this post was submitted on 30 Oct 2023
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It was never nationalized in the first place, well except for that one time during WWI.
“Privatize the profits and socialize the losses” isn’t really a bad idea when it comes to rail. The external benefit of rail infrastructure - in economic terms - far outweighs the internal benefit. Even an unprofitable railway makes a lot of money for the area it serves simply through its existence.
The problem is that if the railway is privately owned, it’s rare for it to be financially sustainable unless there is some significant traffic with relatively low overhead and little competition. Pair this with the U.S. railroad industry prioritizing operating ratios over profits and you get a situation where railroads will actively discourage potential traffic because of its complexity despite said traffic being profitable. Meaning that things that should be going by rail are instead forced to go by truck.
The ideal solution to this is to keep the infrastructure in public hands, which will remove the burden of internal benefit from the infrastructure owner. This will help allow rail transport to improve dramatically. Private companies will still be able to operate trains, however their overhead and complexity will be significantly reduced because they no longer have to be burdened with infrastructure management, and will also only have to operate certain types of trains, rather than one company running the whole railroad. This means that it will be easier to ship things by rail in a similar manner as you would ship by road today.
The solution is them not being privately owned...
Like, you know the reason American rail sucks where it does exist so the freight companies own the rails and would make passenger trains wait for hours for a barely moving freight train...
Right?
The issues with American railroading are deep rooted and go back over a century. They are not, however, an intrinsic flaw of private ownership. Rather, the way we do things here is uniquely fucked up, in fact the railroad companies themselves would likely be better off if they did things more like the rest of the world.
In Japan, their 3 largest railroads are privately owned, and provide the best service in the world. One of the reasons for this is that they actually care about their long term profitability, rather than some hyper-nerdy funny productivity numbers. But the other reason is that they diversified their business to things like real estate. These other holdings are backed up by the existence of the railroad, helping stimulate their growth along with the rest of the local economy. This essentially allows the railroad companies to tap in to that external benefit they provide, but would otherwise never see the results of. The money made there ends up invested back into the railway, keeping everything sustainable.
I’ll be clear with you and say that I support U.S. rail nationalization. But the fact that Japan has that great of a network while being privately owned deserves to be understood by every rail advocate in the west. Especially in the U.S. where it can inform us on our understanding of our own heavily flawed rail network.