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In "Railroads and American Economic Growth: Essays in Econometric History", 1964, Robert W. Fogel, the father of modern econometric history, found that railroads were not indispensable to American's economic development. This claim seems contrary to common sense.
Are there more recent studies thatconfirm or rebut Fogel's conclusion?

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I don't have the quantitative (computational) answer you are looking for, but I think that railroads were indeed indispensable in the sense that early on rivers constituted an all-important network for commercial trade. Due to geographical reasons and seen on a continent scale they mainly flow North-to-South (i.e. parallel to the Rocky Mountains). With railroads 19th century pioneers were able to push East-to-West on a substantial scale. –  Drux Jun 9 '13 at 6:51
    
In terms of pure $$ of freight carried they probably didn't matter - and probably don't today. But in making the west coast feel that it is part of the same country as Washington they were as indispensable as telecoms or TV is now –  none Jun 9 '13 at 16:47
    
@mgb I'd not be so rapid as to claim that the freight didn't matter. The railroads have always enabled large volumes of goods to quickly reach areas remote from their origin, even now that is their main raison d'etre. Things too large or heavy for aircraft and trucks, that need transport faster than possible by ship or to areas ships can't reach are transported by rail. Prime example are fuel, raw materials, etc. etc. without which the industry in the US heartland could not exist, and the products of that industry moving both east and west. Without railroads the heartland could not prosper. –  jwenting Jun 10 '13 at 8:11
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Is the study available online? –  DVK Jun 10 '13 at 9:42
    
@Mark, but it was nice to start this question reminding Pitagora & Plato! –  user2237 Jun 10 '13 at 18:40

2 Answers 2

Fogel's contention is disputed by at least two other economists. http://en.wikipedia.org/wiki/Rail_transport_in_the_United_States

One of them is Walt Whitman Rostow, who specialized in the study of the "take-off" of developing countries. His argument was that railroads turned the U.S. from a developing to a developed country around 1840 not only because they improved transportation, but because of their "spillover" effects on creating demand for manufacturing and banking, two other important sectors.

Albert Fishlow argues that by 1890, the savings on using railroads versus alternate forms of transportation amounted to 15% of GDP, more than twice Fogel's estimate of such savings.

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The literal answer is no. What most people would describe as a reasonable answer is yes.

Russia, and the central Asian countries such as Kazakhstan and Afghanistan are examples of what development is like without efficient transportation. Are they more developed now than 100 years ago? Certainly. In comparison to the US? Absolutely not.

Development in the US would have been along coasts and rivers in the 19th century, and would have been slower. With the discovery of oil, we could then build the road system and aircraft that make up much of our economic backbone now. However, extracting and distributing oil requires large amounts of steel, and the process of moving the raw and finished goods associated with steel involve significant weight, and much of the resource is inland. While motorcars appeared almost instantly with the availability of oil, heavy duty trucking only emerged toward the end of the 1930s. Therefore, development that began in the 1820s would have been deferred until the 1930s. The US, in that case, might look more like the Ukraine or Romania.

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+1 for the unconventional view that relatively lacking economic development in places such as former Soviet Union republics and Afghanistan depended a lot on lacking transportation (train) infrastructures; one usually reads about perceived limitations of their political (prior to and during Communism) and cultural (i.e. Islamic) circumstances first. –  Drux Jun 26 '13 at 3:52
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@Drux The two issues may not be as unrelated as it seems. The Sovier railway system, while impressive in its statistics was micro-managed from the centre and was in consequence - when you look at efficiency metrics such as average speed - very much below Western standards. –  Felix Goldberg Jun 26 '13 at 9:02
    
@FelixGoldberg Yes, I see. Transportation-wise, Russia must also have been at a relative disadvantage, because (FWIK) its major rivers flow north, up to the Artic sea. –  Drux Jun 26 '13 at 10:58
    
@Drux to compound on Felix's excellent comment, those political and cultural systems may hamper the development of an effective transportation network, or harm peoples' recognition of the need for one (the USSR's tendency to want people to stay put comes to mind, if you don't want your population to travel, best way to accomplish that is to not have the means for them to travel). The reduced economic development is then a direct result of the lack of transportation, an indirect result of that culture/policy. –  jwenting Jun 26 '13 at 11:24
    
@jwenting Of course, an enlightened Western government, given its political and cultural system, would never "hamper the development of an effective [communication] network, or harm peoples' recognition of the need for one", or would it? Maybe the guy currently at Moscow airport knows also about this :) My point is: transportation in Russia must have developed under many special "gray" circumstances, "black" Communism being only one I guess. –  Drux Jun 26 '13 at 11:46

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