Debate Magazine

Economic Myths: Victorian Railways Were Private Enterprise

Posted on the 12 September 2014 by Markwadsworth @Mark_Wadsworth

Sobers repeats the Faux Lib myth:
The State did indeed build the M4, but the growth of Swindon was driven entirely by the building of the railway works by Brunel, which was private enterprise, not the work of the State at all.
Victorian railway companies were indeed privately funded, but without the intervention of the government on behalf of society as a whole ('the State'), they would never have happened; all those railway companies depended very much on the government.
Why?
Because to build a railway from A to B you need to be able to buy up lots of strips of land from hundreds of different landowners; without an Act of Parliament giving you compulsory purchase orders (or whatever they were called in those days), the railways could never have been built.
And why would you want to build a railway from A to B? Because there are people and businesses at A and people and businesses at B; by shortening the effective distance between the two, extra value is created and the railways taps into that added value.
So without 'the State', being the sum total of the people and businesses at A and B and the government to ride roughshod over the rural landowners in between holding out for their ransom payments, the railways would never have been built; and although private individuals stumped up cash up front to build the railways, they got their money back from 'the State' in the end (in ticket prices etc).
PS, all the railways ended up going bankrupt and being nationalised anyway, even though this was not entirely their own fault.


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