THE PACKERS, THE CAR LINES, AND THE PEOPLE. Brad DeLong delivered a keynote address to an investors conference at Pebble Beach. He draws some analogies between the long-distance network of today and the railroads of 100 years ago. The key points are on this slide (the Professor kindly provided his entire slide presentation.)

I do wish, however, that people would get their facts straight about the railway mania in the United States. The Northern Pacific ("And like our internet bust, there were moments when investors in New York and London suddenly realized that they had been total fools and idiots to sink their money into a railroad running west from Duluth across northern Minnesota when next to nobody lived in northern Minnesota, or would live there for a generation.") and the Credit Mobilier ("The biggest of the railroad frauds took place in the 1870s, when it appeared that the Union Pacific was bribing 1/3 the U.S. Congress, and that the Central Pacific--run by Crocker, Hopkins, Huntington, and Stanford--had paid an extra $40 million to a construction company owned by--guess who?--Crocker, Hopkins, Huntington, and Stanford. Money that the largely-British investors in the Central Pacific had thought was going into earth-moving and track-laying went, instead, to form the core endowment of a great West Coast University.") scandal might well have involved financial (mis)management and irrational exuberance, but the provision of subsidy in the form of land grants certainly provided a powerful spur toward building railroads. On the other hand, as noted here, the one non-land grant railroad, the Great Northern, choosing to go further north than the Northern Pacific, found the easiest northern crossing of the Continental Divide that Lewis and Clark heard about but could not find.

Professor DeLong does provide the case for lowering trade barriers, however (think of the Commerce Clause establishing a customs union among the states). "But what if the Massachusetts legislature were to require--for reasons of health and safety, of course, with the desire to protect the jobs of Massachusetts voters who worked in Massachusetts slaughterhouses or on Massachusetts farms the furthest thing from their minds--that all meat sold in Massachusetts be inspected, live and on the hoof, by a Massachusetts meat inspector, in Massachusetts, immediately before its slaughter? Then Swift and Armour's business model--their profits, the lower prices of beef and higher standards of living for Massachusetts consumers--evaporate."