Can Milton Friedman build a 737?

China has announced a new company that will build passenger jets to rival Boeing and Airbus. The Aviation Week article makes clear that there is a lot of government cash behind this new initiative, just as was the case with Airbus when it was launched in 1970 to compete with Boeing. Free market economists generally deplore this kind of thing, but can you make a case for an exception in a field like commercial aviation? The travelling public and the global economy has clearly benefitted from the existence of Airbus, since it has prevented a Boeing monopoly and generally helped to make air travel cheaper and more efficient. But given the huge up-front investment required to build commercial jets and the likelihood that investors would have to wait a decade or more to see return on their investment, it's hard to see how a company like Airbus could have come into existence without government support.

I await the scorn of Friedmanites and Hayekians.