In this post, Tim West talks about supporting government-funded things that will yield more in benefits than in projected costs.
Okay, that's a sensible approach, and one that most Americans would agree with. The problem though, is that lobbyists for almost any program can "prove" how their pet program is cost effective. Harry Browne has already addressed this, however (see #4 and #6).
But, back to the real world. People want to vote for candidates that support things, not candidates that simply don't not support things. In other words, people running for office have to be able to talk about something constructive while campaigning.
So what's wrong with the government commissioning things to be built, owned, and managed by private companies? This is [surprisingly] what the City of Minneapolis has decided to do with a city-wide wireless internet network (I discuss this here). Instead of wishing that they'd discovered the key to making socialism successful, Minneapolis is saying, "Look, it's in the city's best interest for people to have internet access at any point in the city. It just makes sense. But we don't know the first thing about setting up such a system. So we'll call for bids from a company or many companies who have something to offer, and we'll help steer the city-wide network in the direction that's best for the city."
If private companies haven't stepped up to fulfill a need (which is the ideal situation, but doesn't always happen quickly enough), I think it's acceptable for the government to lead by "pushing." Not forcing; pushing. Governments (particularly local) can push society in the right direction by commissioning private companies to create things that will satisfy some community-wide need. Governments shouldn't own the businesses or industries whose growth they seek to stimulate; instead they can help in the development and planning of such businesses (but not with an overwhelming amount of control), and perhaps offer temporary advantages as part of the award of the commission.
For example, a city government could offer a one year, protected monopoly to the first company that builds a city-wide wireless network. After they year is up, the market is opened to competition. It's almost like a patent...it offers temporary protection from competition in exchange for an advance in technology. Sure, it's not ideal, but it gets the job done and is minimally socialistic.
UPDATE: For comments, see the original blog post here.