Railroad Influence Lingers

During the 19th century and into the 20th, the phrase "running like a railroad" summed up the ideal of many American managers. Railroads pioneered so many new ideas, and with such impact, that managers of other businesses emulated whatever they did. But not everything inherited served us well.

In the 19th century, Britain and the United States were the only two countries with the wealth to finance railroads; all others had to resort to government financing. Within a few decades railroads became huge monopolies, so heavy regulation began with the Interstate Commerce Commission (now defunct).

Other legacies from the rise to the rust of railroads:
  • Time zones began as "railroad time."
  • Industry standards (track gauge the most noted)
  • Engineering schools; professional societies; management as a "profession."
  • Big-time political lobbying (to get land grants at first).
  • Emphasis on ROI as a fiduciary duty to shield boards from financial raiders.
  • Bureaucratic organization to make board control easier.
  • Santa Clara County vs. Southern Pacific (key Supreme Court case that recognized corporations as persons before the law.)
  • Much early union organizing centered on railroads.
From 1840-1890, railroads displaced canals for hauling freight, and kept growing rapidly, opening much of the country to development. After growth topped out, speculators kept agitating for it. By 1900 the railroads were degenerating into regulated humdrum, and after 1950, they shrank, giving way to motor vehicle traffic. 

In summary: major technical advances; major economic impact; constant conflict between investors and other stakeholders. 
RELATED ARTICLESExplain
Compression Thinking
Compression vs. Expansion Thinking
Expansion Economics
History - how did we get this way?
Railroad Influence Lingers
Max return to capital
Involuntary servitude
Service Industries
Graph of this discussion
Enter the title of your article


Enter a short (max 500 characters) summation of your article
Enter the main body of your article
Lock
+Comments (0)
+Citations (0)
+About
Enter comment

Select article text to quote
welcome text

First name   Last name 

Email

Skip