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"Open Access" and regulation of railroad freight rates.
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[quote user="greyhounds"][quote user="futuremodal"] <P>Yep, it was that overpricing post Ante Bellum that eventually brought in the original railroad regulation. That's always been the way in the US-style capitalism - monopoly regulation. So why didn't railroads also start out as public ROW's supporting multiple private usage? Back then it just wasn't technologically or logistically feasible to do it that way - how do you control two way traffic on a single track without indepth training and complete insider control? Today we have the technology to make comprehensive mulitple user track access relatively easy, and now that integrated rail model is fast becoming a relic of the past along with plank roads and horse drawn barges.</P> <P>[/quote]</P> <P>No, it wasn't. Railroad rates were in a steady decline after the Civil War. Read "Enterprise Denied." The railroad industry was then, as it is now, in a competitive situation that forced productivity gains (reduced cost) through to consumers in the form of reduced rates. The railroads have never been a monopoly. While an individual railroad may be a "natural monopoly" for railcar transportation, it is not a monopoly on what it sells, which is time and place utility for a product. That means a product has to be where it is needed when it is needed to be useful. That is what a railroad sells. </P> <P>[/quote]</P> <P>Hey, Ken. Try reading real historical analysis rather than your monopolist apologist sources. Regulation came about because of railroad price gouging. Otherwise there was no reason for regulation.</P> <P>It's funny, you state "The railroads have never been a monopoly" but you acknowledge that railroads are a "natural monopoly". So which is it? Monopoly or not monopoly? </P> <P>And you think railroads developed innovation by their own volition? Wrong. It was forced upon them by government mandate - air brakes, knuckle couplers, standard gauge, etc. You see, there was not sufficient competition to force these innovations, since roads (what one's existed at the time) were still rather primitive, e.g. none of that alleged competition from trucks you're always harping about.</P> <P>Since you still do not acknowledge product differentiation, it's a waste of effort to dispel your homogenous description of "time and place utility". Obviously, if there's no "time and place" difference between coal, bread, lumber..............</P> <P>[quote]</P> <P>There are many ways to get a product where it is needed when it is needed. That is why railroads are not, and have never been, monopolies.</P> <P>[/quote]</P> <P>Yep, there are many ways to move 10,000 tons of coal from a mine to a power plant. 1 train, 400 trucks, 200,000 wheelbarrows, 500,000 backpacks,.......the number of options are endless! You're so right - railroads aren't monopolies!</P> <P>[quote]</P> <P>Railroads didn't like the decline in rates. They tried to form cartels (perfectly legal) to keep the rates up. The cartels didn't work. Somebody always cheated. So the railroads sought to use the power of the government to stabilize the cartels. The act that created the Interstate Commerce Commission was written by a lawyer employed by the Philadelphia & Reading Railroad.</P> <P>[/quote]</P> <P>So, it was the railroads' fear of internal competition that prompted them to beg the government for regulation to save themselves from each other?</P> <P>[(-D]</P> <P>[quote]</P> <P>I think it is important to keep in mind that Open Access is an unproven, ill concieved, solution to a problem that doesn't exist. Railroads operate in a competitive environment. Are there "Captive Shippers". Well, the GAO says 6% of rail business is "Captive". Which means 94% is "Competitive". So why muck things up over 6% of the business?</P> <P>And I'll argue with the 6%. These shippers aren't in jail. They're not "captives". They've always got an alternative. They're just trying to use the government to transfer money from the railroads to themselves. </P> <P>[/quote]</P> <P>I'll argue with that 6% figure as well, since it is a weakly derived, illogically conceived hypothetical based on a railroad recommended arbitrary R/VC standard, and not an actual physical count of the number of potential rail shippers who have only one physical connection to one Class I railroad.</P> <P>I think it is important to keep in mind that Closed Access is a discredited, maliciously concieved system that has hurt domestic producers in their battle to stay globally competition. It is a problem apparent to all but the most closed of minds.</P>
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