In developed countries, rail transport is usually provided at financial loss, and needs to be subsidised by governments. In countries who have refused to do so (mostly on the American continent), passenger rail transport has become anecdotal and rail remains used for freight only, while in countries who subsidise their rail network (mostly on the European continent), rail transport has decreased significantly since the 1950s. Government subsidy leads to many problems such as the imposition of cost-saving measures on rail transportation companies, preventing them from doing their job well.

  • They are constantly looking for small, less profitable lines to close.
  • When it's not the line it's the individual stations that might be considered unprofitable and are closed.
  • They reduce the frequency of services, which by itself makes passenger trains much less attractive as the mean time of waiting for the train increases dramatically, which results in fewer passengers and an even less profitable line.
  • Even if none of the above happens, transportation companies might be unable to buy new vehicles and may have to maintain their service with old and obsolete vehicles.

However, rail passenger transportation is, from a purely engineering point of view, much more efficient than road transportation (both private vehicles and buses):

  • Higher passengers per hour theoretically possible on a given line. A road lane can have a vehicle at most every 2 seconds, so if we assume 1.5 per vehicle (optimistic figure) that's 2700 passengers per hour. Rail can have 500 passengers per train and 8 trains per hour easily, that's 4000 passengers per hour.
  • Because rail friction is smaller than that in pneumatic tires, the energy spent to transport each passenger is typically much lower (according to this wikipedia page Passenger transportation by rail requires less than one-tenth of the energy needed to move a person by car or plane)
  • Maximum speed much higher: a maximum speed of 115 km/h is usual between villages for regular trains; up to 200-300 km/h is common for high speed trains. In most countries cars can only go up to 80-90km/h between villages and 120-140 km/h on an autobahn, but even then traffic congestion makes such speeds rarely attainable, while traffic is planned in advance for trains and is a much smaller problem. (If, like in some countries, trains are running slower and/or traffic is poorly managed, that's because no effort was made and not an inherent flaw of rail.)
  • Much better safety: in Switzerland 2017, there were almost 18,000 people wounded or killed by road, only 57 people wounded or killed by trains (excluding suicides), this makes road 312 times more hazardous than rail.
  • Train passengers can perform another activity during the ride, an option which is limited in road transport, even for non-drivers, as the comfort and space available is much lower. (Unfortunately some trains can also be uncomfortable but this is due to bad wagon design and not an inherent flaw of rail transport.)
  • Rail transport is resistant to poor weather condition: fog, frost, snow, rain cause fewer problems than with road transportation.

Theoretically, by the mechanisms of economic freedom and concurrence, offer and demand, capitalism automatically finds an optimal solution. This does not seem to work for transportation, as the optimal means of transportation (energetically speaking) is not financially profitable and needs to be government-subsidised, while an extremely sub-optimal solution (road transport) is economically preferable.

What is the capitalist solution to make rail passenger transportation economically profitable again, like it used to be before road transport was a thing?

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27 Answers 27

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The idea that "trains are unprofitable" is quite a bit more complex.

First of all it's necessary to look at the main "problem" with trains: They tend to lead to natural monopolies. Setting up a rail network requires a lot of government involvement (otherwise you will never be able to get your hands on all the land you need) and once a rail network is set up it's practically impossible to set up a competing rail network. The result of this is that whoever controls the rails controls the entire market. This causes the government to always be involved with train companies, thus bringing with it the inherent government inefficiency (even though not involving the government at all would be worse, so it's not a case of government failure).

Next it's important to look at the primarily socioeconomical benefits (the positive externalities) of having a rail network. Having a strong public transport system allows skills to move more freely throughout a country and allows employment demands to be met more flexibly. This is especially important for people who are less economically well off. And beyond that trains provide a well developed electric transport option, thus keeping greenhouse gas emissions at a minimum. And also importantly trains are amazing at decreasing peak loads on important roads, thus it's often economical to invest a bit in train travel to prevent a lot more investments in a road network for those two peak hours a day.

The reason why trains failed in the US was primarily for political rather than economical reasons. Trains (and other public transport solutions) became "unsexy" politically, whilst at the same time car travel became extremely popular (linked to the "american dream") and subsidized. Both explicitly through investments in the road network and implicitly

Road travel is massively subsidised in the sense that the negative externalities of travelling by car, including the release of carbon dioxide and other greenhouse gases, are not fully offset, and most major highways—which cost tens of billions to maintain—are still free of tolls. [...] Petrol is cheaper than in Europe (mostly because of much lower taxes).

Source: https://www.economist.com/the-economist-explains/2013/08/29/why-dont-americans-ride-trains

So the real economical question would be: If all roads would be toll based to account for the road building costs + fuel would be properly taxed, how would that affect train travel? Right now train travel faces economically "unfair" competition in a lot of countries and that's without even considering the positive externalities that train travel brings.

  • Comments are not for extended discussion; this conversation has been moved to chat. – Sam I am Oct 3 at 20:18
  • I don't know if the situation anywhere exist. But if rail would managed like roads, it might change the whole picture. Roads are build and maintained by the government. And private companies can use them freely (or at a cost/toll on certain types of roads). Rail ten to lead to monopolies. Only because government allows it. If government would only be responsible for the tracks. Then private companies can put the trains on it. It is comparable to aviation where government controls the sky, but not the planes. – roel Oct 4 at 8:20
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    The comparison is a bit unlikely, @roel. The sky is pretty big, it's not that big a deal to have 500 planes using the same airspace, but just 10 trains using the same track is already going to be almost impossible because only one train can use the track at the same time. – Theik Oct 4 at 13:43
  • There is another cost to consider (at least in the US): labor. My understanding is that at least until fairly recently, labor union contracts required the presence of a "fireman" on a locomotive. In the days of steam locomotives, a fireman's job was to feed coal to the steam furnace; but almost all locomotives have been diesel or electric for a long time. – David Oct 4 at 16:29
  • @Theik and this is a particular issue in heavily travelled corridors, such as (in the US) Boston to Washington DC and San Fransisco to San Diego -- i.e. precisely in those places where population density makes rail more viable economically. – David Oct 4 at 16:34

Japan is a counter-example. Rail is profitable there, not least because the rail companies don't just run the trains. Train stations become hubs, often with a shopping centre built around them (owned by or in partnership with the train company), even parts of new towns. All this extra revenue helps keep the transport side profitable, and helps justify a high level of service by viewing it as a feed for the other profit sources.

