Enterprise and Society Advance Access originally published online on February 8, 2009
Enterprise and Society 2009 10(3):449-497; doi:10.1093/es/khp001
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Divergent Paths, United States and France: Capital Markets, the State, and Differentiation in Transportation Systems, 1840–1940
JIM COHEN is Associate Professor in the Department of Public Management at John Jay College of Criminal Justice, The City University of New York (CUNY)
Contact information: jsac{at}netstep.net.
Why do the United States and France, both capitalist economies that were dominated by private railways in the 19th and early 20th centuries, have very different transport systems today? After World War II France developed 200 mph high speed trains, while railways in the United States declined to near irrelevance. This paper argues that cross-national divergence was caused by private and public actions that structured capital markets and controlled planning. In the United States private financial institutions used capital markets to shape rail development. In France, by way of contrast, the state directly intervened in financial markets and controlled planning. Both systems thrived until World War I. But, then, faced with growing competition from cars, buses and trucks and burdened by excessive debt, they declined towards bankruptcy. The Great Depression became a defining moment as a Socialist-dominated government in France nationalized railways while in the United States, President Roosevelt's New Deal failed to enact policies to ensure the competitive viability of rail in relation to motorized transport. Rarely used archival sources provide much of the evidence for this argument.
He is a Board Member of CUNY's Institute for Transportation Systems and Institute for Urban Systems and affiliated with the Region 2 Transportation Research Center. He serves on the Editorial Board of the Journal of Urban Technology. His previous research on financing urban mass transit appears in book chapters and journals, including Urban Affairs Quarterly and Social Science History.
I am grateful for assistance provided by André Straus, Laure Quennouelle-Corre and Professor Francois Caron in locating documents on French financial history as well as to archivists and staff at the following French archives: Roger Nougaret, Crédit Lyonnais (now Crédit Agricole); the Archive Nationale in Roubaix and Paris; the archive of the Société Nationale des Chemins de Fer in Le Mans; the archives of Société Genérale Banque in Paris and Banque Paribas in Paris and Orléans; the archive of the Fedération Francais des Sociétés d'Assurances in Paris. Uluhan Basaga, 2009 candidate for PhD in economics at the Graduate Center of CUNY, provided research assistance on this paper and was particularly helpful in formatting the tables. Stephen Rosenheck, PhD, Columbia University, provided invaluable assistance refining my arguments, as did Mary Gibson, Professor of History at John Jay College and The Graduate Center of CUNY. Support for this research was provided by the John Jay College Research Assistance Fund and by two Professional Staff Congress-CUNY Research Awards.