IDEAS home Printed from
   My bibliography  Save this article

Retrospectives: Fixed Capital, Railroad Economics and the Critique of the Market


  • Michael Perelman


Where average fixed costs are large compared to marginal costs, competition will drive industry into bankruptcy. During the last century, the chaos that competition created within the railroad industry caused many prominent U.S. economists to reject the market in favor of trusts, cartels, and monopolies. They created the American Economic Association to counter the prevailing laissez faire theory. Nonetheless, some, such as J. B. Clark, still wrote in favor of abstract laissez to counter socialist and populist agitation.

Suggested Citation

  • Michael Perelman, 1994. "Retrospectives: Fixed Capital, Railroad Economics and the Critique of the Market," Journal of Economic Perspectives, American Economic Association, vol. 8(3), pages 189-195, Summer.
  • Handle: RePEc:aea:jecper:v:8:y:1994:i:3:p:189-95
    Note: DOI: 10.1257/jep.8.3.189

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Foreman-Peck, J S, 1987. "Natural Monopoly and Railway Policy in the Nineteenth Century," Oxford Economic Papers, Oxford University Press, vol. 39(4), pages 699-718, December.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Panayotis Michaelides & John Milios & Angelos Vouldis & Spyros Lapatsioras, 2010. "Emil Lederer and Joseph Schumpeter on Economic Growth, Technology and Business Cycles," Forum for Social Economics, Taylor & Francis Journals, vol. 39(2), pages 171-189, January.
    2. Michael Perelman, 1995. "Retrospectives: Schumpeter, David Wells, and Creative Destruction," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 189-197, Summer.
    3. Javier Campos Méndez & Juan Luis Jiménez González, 2003. "Old and new ideas in Competition Policy," Documentos de trabajo conjunto ULL-ULPGC 2003-06, Facultad de Ciencias Económicas de la ULPGC.
    4. Michaelides, Panayotis G. & Milios, John G. & Vouldis, Angelos, 2007. "Schumpeter and Lederer on Growth, Technology, Credit and Business Cycles," MPRA Paper 74486, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • B19 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Other
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:jecper:v:8:y:1994:i:3:p:189-95. See general 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: (Jane Voros) or (Michael P. Albert). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.