[TheDong]

What is the mechanism that causes nationalized rail to inherently be more expensive?

I can see the argument for nationalized being cheaper due to not being for-profit, due to having larger negotiation power (via the government), etc.

What's the argument for nationalizing it increasing cost? Is it just "look at all these anecdotes?" or is there some fundamental economic reason.

[bobthepanda]

Freight rail is perfectly fine spending minimum amounts of money on clapped out tracks that twist and curve. Freight rail is never going to compete with air freight on speed, and is also much faster than boats, so speed is not really a priority.

Competitive passenger rail is high speed. High speed requires double tracks (to avoid slowing down to let trains pass), straighter rights of way to go faster (increasing land acquisition cost), and very high maintenance levels for safety and comfort reasons. Hosting is freight trains on high speed rail tracks also significantly increases their already high maintenance costs because they are so much heavier and cause more wear and tear.

Nationalization, I think, is less the driving fundamental here than the inherent conflict between timely, regular passenger services and the American freight rail system for bulk freight. The only time the freight railroads really prioritized passenger services was when they delivered mail on those trains, which is also lightweight and needs fast delivery, but that has long moved to air freight.

[ghaff]

>but that has long moved to air freight

Well, not even air freight. How much extremely time-sensitive information is actually transported physically these days?

I have a few things like my tax return but most of what I deal with these days is sent electronically if it's really urgent.

[bobthepanda]

Mail services also included small parcels, and if anything those continue to need ever faster logistics.

When we talk about air vs rail we are talking about hours and days vs. days and weeks.

[ghaff]

Fair enough. The transfer of information has moved online to a significant degree. But the transfer of small/light physical stuff has definitely moved into shorter latency territory.

[throwaway0a5e]

> What is the mechanism that causes nationalized rail to inherently be more expensive?

Hold that question for the next time the MTA gets caught spending stupid amounts of money to get nothing done.

The exact people you are agreeing with now will be happy to provide you a laundry list of ways government dysfunctionalality wastes money and gets taxpayers and riders less for their dollar if you ask in that context.

[mlindner]

> What is the mechanism that causes nationalized rail to inherently be more expensive?

A management that is not incentivized to reduce costs, or a the very least, following the operating policies set by politicians coming first before reducing costs. (It's hard to reduce costs when how you operate is decided by politicians.) The same problem that plagues government run systems all over the world.

A great post on just a few of the silly policies is here: https://news.ycombinator.com/item?id=30978263

[TheDong]

> A management that is not incentivized to reduce costs

This argument doesn't seem to me as if it's fundamental.

Politicians are at least in theory incentivized to reduce costs since citizens would rather not pay more taxes, and in theory a politician who enacts wasteful policies would not be elected.

On the flip side, companies are only incentivized to reduce the cost charged to consumers (or in this case, companies shipping freight) in the face of competition, and long-haul freight has a massive up-front investment cost of building out rails, so there won't ever really be that many choices. This is akin to the highway robbery ISPs can still charge, even though they are private companies and the moat of laying fiber isn't nearly as extreme as that of laying rail

> following the operating policies set by politicians coming first before reducing costs

Won't it be equally true that private and public corporations will have to follow laws? That seems identical.

> A great post on just a few of the silly policies is here: https://news.ycombinator.com/item?id=30978263

I'm trying to ask if there's a fundamental reason here, not a bag of anecdotes, and we were also talking about freight, not commuter trains, so that comment isn't particularly relevant to the comment tree you started about freight specifically.

[mlindner]

> Politicians are at least in theory incentivized to reduce costs since citizens would rather not pay more taxes, and in theory a politician who enacts wasteful policies would not be elected.

Politicians are incentivized to give lip service to reducing cost, not actually reduce costs. They only need to look like they're more likely to reduce costs than their opponent, assuming the voter actually cares enough in the first place. Further, it assumes that politicians even know how to reduce costs when they have no experience what-so-ever in running a train company.