fagin@ucbvax.ARPA (Barry Steven Fagin) (08/02/85)
Regarding Charley Wingate's conjecture that the railroads were monopolistic way back when, I merely note that they had the benefit of federal land grants and subsidies. --Barry -- Barry Fagin @ University of California, Berkeley
mangoe@umcp-cs.UUCP (Charley Wingate) (08/05/85)
In article <9562@ucbvax.ARPA> fagin@ucbvax.UUCP (Barry Steven Fagin) writes: >Regarding Charley Wingate's conjecture that the railroads were >monopolistic way back when, I merely note that they had the benefit >of federal land grants and subsidies. Unfortunately this is not true; moreover, recent history certainly illustrates the strong tendency towards consolidation. Land grants to railroads were only a factor for those railroads with EXTENSIVE western routes. Eastern lines (such as the B&O) get any land because the government didn't own the right-of-way before the railroad went through. I will not comment on subsidies, because a simply do not have time research this properly; hidden rebates to "preferred" customers, however, were certainly an important factor too. What really casts doubt on this, however, is the behavior of the railroads today. Now it's certainly clear the railroads see a lot of competition from trucks. Most of the healthier railroads have considerable bulk traffic (especially coal) to support them. Against this background, we see that today there are 14 independent class I railroads. In the sixties, before the Staggers Act, there were over 40. Seven corporations own about 90% of the locomotives in the U.S. This will be further reduced if Norfolk Southern is allowed to buy Conrail. New railroads are not being built. It is not unlikely that eventually there will be an attempt to merge most of the remainder. There are now no land grants left. There are no appreciable subsidies. C Wingate
berman@psuvax1.UUCP (Piotr Berman) (08/07/85)
> Regarding Charley Wingate's conjecture that the railroads were > monopolistic way back when, I merely note that they had the benefit > of federal land grants and subsidies. > > --Barry > -- > Barry Fagin @ University of California, Berkeley Here we are. The road (railroad) is a kind of utility, i.e. if it is organized sensibly, then it creates a local monopoly. Consider interstate highways. It doesn't make much sence to create 3 competing highways from Salt Lake City to Albuquerque. Why? Because the necessary capital spending never could pay of. At certain stages the same concerns the railroad. Also, to much of competition is clearly counterproductive, because the networks are not sufficiently developed. Of course, one can point that some markets contain 2-3 highways/railroads. But this is a local oligopoly. Now, why roads, railroads, pipelines, transmition lines etc. were invariably build with goverment intervention (eminent domain, land grants etc)? Because THIS WAS THE ONLY POSSIBLE WAY. I do not argue with Barry, but with libertarian who critisize goverment that it got involved in the economy (whatever the involvment). In many cases state property/regulated enterprizes/supported enterprizes is the only way to go.
mangoe@umcp-cs.UUCP (Charley Wingate) (08/11/85)
In article <7800374@inmet.UUCP> nrh@inmet.UUCP writes: >In his book, "The Tyranny of the Status Quo", Milton Friedman points >out the strong tendency people have to consider that the way things >are done now is the only possible way to do them. Friedman was >one of the people who first proposed income tax withholding from >paychecks. He encountered strong resistance from (guess who?) the >IRS (!) who argued that the way the tax was then collected was the only >way in which the system could possibly work. >As for private road systems, I don't know that much about them -- >I'm told that rural roads in New England were private until farmers >prevailed upon the government to pay for their maintenance (the farmers >didn't like paying the upkeep to ensure their access to cities). >I suspect that without government intervention in the roads system we >would have built differently -- perhaps with less intrusive >fast intercity transport ( more shipping, airships and planes and fewer >railroads and automobiles) I suspect that private road systems would >have continued, had we kept hands-off, but with a certain amount of >irksome toll-gathering. I suspect that the demand for private cars would have inevitably overwhelmed questions of economies of scale. The thing that killed rail passenger travel wasn't cost, but convenience; people wanted to get there faster (so they took planes) or wanted to go more places (so they took their cars). It's not clear to me why we have government-owned roads, as opposed to some sort of a utility. It's quite clear that competition between private road systems could only be possible on an intercity basis; within a town, there simply isn't room for multiple roads to a dwelling. >>I do not argue with Barry, but with libertarian who critisize goverment >>that it got involved in the economy (whatever the involvment). In many >>cases state property/regulated enterprizes/supported enterprizes is the >>only way to go. >Okay, WHAT things actually require the state's intevention? >Only about half of all libertarians are Anarchists (no state). The rest >see some functions as best supported by the state (defense is an obvious >one). It seems to me that current-day libertarians do not so much >insist that the state not do anything as insist that it's actions be >*FULLY* justified. In a great many cases, (say 80-98% by expenditures >of the current government functions) the government DOESN'T justify >itself as being "the only way to fly", but merely attracts enough >lobbyists and political hacks to extend itself in whatever directions >seem most politically profitable. I find it curious that defense is universally singled out as the one function libertarians universally delegate to government. Nowhere does the association between government and industry cause such economic distortions. I think it is safe to say that, if normal economic pressures prevailed, the defense industry would be radically different. Few buyers pay for as much incompetent workmanship. So why protect the defense industry? >Just for example, the government need not be the way to supply old >age pensions, but it insists on doing it (and has badly mismanaged >the system at that). The government need not be the mechanism used >for actual provision of schooling (whatever you may think about >it's right to require schooling). The government need not be the >people to provide postal service (but we are warned of hideous >consequences by postal worker's unions if the government gives up >this function). I think it's fair to say that the reason why all of these functions were acquired by the government was that people wanted to be surthey were done. It is certainly arguable whether many of these should continue to be done by the government directly. BUt compulsion to see that these services are performed means some sort of governmental coercion. One can argue at great length whether we should have government services or licensers. I think it would be hard to show, though, that market forces would (for instance) guarantee postal service for everyone. C Wingate