because multipliers exist, the only thing to do? No. And even when it is, it is a fraught endeavor. Among other things, the people who benefit are not the same as the people who pay, and the transfers involved can be unfair.