Escaping the Periphery: Railroad Regulation as American Industrial Policy

The article examines railroad rate regulation in the United States over the latter part of the nineteenth century. It argues that rate regulation was a form of industrial policy that set price controls upon the age's leading economic sector for protectionist purposes. Inspired by theoretical work on developmental states, it analyzes rate regulation as an effort to impose political developmental priorities and costs on private corporations and nurture a diversified manufacturing economy on the western American frontier. The article situates US railroad rate regulation in comparative perspective in relation to regulatory policies in Mexico and by implication other peripheral economies and then in relation to deregulation within the United States during the second half of the twentieth century. It argues that proactive state policies such as railroad rate regulation help account for the unusual transition of the United States from an exporter of primary commodities to a large manufacturing economy.