Railway.Com

The teaching of economic history is in decline in our schools and universities. Yet much can be learned from the ananlysis of historical economic events. In this paper, the author combines an analyis of the economic history of the nineteenth century railways and ICT booms with an explanation of the technological developments in order to draw parallels between the two communications revolutions. Study of the former revolution enables us to understand likely trends in the latter. Furthermore, a number of important policy implications can be drawn from the study of the economic history of both events. The paper shows how stock market bubbles do not necessarily lead to economic losses. The use of central planning for allocating capital in network development has simply led to technological networks being underprovided. The paper also considers the issues of technology 'lock in' and examines how markets, even in apparently unsophisticated economies, can solve complex resource allocation problems