The Vanishing Hand: 19th-Century French Edition

16 February 2011 at 2:46 pm 2 comments

| Dick Langlois |

Haven’t read this yet, but it looks interesting. Note also the futuristic publication date.

On the Origins of Vertical Unbundling: The Case of the French Transportation Industry in the 19th Century
Guy Numa
European Journal of the History of Economic Thought, Vol. 20, No. 2, 2013

The paper retraces the origins of the unbundling of infrastructure, which is a monopoly, from services, which are subject to competition. Using the case of the railroad industry in France, I examine how both natural monopoly theorists and legislation dealt with this subject in the 19th century. I argue that the origins of vertical unbundling date to this period with legislation pertaining to inland waterways and railroads. This was particularly the case for the railroad industry due to pricing and competition rationales. I analyze the writings of Dupuit and Walras and show that they both agreed that infrastructure and services had to be unbundled for the inland waterways. In contrast, they expressed different justifications to defend the monopoly for the railroad industry. Following a chronological progression, the first section explores the origins of unbundling in legislation. The second section analyzes how theorists approached the way railroads had to be managed. Throughout, I highlight the interplay between their work and legislation.

Entry filed under: - Langlois -, History of Economic and Management Thought, Public Policy / Political Economy, Theory of the Firm.

Not Entirely Sure I Got This… Mario Rizzo’s Graduate Course in Behavioral Economics

2 Comments Add your own

  • 1. Warren Miller  |  16 February 2011 at 4:30 pm

    I assume that the EJHET can tell us about the 2012 election results in the U.S. . . . .

  • 2. FC  |  16 February 2011 at 5:09 pm

    Numa Numa yay!

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