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    Similarly the Disney is the exclusive owner of one of the most traveled Monorail systems in the world (Walt Disney World Monorail system). Since it began operation in 1971, the system has had exactly one fatal incident in it's life time service (Though several emergencies with minor injuries) – hszmv Sep 28 at 19:32
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    One important difference between the USA and Japan is the geography. Japan is a very populated country with the major cities laying along the coast due to the mountainous areas in the centre of the islands. This makes it suited to the 1 dimensional travel of trains. Compare this to the USA which is large, not densely populated and is much more easily traversed over 2 dimensions. – Damien Golding Oct 1 at 4:20
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    @DamienGolding Your comment also highlights one area where there is still passenger train travel in the US: between DC and Boston via Baltimore, Philly, and New York. It’s a relatively densely populated corridor that is fairly linear, and also major stations are well served by local public transport such as metro/subway and bus lines. However, this is still a case where it only barely stays afloat via government subsidies. Air travel between DC and Boston can be cost competitive and faster while long distance bus lines are very cheap and popular. – Todd Wilcox Oct 1 at 7:10
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    Rail is definitely not profitable everywhere in Japan; did you mean "in Tokyo"? – fkraiem Oct 2 at 1:40
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    @DamienGolding much of Japan is quite sparsely populated. – user Oct 2 at 8:14

The answer is to stop subsidizing its rival: roads. You say that passenger rail stopped being profitable around the 50's or so: look up when the Dwight Eisenhower freeway project really hit its stride. Your tax dollars are hard at work building a vast, free to use (as opposed to actually free), and convenient transportation network.

While rail does have some limitations, most of them could be solved with technology and scale, both of which are beyond the resources of companies moving bulk materials at rock bottom prices against a virtually free rival.

For better or worse, we picked the winner in 1956. https://en.wikipedia.org/wiki/Interstate_Highway_System

(While this answer is incredibly US-centric you can pretty strongly see governments choosing rail or road, rather than the market, in most countries).

  • Comments are not for extended discussion; this conversation has been moved to chat. – Philipp Sep 28 at 9:14
  • I feel like this answer was excellent up until the update. The discussion around government investment, monopolies and inefficiencies apply equally to roads and rail, so I think a brief mention would've been enough. Big brother and car sharing likewise are interesting issues, but don't seem to address the original question. – craq Sep 28 at 19:24
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    @craq I think you're right – wedstrom Sep 28 at 19:43
  • It may be interesting to see if there are any studies of the costs, to the government, per pound of freight on the Interstate system vs the RR system. Or the cost, to the government, per passenger on highways vs on the RR. – grovkin Sep 28 at 20:40
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What is the capitalist answer to rail passenger transportation being non financially profitable?

The same as a capitalist answer to anything that is being non financially profitable; such as horse drawn buggies; or hand-written manuscripts; or film based personal photo cameras. The exact answer depends on economic circumstances, the options being:

  • Either completely cease investing in, and producing, the good due to lack of demand. For example, horseshoe industry basically died out once horses ceased to be a meaningful means of transportation/farming.

  • Or, if the demand still exists but is served cheaper by a substitute good/service, invest in and produce that better competing service. Examples are too numerous to list (digital cameras replacing film, cars replacing horses, pertinent to your question, commercial air travel replacing passenger rail in sparsely populated country like USA, etc...)

  • Turn into niche/custom mini pocket industry ("artisanal" goods of Etsy type, horse-drawn carriage ridea around New York City's Central Park, audiophile targeted turntables).

  • Reinvent your product so it becomes financially profitable, via new technology or process or business model. I can't come up with a perfect example of the latter at the moment but budget airlines (Ryan Air in Europe and Jet Blue in USA) come to mind.

rail passenger transportation is, in a purely engineering point of view, much more efficient than road transportation (both private vehicles and buses)

As other answers pointed out, that is not universally true. It is especially false in the large sparsely populated areas like United States of America, outside of Acela-corridor (and, ironically, Acela corridor is named that way... after a hugely profitable rail line) and possibly areas of California coast.

... capitalism automatically find an optimal solution. This does not seem to work for transportation, as the optimal mean of transportation (energetically speaking) is not financially profitable and needs to be government-subsided, while an extremely sub-optimal solution (road transport) is economically preferable.

OK, this way of looking at the problem can be addressed in one of two ways; depending one what your view of "energetically optimal" means.

  1. If it's just an engineering quirk, the capitalist answer is "who cares"? The objective value of being "energetically optimal" from engineering standpoint - even if true (as noted above, it isn't in most of USA) - is very small. If that's the case, capitalism did find optimal solution, it just isn't one that your own personal value function prefers.

  2. If "energetically optimal" is just another way of saying "lower negative externalities in the form of negative impact of high energy usage on the environment"; then the answer is to price said negative externalities (impact on the environment) correctly; if they are truly too high, their price will be high enough to make road transport less economically preferable. This is, for example, basically, the economic and political basis for carbon tax.

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    @gerrit - your answer doesn't debunk anything. It just says "yes there are rail lines - which I will ignore 100% whether they are profitable or not - in diverse geographies". What the claim is (that you did NOT in any way debunked) is that geography - or more specifically, mostly population density - correlates with (and probably affects) profitability of the line, before subsidies. – user4012 Sep 26 at 15:48
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    Population density correlates with profitability, yes. That applies to both roads and railways. Lacking any situation where both compete privately in a fully free market where all infrastructure is privately owned, we do not know what the capitalist answer would be. I'd speculate that rural areas would depopulate even more than they do now if residents had to pay the full cost (+ private profits) to private companies for long stretches of rarely used roads. In all likelihood, the 50 km road to a village with 100 inhabitants would never be built in the first place. – gerrit Sep 26 at 15:56
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    @jamesqf He did say basically died out. Yes, the industry is still around, but it's a far more niche industry than it was when people actually used horses as a primary mode of transportation rather than mostly for leisure. – reirab Sep 26 at 17:53
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    @user4012 the roads are built with taxes, are they not? If you would have to pay for every mile you travel on a road not on your own property, your traveling might look differently. – Josef Sep 27 at 11:54
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    @user4012 so your municipal or state government is subsidizing them instead? – Paŭlo Ebermann Sep 27 at 21:54

What is the capitalist solution to make rail passenger transportation economically profitable again, like it used to be before road transport was a thing?

There is no capitalist solution.

All extant capitalist systems exist in an environment of infrastructure for which construction and maintenance is publicly paid (road taxes count as public, users in densely populated area subsidise the ones in sparsely populated areas, the system thus relies on solidarity).

