While politicians frequently and incorrectly demagogue trade as harmful, the enterprising in the proverbial arena have long been looking for ways to bring people closer together not just so that they can exchange goods and services, but also so that they can divide up work that enables the production of exponentially more in the way of goods and services. Railroads have loomed large in this positive commercial evolution.
The explosion of railways in the 19th century didn’t just expand markets for producers eager to reach more people with their products. Of arguably greater importance, by shrinking the distance between humans and machines railroads enabled monumental surges in productivity borne of specialized humans and machines working together in ever greater numbers to produce exponentially more goods and services at lower and lower prices. In many ways, the early railroads could be described as assembly lines on wheels.
The old and new of railroads rates serious thought as the Department of Government Efficiency (DOGE) gets to work. Most are thinking about the latter and the potential spending reductions that will theoretically reveal themselves, but the bigger leaps will likely reveal themselves through a shrinkage of the rules and regulations that, in restraining discovery of the commercial future, ultimately restrain the division of labor between man and machine that’s driven so much progress for so long. Hopefully some of the regulatory barriers to railroad evolution will get a fair hearing as regulatory analysis takes flight.
Consider Parallel Systems, a corporation that has developed autonomous rail cars. The idea behind them is to enhance railroad companies and their rail infrastructure with the rapid movement of freight from ports to locations where the freight is needed around the country. Will the autonomous rail cars prove a winner, along with the buildout of rail links on which the freight will travel? The answer is unclear, which is the point.
Businesses of all stripes are in a constant mode of discovery. We only know what we need after the fact.
For now, what we do know is that U.S. highways and freeways are increasingly clogged with trucks moving growing amounts of freight around the country. What’s important about the frenzied shipping is that it’s not about to decline. Economic growth is just another way of describing productivity, and as productivity soars now and in the future, so will the movement of rising amounts of goods and services in the U.S. and around the world.
Railroad companies and innovative entrants like Parallel Systems represent a market response to freight that’s set to soar, and that has the potential to overwhelm existing modes of shipment. All good? Not so fast. Railroad labor unions are presently resisting autonomous rail cars, and their resistance plainly doesn’t require explanation.
Beyond that, regulatory barriers continue to restrain the arrival of Parallel Systems’ cars themselves. Their “safety” remains one of the holdups, which is hard to take seriously in light of the relative safety for truckers and drivers alike on U.S. freeways.
It’s just a reminder that the barriers to Parallel Systems have little to do with actual safety, and much to do with regulatory capture. Which brings us back to DOGE.
The aim is government efficiency, but the latter surely includes government regulations that are a barrier to efficiency in the private sector. So while there are a myriad of regulations that demand examination at a time when all aspects of the federal government are set to be examined, the regulatory barriers holding back the basic movement of market goods and imports demands a discerning DOGE eye.
