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Mises Institute · Wednesday · 36 min

Chapter 3. Cartelizing the Railroads

Competition among the trunk lines meant lower rates and better service, so the railroads tried pools to stop it—and the pools kept collapsing, because without government coercion some member always defected with a secret rebate. Patrick Newman shows how the Interstate Commerce Commission supplied the enforcement common law would not, with commissioners reading their mandate in the railroads’ favor and cartelization temporarily strengthened at the shippers’ expense.

0:00-36:55

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Competition among the trunk lines meant lower rates and better service, so the railroads tried pools to stop it—and the pools kept collapsing, because without government coercion some member always defected with a secret rebate. Patrick Newman shows how the Interstate Commerce Commission supplied the enforcement common law would not, with commissioners reading their mandate in the railroads’ favor and cartelization temporarily strengthened at the shippers’ expense.