© Wikimedia

The Present: Free Market Planes And Government Monopoly Trains

To answer that question, we first have to answer the question of why there aren’t that many trains in America to begin with. How come most of Europe and Asia have made leaps and bounds with high speed rail, but not only are there no high speed systems in America, but our current “low speed” rail systems suffer from crumbling infrastructure and low ridership rates?

Most people would simplify that answer to politics, as politicians constantly bicker over how much taxpayer money to spend on rail infrastructure and proposed high speed rail projects. However, while politics is certainly one prominent factor, it is only but one of many factors, including population density, urban and suburban layouts, property rights, our individualist car culture, and an emphasis on utilizing existing rail for commercial freight over passenger service.

But perhaps the biggest reason for the lack of rail systems, monorail or otherwise, has to be consumer demand.

Here’s a little experiment you can do using an internet search engine: try looking up the prices for a train ride from one location to the next, and then compare the prices to the same trip on a plane. You’ll discover that the plane trip is often faster and more affordable than the same trip by train.

For example, a non-stop trip from New York to Miami by plane would take up to three hours and cost about $129, while the same trip by train would take more than a day and cost up to $155. Is it any wonder then why airlines carried a record number of passengers in 2016 over trains?

In fact, so few people actually ride trains, thus making tickets all the more expensive, that most of the costs are absorbed by the federal government, which subsidizes an average 40 percent of the total per-passenger cost per train ride. Again, is it any wonder that more people choose planes over trains?

© Etsy

This wasn’t always the case. Airline flights were once considered a luxury only for the rich. Everyone else traveled long distance either by train or by car.

That all changed in 1978 when the Airline Deregulation Act was passed, de-regulating the airline industry and removing federal government control over airline fares, routes, and the market entry of new airlines.

Under such massive deregulation, the airline industry was transformed into a more competitive free market that allowed them to offer better services and prices to customers. As Wikipedia explained, this in turn lead to, “a great increase in the number of flights, a decrease in fares, and an increase in the number of passengers and miles flown.”

While the airline industry improved, the railroad industry went far off the rails in the opposite direction. In fact, seven years prior to airline industry deregulation, passenger rail service was losing so much money that private railroad companies were more than happy to confer control to the federal government through Amtrak.

Created in 1971, the government-created for-profit corporation was expected to revive the struggling passenger rail industry through the aid of temporary government subsidies. Nearly 50 years later, Amtrak continues to receive such massive government funding despite passenger rail not improving one bit.

In fact, most of Amtrak’s problems are precisely due to it maintaining such a government monopoly. The Cato Institute explains: “Because of government control, however, Amtrak costs are far higher than necessary. Amtrak provides especially unprofit-able services for political reasons, and it is hamstrung by archaic work rule provisions that make it more expensive than other travel options.”

In other words, while planes became a free market, trains became a government monopoly. The former industry took off into the wild blue yonder, while the latter went off the rails to crash and burn.

© Wikipedia

While most political ideologues would roll their eyes and scoff at the idea of the “free market”, free enterprise has historically been a driving force for public transportation such as rail.

For example, while the transcontinental railroad is often cited as a successful “government project”, the truth is that there were several transcontinental railroads: three publically-funded (the Union Pacific, Central Pacific, and Northern Pacific), and one privately-funded (the Great Northern).

Can you guess which type suffered from financial scandal and bankruptcy while the other became so financially successful that it managed to remain in business for a good hundred years before being merged with other railroads? If you guessed the privately-funded railroad, you’re absolutely correct!

Also, did you know that the New York City Subway was originally privately-owned? Yes, the world’s oldest, largest, and most-used public rapid transit system actually started out as two separate private lines that were inevitably purchased and combined by the city in 1940.

While the New York Subway system loses on average $6 billion annually while suffering regular delays, breakdowns, and overall poor maintenance, in contrast, the Seoul subway system in South Korea provides much better service to its passengers with heated seats, reserve seats for pregnant women and the elderly, free Wi-Fi and cell service, and platform gates to prevent people from falling onto the tracks.

Did I also mention that Seoul’s subway system is privatized and mostly funded by commuter fare while NYC’s system is heavily subsidized by the government? Coincidence?

But perhaps the best argument in favor of privatized mass transportation is Japan, a country world-famous for its high speed rail systems — all of which are privatized and have been for more than 30 years. Again, coincidence? I think not.