Privately owned roads are very rare. Entire road networks built privately from scratch do not exist. Therefore, the question on how railways and roads would compete in a purely capitalist environment is entirely theoretical, and not answerable based on the real world.

I would speculate that in a fully private system, both the road and railway networks would be much more limited than they are in reality. The 100-inhabitant village would be served by neither road nor rail, therefore soon become a 0-inhabitant village. With the road network much worse under a theoretically fully capitalist system, rail may be relatively more profitable for the rest. But as stated, this is speculation as no such system exists anywhere.

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    Besides the cost of building roads, the cost of the land under them, particularly in urban areas, is a huge subsidy to driving. – Emilio M Bumachar Sep 27 at 3:21
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    @puppetsock I don't understand what your comment is referring to. – gerrit Sep 27 at 9:42
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    @gerrit It's a reference to a 2012 campaign speech by Obama, where he said essentially the same thing you do in this answer – JollyJoker Sep 27 at 13:48
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    @JollyJoker Well, that seems entirely correct, business depends on public infrastructure, to which they contribute by paying taxes. – gerrit Sep 27 at 14:30
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    The 100 inhabitant village would be served by a road if maintaining road access to the village were worth the cost. I know of at least one instance where a private road was built and maintained several miles up the side of a mountain simply because the lady who's cabin was at the end of it was the best chef in the area and told the local loggers that she was getting too old to hike down every day to cook for them. If there's enough traffic to and from the village for a road to be viable, it will be built. If not, it won't be. Neither outcome is inherently better than its opposite. – Perkins Sep 27 at 23:07

Just because governments operate passenger rail systems at a loss does not mean that it is an inherently unprofitable enterprise. It's just that governments have a legal monopoly on the industry, so private carriers can't exist.

I don't know enough about the history of rail transportation in Europe to say how it got the way it is, but in the United States they have AmTrak. AmTrak was started in the 1970s precisely because it had become unprofitable for private carriers to operate. So that kind of proves your point...

Except that in the U.S, passenger rail makes almost no sense purely because of geography. The capitalist answer was to abandon rail transportation because it's almost always better, cheaper, and faster to fly. Even though rail transportation may be more efficient from an engineering perspective, air travel (at least in the U.S.) is far more efficient logistically and economically speaking. Rail freight, however, is still big business in the U.S. because planes have limited cargo capacity, so there is still a niche that air travel can't fill.

In Economics, this process is called creative destruction; society changes and newer technologies come along and render the old ways of doing things obsolete.

Now again, I can't say what would work or not work in Europe. The geography is much different there and it very well could be potentially profitable for private carriers to operate. We'll never know because the option is legally off the table. But that's a public policy problem rather than a free market problem.

So to summarize, the capitalist answer to passenger rail not being profitable anymore is to just stop doing it. Inevitably, the new thing that replaces the old usually makes society better off for it.

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    It's just that governments have a legal monopoly on the industry, so private carriers can't exist. False, private companies exist but they need government subsides. It's not the same as government directly operating the industry. Also there's no law preventing a private company from running a service without government involvement. Except that in the U.S, passenger rail makes almost no sense purely because of geography. Within east or west coast region it'd make perfect sense. Air travel has ridiculously high energy per passenger, that alone makes it inherently inefficient. – Bregalad Sep 26 at 10:11
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    I'd fully agree with you if rail transport was inefficient; the problem is that, technically speaking it is efficient and not obsolete as you called it. It's only financially inefficient; which it shouldn't be because of how capitalism works. – Bregalad Sep 26 at 10:15
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    The Netherlands has privatized rail transport, and mostly it just seems to have made things worse for the passengers. (Even though by international standards, we still have a really good public transit system) – Erik Sep 26 at 12:48
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    @gerrit Hold up: "[Europe] is not much more densely populated [than the USA]". That's just not correct. For being within a couple percentage points for landmass, Europe has more than twice the population (and the European landmass consists of a lot of super-sparse land in the East of the continent). – Delioth Sep 26 at 15:34
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    @Erik the Dutch Railroads have NOT been privatized. They were set apart from government on paper by creating a company out of them. But those companies are still 100% government owned. – Sjoerd Sep 30 at 10:25

To answer your original question, capitalism's answer to passenger train travel not being economically viable is to not provide passenger train travel where it isn't profitable.

Capitalism can only react to changing economic conditions, and it reacts in an economically efficient manner, not necessarily in a socially conscious manner.

Passenger train travel exists where it is economically viable. In the northeast corridor of the US, where trains operate profitably in the major metropolitan areas, it's the cost of parking, cost of auto insurance, and time dealing with auto congestion that makes the train a viable alternative. To reproduce the added expense of heavy urban areas to make passenger train travel viable elsewhere, you'd have to raise the price of gasoline substantially.

However, capitalist societies are also typically democratic societies. Tell the voters you are doubling the cost of gasoline, and they'll set a world record voting you out of office.

A capitalist who wanted to boost train travel might consider addressing the less pleasant aspects of air travel: claustrophobic, occasionally smelly, delays at checkin, delays on the runway, being treated like a criminal... air travel today has become a truly wretched experience. If one can get train speed up to cut the time, then the more reliable scheduling could translate into near aircraft travel time, once one factors in the inevitable delays in air travel today. And infinitely more pleasant.

  • I agree about air travel. It's fast, but in almost every other way, a horrible way to travel. It needs to be relegated to the pages of history. – user1751825 Sep 27 at 3:44
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    Tell the voters you are doubling the cost of gasoline, and they'll set a world record voting you out of office. You don't tell them; you just lie about your prolitical progarm to get elected, then you do this once elected. Works well enough in democracies :) (PS: This comment is intentionally ironical) – Bregalad Sep 27 at 6:25
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    Tell the voters you are doubling the cost of gasoline, and they'll set a world record voting you out of office., possibly. But tell voters in central London, Berlin, or Stockholm that you're introducing a congestion charge to drive into their cities with an internal combustion engine, and lots of local residents may support you. – gerrit Sep 27 at 9:33
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    When I was a boy, I rode one of the last luxury trains, the Super Chief, from Chicago to LA. It was wonderful... relaxed, great food in the dining car, plenty of room to roam around, and you haven't slept until you've been gently rocked to sleep on a train. Many is the time I've been on a wretched flight to and from LA that I remembered that delightful trip. Took 1.5 days... a high speed train could get that down to 14 or 15 hours - leave in the evening, have a great dinner, go to sleep, and wake up at the destination. There's a market for pleasant business travel. – tj1000 Sep 28 at 15:36
  • @gerrit - Ignoring that in a capitalist society, the government does not set prices....You may get local support for something like that but when companies start moving their offices and factories to 'friendlier' cities and those 'local' people start hitting the unemployment lines, you'll lose that support and then some. – Dunk Oct 3 at 23:45

The pure capitalist answer would be simply to stop investing in public transport, and instead invest in profitable alternatives.

