Latest example of Adam Smith’s wisdom: Chattanooga, Tennessee. Since the private sector wasn’t going to provide the requisite infrastructure to support 21st-century businesses, the local and Federal (but not state) governments did the job. And now businesses are clamoring to relocate to the city with some of the best Internet access in the country:

Chattanooga rolled out a fiber-optic network a few years ago that now offers speeds of up to 1000 Megabits per second, or 1 gigabit, for just $70 a month. A cheaper 100 Megabit plan costs $58 per month. Even the slower plan is still light-years ahead of the average U.S. connection speed, which stood at 9.8 megabits per second as of late last year, according to Akamai Technologies.

As federal officials find themselves at the center of controversy over net neutrality and the regulation of private Internet service providers like Comcast (CMCSA) and Time Warner Cable (TWC), Chattanooga offers an alternative model for keeping people connected. A city-owned agency, the Electric Power Board, runs its own network, offering higher-speed service than any of its private-sector competitors can manage.

” People understand that high-speed Internet access is quickly becoming a national infrastructure issue just like the highways were in the 1950s,” Berke said. “If the private sector is unable to provide that kind of bandwidth because of the steep infrastructure investment, then just like highways in the 1950s, the government has to consider providing that support.”

The comparison to the Eisenhower Interstate Highway is appropriate. One might also consider the government’s essential role in providing electricity, water and flood control, and a host of other infrastructural necessities on which businesses rely.

Businesses need to make a profit. It’s what businesses do. No ethical (or rational) business would or could build something like public infrastructure. If a CEO were to propose building a, say, city-wide fiber network that would not make his or her company a profit, they would be (rightly) escorted to the door with their personal effects and never allowed back into the building. In fact, they could even be sued.

That is why governments are good for business: they provide an environment in which businesses can provide goods and services, and by so doing earn a profit. Anybody who thinks otherwise should try starting a business in a place with little or no government and see how they fare. Somalia comes to mind.

We should also note that the state government of Tennessee is full of Teapublicans and is a royal mess: they think that the Randians and Paulbots are correct about Reagan’s “government is the problem” crap. Indeed, the state is busily shooting itself in its supply-side foot. The Feds and Chattanooga locals pulled off their huge Internet success in SPITE of their Red State, not because of it.

(Teapublicans like to pretend that Adam Smith was somehow an Ayn Rand/Ron Paul/Rand Paul anti-government ideologue. But anyone who has actually READ his work knows that he was a lot smarter than that: he knew that some things that businesses wouldn’t build on their own were necessary for the people, society, and indeed businesses themselves to survive, thrive, and prosper.)

Mr. Blunt and Cranky