The Liberalization of Infrastructure
Edited by Matthias Finger and Rolf W. Künneke
Chapter 6: The Institutional Economic History of Infrastructure Industries, 1830–1990: Ideology, Technology, Geopolitics?
Robert Millward INTRODUCTION Because the technology and economics of infrastructure industries often involve natural monopoly conditions and the supply of strategic goods and services, the state invariably intervenes in their economic organization and institutional development. That, of course, is a huge subject especially since the intention here is to trace developments over much of the nineteenth and twentieth centuries. However my aim is primarily to explain the differences between countries (Western Europe, Japan, the USA) and this considerably narrows the range of issues. Policy questions about market structure problems are found in every country and often generate similar solutions. What I am going to focus on are the factors which explain differences and see whether there is anything systematic about these differences. The main thrust is to explore how far strategic factors are more important than ideologies about capitalism/socialism/fascism.1 Energy, telecommunications and transport are the sectors under investigation. The chronological story starts with the railways, telegraph, coal, gas and water supply in the early nineteenth century which are then joined by electricity, tramways and the telephone in the late nineteenth century, oil and airlines in the early twentieth century and the technological revolution in telecommunications at the end of the twentieth century. Popular accounts see the changes over time and the differences between countries in terms of a strong commitment to laissez-faire in the nineteenth century, especially in the UK and the USA, and state intervention in the twentieth century in Europe culminating in privatization at the end. That approach...
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