Declining investment in public transport is not a problem that 'pure capitalism' can (or even should) attempt to solve.

If public transport should to be maintained, and I believe it should, then it's the responsibility of governments to intervene, and ensure the alternatives are appropriately taxed to reflect their true social and environmental costs.

Private vehicular transport has been shown to have very negative impact on human health, due to air pollution, and encouraging low levels of physical activity.

Private vehicular transport is very damaging to the environment for a variety of reasons which I won't go into here.

If governments appropriately taxed the car industry to reflect it's true costs to society, and the environment, then it would very quickly become much less profitable, and consequently public transport would become more profitable.

As theresawalrus notes, markets optimize for collective utility, not energy efficiency. But the American experience is not an example of this.

The United States has a passenger rail system so lightly used that it could be safely ignored. But it also has the the world's most advanced and profitable freight rail system, and the energy savings from freight rail far exceed the energy savings it would get from a European-style state passenger rail system.

In fact, expansion of the passenger rail system in North America would increase freight rail congestion, driving freight only the highways. This would waste much more energy than it would save. So, at least in North America, the market solution did, in fact, come up with the optimal energy solution. Furthermore, by keeping trucks off the road, freight rail has a measurable beneficial effect on highway safety.

https://www.bts.gov/bts-publications/freight-facts-and-figures/freight-facts-figures-2017-chapter-6-safety-energy-and

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    Please indicate which part of the source supports the most advanced and profitable freight rail system claim. – JJJ Sep 26 at 21:34
  • I think one could expand passenger rail transport without blocking freight transport – of course one would need more rails for that. – Paŭlo Ebermann Sep 27 at 22:08
  • I disagree with your freight contention. Prior to the interstate system the vast majority of freight went by rail. Today, three products account for the lion's share of freight rail in the U.S. (coal for power plants; oil and bulk chemicals, and one other I don't recall right now). Conrail came into existence because so many railroads were failing in the 1970s. – eSurfsnake Oct 2 at 18:44

A Libertarian would say the problem is not an economic one, it is a regulatory one. The reason railroads have limited scope and profitability in the United States is that they were destroyed by Congress and the president Woodrow Wilson. In 1917, Wilson simply seized by dictatorship all the railroads in the country and put them under government control. Ever since then, US railroads have been much less important than if they were privately owned and controlled.

In 1920, the railroads were "returned" to private ownership, but in fact there are government "boards" that decide what people railroads can hire, how much they have to pay them, and control every aspect of railroad development. So, even though railroads are "privately owned", in reality they serve at the whim of bureaucrats in Washington. Needless to say, this does not result in a profitable situation.

This situation could be immediately fixed at any time by repealing the Transportation Act of 1920 and the Railroad Labor Act. Those two bodies of laws are 95% of the problem.

The cost of this oppression of the railroads is heart sickening. Our country has literally lost trillions of dollars in lost productivity due to these two statutes and the attitude in Washington that demands control over railroads. It is absolutely sickening. Our country could have been far larger and wealthy and more successful at every level if not for these laws. In fact, I would go far as to say that if the US government had not seized the railroads and shipping industry of the country in 1917, World War II, a war that cost 40 million lives, might never have occurred, or would have been much less destructive.

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    Can you explain how the 1917 nationalisation of railroads has led to the Nazis invading Czechoslovakia and Poland? I don't follow. This answer also seems to ignore that most European countries nationalised the railways and that passenger rail remains well-developed there (although it did go down substantially when private vehicular transport came along, in particular in rural areas). – gerrit Sep 27 at 9:37
  • @gerritt Wars happen because of economics. There is no simple answer to your question, but if you want to begin to understand it, you could start by reading the books "The Making of the Reparation and Economic Sections of the Treaty" by Bernard Baruch and "Reparations, Trade and Foreign Exchange" by Lawrence Angas. – Tyler Durden Sep 27 at 12:59
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    I appreciate that the causes of wars are complicated and that economics are related to the rise of the nazis, but it does seem a stretch to blame the latter on the 1917 nationalisation of the railroads in the US. – gerrit Sep 27 at 13:01
  • @gerrit I didn't blame the nationalization, you are changing my words. I said that if the nationalization had not occurred, World War II might not have occurred. There were other mistakes as well that, if they had not been made, could have averted the war. – Tyler Durden Sep 27 at 13:06
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    Given the historical grants and shady contracting from governments to rail operators (how did Leyland Stanford get his fortune for Stanford University?), it's kind of weird to claim 19th century US railroads as a paragon of libertarianism. – user662852 Sep 27 at 14:25

Theoretically, by mechanism of economic freedom and concurrence, offer and demand, capitalism automatically find an optimal solution. This does not seem to work for transportation, as the optimal mean of transportation (energetically speaking) is not financially profitable and needs to be government-subsided, while an extremely sub-optimal solution (road transport) is economically preferable.

You are confusing two types of optimality. One of the reasons I love capitalism is that it optimizes profit, not engineering efficiency. And by profit, we mean whether customers are willing to pay for it, as davidbak notes. Since customers are not willing to pay for it, they do not consider the rail system optimal.

And so the capitalist solution is don't invest in trains unless it is profitable. More generally, don't invest in things consumers don't want. Instead, invest in things they do want.

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    This is correct but you can go further and say: The profits depend on the product or service being desirable to customers who will pay for it. Energy efficiency, engineering desirability, a moral sense that something is "better for you": None of this matters if the customer wants something else. And in this case there are a lot of possibilities for that "something else" the people might want - not least of which is the freedom to go wherever they want whenever they want - regardless of whether there is a RR station at point A or point B, or a track between them, or a train to travel it. – davidbak Sep 28 at 17:35
  • @davidbak Thanks, I'll edit the post to reflect this. – theresawalrus Sep 28 at 18:18

History answers this question and corrects its invalid premise - namely: that passenger rail, as such, is not financially profitable.

Capitalism is the as yet untried system where the sole purpose of government is to protect individual rights. Under capitalism there are no government subsidies for individuals or firms. Savers and investors back entrepreneurs and those who are most able at producing are those who create the greatest profits. Excluding dictatorships like N. Korea and Iran, all countries today operate under "mixed economies" - mixtures of freedom and controls (mixtures of capitalism and socialism). 19th century America following the civil war came closest to pure capitalism.

