"Railroad Regulation as Industrial Policy"

This paper examines railroad regulation in the late nineteenth-century United States as a form of industrial policy, recovering the role of the state in nurturing the country’s rise as an industrial power. It explores how farmers and small-town merchants mobilized against discriminatory rates and monopolistic practices, demanding that legislatures and courts subject the railroads to public oversight. Their aim was not simply cheaper transport but the transformation of rural and extractive regions into balanced agro-industrial economies. State commissions and, eventually, the Interstate Commerce Commission institutionalized these demands. Against corporate and financial interests, which cast regulation as counterproductive and destructive, government authorities dictated freight-rate structures, ensured broad access to transportation, and forced railroads to invest in local infrastructure. They thus compelled railroads to serve as engines of regional development and diversification: from agriculture and mining to industry and manufacturing. Particularly in the Midwest, this regulatory regime fueled long-term industrial growth, culminating in the region’s emergence as the hub of the automobile industry in the twentieth century.
The trajectory of the U.S., the paper shows, stood in sharp contrast to global patterns at the time. In Argentina, India, Mexico, Russia, and much of Africa, railroads became instruments of extra-local domination. Built with foreign capital, they entrenched extraction, dependency, and colonial control, stunting domestic industrialization. By comparison, the contentious politics of the U.S. reshaped this technology of empire into a foundation for economic development.
This case study forms part of my larger book project, which examines how business and state actors co-created American capitalism. The book argues that the American state—through corporate oversight, antimonopoly, banking, and education—actively orchestrated the nation’s economic leap, challenging long-held notions of the Gilded Age as an era of laissez-faire or governmental absence.