Léon Walras On Industrial Regulation: Railroads As Economic And Moral State Monopolies
AbstractModern microeconomics foundations of industrial regulation policies were developed during the second half of the 19th century. One of the main theoretical and applied debates which is still an issue today concerns natural monopolies. Railroads were at the center of these debates, because of their technological and industrial significance. The main question raised at this time was the participation of the State on the provision and regulation of this industry.In France, between the 1840s and 1880s the evolution of regulatory legislation was deeply related with the academic contributions, in particular coming from liberal economists belonging to the Société d´Économie Politique. The dominant views among these French economists advocated for a Private provision and incentives to create competition within this industry and some defenses of a private-public partnership through concessions. Contrary to this point of view L. Walras was in favor of a purely public provision of railroads and transportation.Walras´s point of view was developed with twofold argument of theoretical and a moral nature. This paper analyses the logic and coherence of these arguments and concludes that they are constructed upon an original vision on human nature and economic dynamics that contrast with the traditional views on Walras´s pure political economy. The case made in favor of the State intervention on Railroads industry considers altruistic motivations of human action, public servants surrounded by democratic institutions as free press and the role of education. On the economic side we found an interesting dynamic argument based on the importance of the network nature of railroads, the possibility for the State to improve the general economic development through the impetus given to railroads and the possibility to take advantage of the monopoly rents of some railways in order to finance new parts of the network. These ideas are mainly establish trough a dynamic conception of the development of the railroads network and its consequences on economic growth.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by UN - RCE - CID in its series DOCUMENTOS DE TRABAJO - ESCUELA DE ECONOMÍA with number 006969.
Date of creation: 10 May 2010
Date of revision:
Contact details of provider:
L. Walras; Monopoly; Railroads; Economic Regulation.;
Find related papers by JEL classification:
- B13 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Neoclassical through 1925 (Austrian, Marshallian, Walrasian, Stockholm School)
- B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
- L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
- L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Vladimir Leonardo Celis Agudelo).
If references are entirely missing, you can add them using this form.