In the 1850s, Congress passed the Pacific Railroad Act which led to the formation of the Union Pacific and Southern Pacific Railroads. Although both firms enjoyed massive government subsidies including loans and land, and although the UP and SP joined in the first transcontinental railroad, they have gone bankrupt multiple times (despite having been combined as Amtrak).

The Great Northern, by contrast, accepted no subsidies, yet completed its transcontinental road and operated profitably for decades with never a bankruptcy. Its focus on profit caused it to choose land and materials that were cheaper and better for building and operating a railroad. The GN would simply build a section of road, run spurs to areas occupied by productive farmers, merchants and others; develop profitable freight and passenger traffic along those spurs to feed its main line; then reinvest some of the profits to extend the main line further West. Eventually, the GN connected St. Paul to Seattle, and operated as the best built, lowest cost, most reliable and least corrupt transcontinental road.

Had the U.S. government not subsidized losing railroads beginning in the 19th century, the U.S. today would likely have superlative private rail. Ditto for its having subsidized the grossly inefficient Interstate Highway System and Federal Aviation Administration.

To end the corruption, waste, impoverishment, and legalized grand larceny which central planning spreads, the government and the economy should be completely separated. Then, like cheaper, faster, better computers, most people would enjoy cheaper, faster, better transportation.

The accepted answer makes the good point that there are socioeconomic externalities governments consider when they invest in an "unprofitable" mode of transport. However, this gives the impression of the state as some kind of guardian angel/incompetent bungler acting out of some kind of saintly intention against capitalism.

In fact, it's more appropriate to notice that the state is a capitalist actor like a company and with profit maximising incentives like a company. The difference is simply the wider opportunities through which a state can receive such profits.

A private rail company can only profit from the cash its customers are prepared to pay above the cost of its provision. However, thanks to the magic of competition (or regulation in the case of a rail monopoly) the market price of a service is usually lower than its actual utility to the consumer. The difference with a state is that its consumers are also its shareholders. When the customer wins (e.g. with a great job they can now commute to or just a nicer travel experience) the state is also winning. In economic terms the surplus consumer utility is an extra financial component that pushing the endeavour into the black on the balance sheet.

One might object that the marginal utility of train over car is already fully priced in by consumer choice. i.e. Yes, train is often better and faster than bus but only a certain amount better. Some will say we can know exactly how much better by looking at consumer choice. If tickets cost 40% more that means consumers feel it's exactly 40% better. So if that isn't enough to make rail profitable then bus must be the better choice for an efficient economy, and short-term focussed capitalism would do us a favour by eliminating it.

With a simple model supposing perfect rationality, information and capital in the hands of consumers this would be true. As it is, investment in infrastructure is more analogous to a large company with individual subdivisions (like citizens) who are rational to organise their work inefficiently with adhoc spreadsheets rather than buy expensive software their budget will not allow. However, the head office has the capital for a long term IT project which will help keep its subdivisions efficient over the long haul.

In summary, there are many train networks which are in the end financially profitable for the capitalist actor known as "the state" which wouldn't be for even quite large companies.

For train passengers, raise the price.

Of course, this will lead to substitution - like automobiles, etc. Customers will choose the quickest, most affordable method of transportation.

The "capitalist," therefore, will not be married to the idea of commuting via 19th century means, if it means costing him more money and consuming more of his time.

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    Road travel also has it's root in the 19th century, industry as a whole was invented in the 19th century, photography was invented in the 19th century, industrial use of electricity started in the 19thc century etc... I don't see the problem about something being invented in the 19th century and still being relevant today. Actually more things were invented in the 19th century than in the rest of history combined. – Bregalad Sep 27 at 6:38
  • Consumers can't choose the quickest and most affordable. They need to balance one against the other. The relationships between these factors become less linear when income is constrained. i.e. even a perfectly rational actor would need to consider not only the smartest price/time ratio but if the quicker option leaves them with $5 spare rather than $70 per month it's a massive difference in financial risk. This is where the price will be distorted away from true value and large actors without such constraints can fill the value gap. – Adamantish Oct 1 at 7:12

What is the capitalist answer to rail passenger transportation being non financially profitable?

There is a capitalist solution at work as we speak: SELF-DRIVING CARS

In addition to all the other answers out there, I will take a more futuristic (hypothetical) outlook.

No matter how you see it, trains are inflexible compared to cars. In a near future, when cars will have to be able to communicate with one another about their speed and other metadata (effectively forming a train on the highway), some traffic problems might be solved. This means that in a country like the U.S. with approximately 2 vehicles per household, the free market would choose the cheaper (time and cost) option.

I can speak from personal experience (U.S.) that it takes me 75 minutes to go "door-to-door" from where I live, to my work place, all using trains. The equivalent 'door-to-door' distance via roads and highways is 30 miles. In a future where I could be in the comfort of my own car, with all the privacy that comes with it, and with the time saving I would get from the car driving on average 40 mph, I would definitely pick driving. The cost now is almost the same (tolls + gas + parking) almost exactly as all the monthly train passes I need.

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    This is exactly what I decided when I worked in the DC Metro area. DC has a pretty good subway system, but I found that it took me twice as long to commute, it cost more (even factoring in the exorbitant parking fees), and I often had to sit next to a guy who wanted to tell me all about scientology. It did not take long for me to ditch the train and go back to driving. – Michael J. Sep 26 at 20:50
  • Self-driving cars would make rail passenger transport less, not more, profitable, your answer is contradictory. – gerrit Sep 27 at 9:40
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    @Bregalad while this hypothetical and predictive approach might be wrong, I think you should also consider time as a major factor in your argument. While pure energy and monetary cost might be higher, the time saved by passengers might be well worth the trouble – Dashi Sep 27 at 11:19
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    @Bregalad There are still inherent delays in public transport, e.g. having to stop frequently to let people on and off, passengers having to get to and from stations, and having to follow a fixed (and usually very fragile) schedule. I walk to work instead of taking the bus because, despite a higher top speed and taking the same route, on average, the bus takes longer. If there was a bus (or train or tram) every 5 minutes and it brought everyone right to their doorstep, it would be far less energy efficient because they'd have only one or two passengers at a time. – Ruther Rendommeleigh Sep 28 at 10:09
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    This actually sounds like the very best possible mean of transportation, mixing the privacy of cars with highest speed and safety of trains, hopefully that will happen instead of shitty self-driving cars mixing in traffic congestion with present-day inefficient and dangerous cars. – Bregalad Sep 28 at 13:44

I wonder whether it's not that capitalism can't find rail to be the optimum solution, but that it just hasn't done it yet?

