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From the mid-1600s, the ideas of Jean-Baptiste Colbert, a French prime minister, dominated economic views: Economies needed government action to grow and produce prosperity.
It became clear, however, that there are exceptions. Free private markets might lead to optimal production of buggies and beef roasts, but not of bridges or schools. Moreover, without government actions, polluting industries harm others and waste resources.
Bridges and schools have "external" or "spillover" benefits to society in a way that their costs cannot be captured entirely by tolls or tuition. Not enough bridges are built or schools opened to meet our needs without government action. Pollution and other negative side effects of some economic activities impose real damage to society, the costs of which polluters would never have to pay. Without government, people will face too many of these external costs without having been responsible for their cause.
So consensus wisdom now is that government must act to produce "public goods," such as education, transportation and health, whose benefits spill over to all in society. Government should limit activities with external costs like pollution. If regulation to stop polluting activity is not practicable, government rather should subsidize activities that mitigate harms.
That leads to a discussion specifically of U.S. agricultural policies and government-supported scientific research.
The "dust bowl" days in the 1930s showed soil erosion was an environmental problem. Blowing soil from farms harmed millions downwind. Congress set up a Soil Conservation Service within USDA and appropriated money annually to subsidize conservation measures.
The 1996 farm bill authorized and funded a new Environmental Quality Incentives Program (EQIP) that, among other measures, paid 75% of the cost of improvements needed for farmers and ranchers to implement rotation grazing systems.
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