>Fast forward to today. Is it right that the government should build infrastructure to compete with existing private businesses? Should they build and operate grocery stores? Automakers? ISPs? Textile factories?

There is absolutely nothing wrong with building public infrastructure considering in many cases the infrastructure in question would form a natural monopoly. However, car manufacturers, grocers, textile factories have lots of competition. Those markets are very healthy.

American ISPs fail to provide good service even in wealthy locations. Google had to stop their gigabit fiber rollout. That's definitively a failing market where a baseline of service should be provided by governments. Private companies can always provide superior service and charge for it.