As things currently stand, environmental issues and diminishing reserves of energy resources are a problem apparent to any long-term observer, but do not have any immediate effect.

That being the case, I would argue that the capitalist solution would be to maintain the status quo until such a point as energy resources are scarce (and therefore expensive) or environmental issues have become such a political issue that emissions / inefficiencies are heavily penalised. This could then create an environment where rail passenger transportation would become financially more viable (unless there was something even better).

  • That's exactly my thoughts, too ! – Bregalad Sep 30 at 17:53

In developed countries, rail transport is usually made at financial loss

I dispute the whole notion of the question, since capitalists in the US love the railroads.

In fact, the US carries much more stuff via rail than does the vaunted EU.

https://en.wikipedia.org/wiki/Rail_freight_transport#Statistics

In 2010, North America (an integrated rail system) moved 2.8 trillion ton-km of freight, while the EU only moved one seventh that amount.

Within the U.S. railroads carry 39.9% of freight by ton-mile, followed by trucks (33.4%), oil pipelines (14.3%), barges (12%) and air (0.3%).

Railways carried 17.1% of EU freight in terms of tonne-km,[29] compared to road transport (76.4%) and inland waterways (6.5%).

It's obvious that Europe loves roads and the US loves trains.

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    As a Swiss person I fully agree that EU's policies with truck transport (and lacks in freight rail transport) is a huge scandal. Switzerland has a major issue against the EU on that topic, but that's another problem and not part of my question. – Bregalad Sep 27 at 6:35
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    @RonJohn Trains are must faster than road transport, see my OP; also yes I can isolate passengers from freight. – Bregalad Sep 27 at 8:31
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    It's obvious that Europe loves roads and the US loves trains., that conclusion does not follow. European waterways are heavily used for freight transport. – gerrit Sep 27 at 9:34
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    @RonJohn You should definitely visit switzerland as it seems your vision of what trains can achieve is limited; train stations are dense enough not for everything but for most usages. When driving you are legally obliged to stop and switch drivers or make a pause every 2 hours. How often a train stops depends on the service offered, it's not an inherent limitation of rail transport. High speed with occasional stops is still better than average speed. – Bregalad Sep 27 at 13:27
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    @RonJohn I've visited the US several times, my wife used to live in Iowa, I've taken the train across the continent several times, it's a lovely way to travel. But trying to get from the Denver train station to Fort Collins is a frustrating endeavour indeed, despite a chain of closely connected reasonably centralised cities where passenger rail could work very well. That the train from Chicago to Omaha connects through small villages in southern Iowa rather than mid-sized cities in central Iowa is stupid. The buses from Iowa City to Chicago via the Quad Cities are popular, as would a train. – gerrit Sep 27 at 14:51

As background I am very much pro-rail. I don't own a car and my daily commute is on a rail line. I like rail very much, it is a premium mode of transportation.

That said, I have put a lot of thought into this and have to confront the following. Since the OP is focused on engineering efficiency, let's talk about manufacturing and the mechanical engineering that goes into the vehicles. I have a theory that the efficiency of car and truck manufacturing (and internal combustion engines) gained orders of magnitude on locomotive and rail car manufacturing at about WWII. Both railcar makers and auto makers built armored tanks for the US Army in WWII. Budd, Brill and American Car and Foundry simply were not as good at economies of scale as General Motors (at the end of the war, ACF was only the 36th biggest military contractor)

This leads to the marketplace today:

A new Siemens ACS-64 locomotive cost Amtrak $466 million for 70, at $6.6 million per unit. An unpowered coach car is between $500k and $1 million, and can seat about 120.

A Hyundai-Rotem Silverliner V EMU cost Septa (Philadelphia) $274 million for 120 cars, and RTD (Denver) $300 million for 66 cars, for unit costs of $2.2M-4.5M. These seat 91-107 passengers each.

A transit bus such as the largest supplier to US transit systems, "New Flyer" has an average new cost of $506.5K in 2017 and can seat about 60 passengers.

So at a back-of-envelope level the equipment for a 500 passenger train (whether locomotive plus 5 coach cars or 5 EMUs) will cost on the order of $8-15 million. The opportunity cost of $8 million is 16 transit buses with capacity for 960 passengers, so in round numbers nearly double the passenger capacity, and with the operational flexibility to run 16 routes (or 16 headways) instead of 1.

This ignores operating costs as part of the total cost of ownership (e.g. additional fuel and labor for so many buses on the pro-rail side, but also track maintenance of way and the notable manufacturing shakeout issues that e.g. Silverliner V and Acela had in their first decade on the anti-rail side). I would note that once the Chinese government brute-force R&D for battery powered buses enters the western market, or a self driving car service that will move a passenger 10 miles for $6, it could be over on the economics for commuter rail systems.

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    Your answer also does not seem to take into account the expected lifetime of rail cars or locomotives, which are much higher than for cars or buses. – gerrit Sep 28 at 7:54

Let's paraphrase a quote I heard a long time ago:

The problem with trains, like with any mode of mass transport, is they leave from a point you're not at and go to a destination you don't want to go.

Cars simply don't have this problem. A commuter can park his car in the direct vicinity of his house and in the direct vicinity of his job. A train simply doesn't have that option. So your question misses 2 important points:

  1. Distance travelled during each trip is often (much) longer than the distance of the train trip.
  2. Additional distance requires additional methods of transportation. Another train, bus, metro, bike or on foot, but most options have extra expenses and extra travel time just to wait for the next one.

In short, road travel isn't as bad economically as it looks. It's a whole lot more complicated.

What is the capitalist solution to make rail passenger transportation economically profitable again, like it used to be before road transport was a thing?

IMO there is no real capitalist solution to it. Multiple countries are considering and/or experimenting with tax benefits to make it more viable or different methods of road pricing to make road travel less viable.

