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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
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Posted: Tue Aug  6 22:19:27 1985
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Organization: Pennsylvania State Univ.
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> 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.