Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10.2 9/5/84; site psuvax1.UUCP Path: utzoo!linus!philabs!cmcl2!seismo!rochester!cmu-cs-pt!cadre!psuvax1!berman From: berman@psuvax1.UUCP (Piotr Berman) Newsgroups: net.politics Subject: Re: Supposed monopolies: the railroads (article 3 of 4) Message-ID: <1682@psuvax1.UUCP> Date: Tue, 6-Aug-85 22:19:27 EDT Article-I.D.: psuvax1.1682 Posted: Tue Aug 6 22:19:27 1985 Date-Received: Fri, 9-Aug-85 02:45:59 EDT References: <974@umcp-cs.UUCP> <7800361@inmet.UUCP> <1038@umcp-cs.UUCP> <9562@ucbvax.ARPA> Organization: Pennsylvania State Univ. Lines: 23 > 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.