  • A commuter can park his car in the direct vicinity of his house and in the direct vicinity of his job. And then either die of an earth attack due to lack of physical exercice, or spend time doing sport he could do naturally with 10 min walk from his home to the train station. That's terribly sad, but you're 100% right people are ready to use very sub-optimal solution just to avoid walking 20 min per day :( – Bregalad Oct 2 at 14:30
  • @Bregalad For some people, it's a lot more than 20 min per day. – Mast Oct 2 at 14:47
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    I'll give you my example. To get from my house to my work is a 45 minute drive in all but the heaviest traffic. If I were to use rail (plus other necessary transport forms) the journey is closer to two hours (15 minute walk to the station, 1 hour 10 train run, bus wait 15 minutes, bus journey 15 minutes, 5 minute walk from bus to work.) All of those are once per hour so there's no resiliency for lateness of services. Add to which the price of train fares has risen to the stage where the car is equally as economical – Wenlocke Oct 4 at 11:25
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    @Bregalad-Even if it is only 20 minutes extra per day. The problem is that the weather is not always nice. 20 minutes walking in the rain is miserable. Walking on icy sidewalks gives a high probability of slipping, falling and being injured. Reaching work after sweating from your 10-20 minute walk is going to make for one very smelly person. You keep saying cars are sub-optimal but nothing you've shown even remotely supports that claim in any place other than possibly a highly populated city. Speaking of which, it sucks making that 10-20 minute walk with both arms full of grocery bags. – Dunk Oct 4 at 17:28

Rail isn't necessarily unprofitable. Private rail lines can, have, and do exist.

Japan has a privately funded maglev rail line.

https://en.wikipedia.org/wiki/Ch%C5%AB%C5%8D_Shinkansen

JR Central announced in December 2007 that it planned to raise funds for the construction of the Chuo Shinkansen on its own, without government financing. Total cost, originally estimated at 5.1 trillion yen in 2007,[23] escalated to over 9 trillion yen by of 2011.[4] Nevertheless, the company has said it can make a pretax profit of around 70 billion yen in 2026, when the operating costs stabilize.[24]

https://en.wikipedia.org/wiki/Shinkansen

Development of the Shinkansen by the privatised regional JR companies has continued, with new train models developed, each generally with its own distinctive appearance. ... The privatized JRs eventually paid a total of ¥9.2 trillion to acquire JNR's Shinkansen network.[18] After privatization, the Shinkansen network continues to see significant expansion to less populated areas, but with far more flexibility to spin off unprofitable railways or cut costs than in JNR days.

The NYC Subway was private until the city instituted price controls and forced the companies to sell to the city (like Venezuela).

https://en.wikipedia.org/wiki/History_of_the_New_York_City_Subway#Independent_System

Mayor John F. Hylan was a strong advocate of public operation of the subway. ... he tried to push the two operators out of business. To that end, Hylan had denied allocating money for the BRT by refusing to build new lines, refusing to raise fares (thereby putting the BRT in more debt), denied building permits so that some major building work lasted longer than planned.

General Motors lobbied and bribed politicians to eliminate streetcars in favor of buses, built by General Motors of course. This reduced access and use of rail lines.

https://en.wikipedia.org/wiki/General_Motors_streetcar_conspiracy

The General Motors streetcar conspiracy refers to convictions of General Motors (GM) and other companies for monopolizing the sale of buses and supplies to National City Lines (NCL) and its subsidiaries, and to allegations that this was part of a deliberate plot to purchase and dismantle streetcar systems in many cities in the United States as an attempt to monopolize surface transportation.

To me, the solution is obvious. Eliminate government. Government is used, bribed, and controlled to eliminate competition, and interferes in natural prices and market demands. Without government, companies will have no one to lobby for subsidies or regulating their competitors, nor will they have to fear price controls and bureaucrat manipulation.

So the premise of the question is flawed. Rail can be financially profitable, when it doesn't have to contend with government interference.

  • Government is great and there clearly is a need for government. The problem is the people in government. If we could somehow get rid of people from government then the world would be a much better and efficient place. – Dunk Oct 4 at 15:31
  • @Dunk Cool a government genocide. Like a reverse genocide. Now that's a genocide I can get behind. – Chloe Oct 4 at 20:57

To make this kind of analysis for real you'd need to be able to:

  • Be able to compare all the economics cycle of the railway (not the passenger rail transport only) with the alternative road, I mean:
    • All the building costs
    • All the operating costs
    • All the diseconomies (pollution, environmental effects, accident effects...) they are not minor, i.e. in the UK, taking into account only fatal accidents we can talk about 3.3 Billion(US billion not former UK or spanish or italian billion) GBP/yearly according to this and this and car pollution costs 6 Billion GBP/Yearly according to this.
  • Isolate both cases in a pure public, public private or mixed scenario

But you can not do that because there is no chance of economic freedom on transportation, because:

  • You need licenses to operate railways
  • You need government allowances for railroad building
  • Alternative Roads are operated by governments
  • Alternative diseconomies are paid by governments

So basicly the only thing you can ask is: "is profitable a pure capitalistic railway passenger transportation against a monopolistic road transport held by governments or their licensees?" In this point I must agree it isn't unless it is subsidized or operated by governments and their licensees (indeed licensees are what we are taking now as private held)

Some argue that a faction of capitalists conspired to make rail transport appear less optimal than it was, (by means of graft and disinformation), to sell more oil and automobiles. If that is in fact true, the answer would be to reduce, eliminate, and correct that graft; and replace the disinformation with correct information; after which ordinary non-conspirational capitalism would then be better able to reward the most optimal solutions.

Rail is much less dependent on oil than any other modern means of transportation. (Ok this is very slowly changing now last 5 years with electric cars starting to be sold.) But all throughout the 1900s this was the case.

This is real reason why rail was scapegoated so much in America. Oil businesses quickly grew and gained huge amounts of power there.

  • This does not seem to address the question and it is a comment rather than an answer. – Alexei Oct 2 at 13:53
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    Also note that electric cars are dependent on batteries, especially Lithium which will be getting rare in the future. On the other hand electric trains does not require batteries. – Bregalad Oct 2 at 14:28

You have the cart and the horse confused.

If rail were the only way to get around, it would surely be profitable. In fact it would be a monopoly.

Someone gave a very good hint to why passenger rail does not work in the U.S. It is because, starting about 1950s, we built the interstate highway system which everyone with a car can use for free. The costs are paid for by the government, so users get to use it at far less than cost for their trip. It also killed freight rail, by the way (look up 'Conrail').

Cars and trucks use the interstate highways for free, so the cost of a trip is (loosely speaking) only the cost of gas. A railroad, on the other hand, must buy and maintain the property, track, signals, etc. And, to make matters worse, they pay property tax on the land they use (an anti-subsidy).

Economists call this an 'externality', because things outside the control of the actors is causing a distortion (free roads in this case). In free-market capitalist microeconomic theory this is one example of what is called a 'market failure'. Market failures are known departures of free markets away from the optimal solution. That is not a political claim; it is very orthodox free-market microeconomics.

