The Underground Economies and the Cost of Regulation

Abstract

One way to get the trains to run on time is to straighten the tracks. Another is to use more powerful locomotives. A less costly way — indeed, the cheapest way — is to lengthen the time allowed for the journey. In the 1920s the trip from Chicago to New York on the Twentieth Century Limited took 15 hours; passengers got rebates if the train was late, with the amount of the rebate scaled to the length of the delay. The same journey on Amtrak now takes 19–20 hours on the Broadway Limited — and there are no rebates if the train is late. The mileage between Chicago and New York is a constant, more or less. If the trains can’t adjust to the timetables, then the timetables adjust to the trains. Mussolini’s claim to fame was that he got the trains to run on time; but mostly he lengthened the timetables.