The answer is that passenger rail needs a subsidy large enough to offset the subsidy driving implicitly has to make a profit and succeed.

By the way, there is one route in the U.S. where passenger rail makes a profit: it is Amtrak's Boston-New York-Washington service, Acela. It works because (1) it is high-speed track and the trains move fast; (2) as a result, it is quicker to go from downtown to downtown (where rail stations are) than to drive out to the airport, get there early enough, wait, fly, and then drive into the destination city; and (3) there are no weather delays, flight cancellations, etc. to contend with. And, given the speed of the trains, it is faster than driving - and you can work while on the train. So it is a viable route.

As I noted, freight rail also was pretty decimated. A freight train can operate with a crew of 2 (used to be 4) and move huge amounts of stuff. But, with free roads, you can hire hundreds of trucks and drivers to do the same job cheaper.

The answers would be (1) toll roads that cover their own cost; (2) a fuel tax that evens the playing field (one reason trains are more successful in Europe is high gas taxes); or,as you note, subsidies.

  • Roads are anything but free. Taxes explicitly intended for roads more than cover the cost paid by the government of building and maintaining the roads. Without the roads, most states would still be agrarian and very poor. if one were to look at society overall, the roads are what allows most people to live the middle-class life style. Nobody other than the railroad companies would be better off trying to make road travel more expensive. States would lose enormous amounts of tax revenue, which means they'll be looking for other things you like to tax. BTW, Freight Rail is thriving in the USA. – Dunk Oct 4 at 17:38
  • I disagree. If you look at most government budgets, the costs of roads exceed toll, gas tax, and other receipts. You are arguing that other income redounds to the government that makes roads worthwhile. But the fact is that the cost per mile for rail freight is much below the (total) cost for road freight, hence the growth of internodal. The U.S. used to be crisscrossed by long rail trunk lines and thousands of spurs, most of which are now gone...the track is ripped up and right of way never recoverable. Only boats are cheaper per ton-mile than rail. – eSurfsnake Oct 7 at 2:25
  • You must be a liberal who never bothers to look beyond the first layer. What studies who make the claim you are making say is that taxes are coming from 'general taxes'. However, what those studies always fail to mention is that those 'general taxes' have been increased to those levels on basis of claiming that the tax hike is needed to pay for roads (which means any taxes associated with those tax hikes are in fact explicitly intended to pay for roads). – Dunk Oct 9 at 17:06
  • I'm sorry you disagree, and don't see why that makes me a liberal, or why making an ad hominem blanket insult about liberals is helpful. European nations have expressly set higher gas taxes to more closely match up road costs and revenues. But, just because polticians say they are raising general taxes for "infrastructre" like roads doesn't mean it gets spent that way. (Private) toll roads would make more sense, and be akin to what railroads do. In fact, there is one in Denver and it is pretty pricey compared to other tol roads or gas taxes. – eSurfsnake Oct 9 at 19:33
  • I just checked the facts. Highway spending in the U.S. alone (not roads in total) was $168 billion last year. Federal gas taxes were about $35 billion, and state taxes boosted that to a number still under $100 billion. And this is the problem: because the difference comes from a general fund, the cost to a highway user is lower than it should be because people who live in Manhattan and don't drive but use public transit are having some of their tax dollars go into highways. Again, this provides no incentive for people to not use highways as much, no matter what a politician says. – eSurfsnake Oct 9 at 19:41

the answer would be like other said, to not worry about making it profitable and find an alternative.

if you're asking HOW to make it profitable, one would have to address the shortcomings in infrastructure or manpower or with money. none of which would leave a good taste in anyone's mouth unless they really believed in it becoming commonplace again.

when I lived in SE Asia they had a passenger line going from Bangkok to Butterworth MY. it was always packed because it was fast, convenient(ish), and safe. there were larger metro areas on both ends with local transportation available to go into the city. so that's the first thing you would have to do. provide local transport reliably at your stops. most people in the USA would want you to pay for that yourself.

Properly designed rail is actually quite profitable to run. The reasons why there isn't more rail around without government support, are:

  1. The initial cost of infrastructure is quite high. The rails themselves are quite expensive. Yes there's rebar in the cement under properly designed roads, but that's a much cheaper type of steel than is used in rails. Besides the rails, you have nearly all the problems of running a road over the same plot of land - drainage, washout, flooding, etc. etc.
  2. Operation can become expensive because of lawsuits if the rail isn't built in such a way to make public crossing difficult or impossible. If a car traveling on a highway can spot a suicidal ahead of time and hit the brakes to stop relatively quick, a train can take a VERY long time to stop. For this reason, rail that runs on ground level through towns and cities has a very low operating speed, which makes deliveries long, and clients tend not to favor this transport.

Not sure if this answers your question, but in my country we have all trains are Government owned.

They are crammed , smelly , very unkept and look like they haven't been updated since the 40s.

They remind me of sardines in a metal can because everyone is sharing a certain space. The toilets are non existent.

Our government is Socialist with a semi-Captialist economy. The state has declared that the train system must be controlled by the government because this means of travel is a need and wants to keep the prices down. The odd thing is that most would pay more if there was something decent to travel in.

A more captialistic approach would allow open business in this area and people would choose the most comfortable and viable means of transportation. Competition would enable to have trains get from one city to another in a matter of hours.

incentivise the train use to cut down on pollution and keep the benefits safety and you'll have something financially viable.

Different companies can have fast lanes and wifi on rides and such.

Ultimately, it would be like any transportation business. This can be applied to airlines too.

Firstly land (homes and offices) near to stations sells for more, therefore tax this increase in property value.

In the UK most "commuting" trains are empty after 9am, therefore give large discounts to people who travel as these times. But to get this to work the season ticket needs changing, as most people need to travel at peak times a few days of the week.

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    In the UK most "commuting" trains are empty after 9am, citation needed. I've frequently had to stand between Reading and London well after 9 am. Unless by empty you mean there exists at least 1 empty seat on the entire train. And in the north, the first Sunday morning service from Lancaster to Manchester is so crowded that people get left behind on the platform. The rail companies don't give large discounts to off-peak travel (which is priced like most countries), they rather charge highway robbery prices to on-peak travel (which is the most expensive in the world). – gerrit Sep 27 at 9:46
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    Everything you identify already happens in the UK. Properties are taxed on their value when they're bought (stamp duty land tax), and for commercial and rental property, when they're sold at a profit (capital gains tax). Off-peak travel is already priced differently compared to peak travel. – Steve Melnikoff Sep 27 at 10:39

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