GOVERNMENTS AND INFRASTRUCTURE

INDUSTRIES :INTERNATIONAL DIFFERENCES c1830-1990:

IDEOLOGY OR GEO-POLITICS?

Bob MillwardUniversity of Manchester

• 1) Introduction • Covers energy, telecoms, transport for

Western Europe with some references to Japan/USA.

• The main thrust is to explore how far strategic factors are more important than ideologies about capitalism and socialism in explaining economic organisation.

• The historiography on this is fairly limited: individual countries (Austria-Hungary etc); Bogart, Wallsten, Baily studies, economic nationalism; Gazprom.

• 2) Framework of Analysis • i) Ideological differences • ii) Geo-politics • iii) Political structure• iv) Perceptions of national identity. • Change: Important to recognise that form and

relevance of the above factors will change over time, in particular as a result of changes in technology (new forms of transport, IT in telecoms industry etc.) and economic forces (rise in size of public sector 1950-70)

• 3) The 19th Century • a) New nation states increase strategic role of infrastructure

industries, especially transport and telecom. • b) Electric telegraph seen as insecure; all in state departments • c) Strong initial state activity in rail development in Belgium,

Italy, Prussia, Belgium, Sweden, Norway, Prussia • d) Japan’s strategic needs lead to heavy support for shipping

and firm control over railways • e) US no hostile neighbours and regulation focuses on inter-

state trade • e) In sum state operates, rather than subsidises, for speed in

construction, unprofitable lines, direct control.

• 4) Early 20th Century • a) Britain & Ireland strategic decisions • b) Airlines emerge as national flag carriers • c) Common structural and universal service problems in

infrastructure but arm’s length regulation not a favoured policy after depression years

• d) Influence of ideology seems important (especially in coal) in Britain and France in 1940s but even here both concentrate on ‘basic industries’ not ‘means of production’.

• Net result is by 1950, railways, electricity, coal, gas, airlines and telecommunications were fully or partly government owned everywhere in Western Europe.

• 5) Privatisation • a) Strategic issues were important for airlines and telecoms in

the mid 20th century but technological and political changes undermine monopoly structure and strategic role.

• b) State enterprise financial losses an important element in privatisation as also disappearance of worries about arms’length regulation but common to all.

• c) Questions about security and about social and political unification still important but a wider range of instruments available

• d) Privatisation more partial and less extensive in natural monopoly sectors where strategic concerns remain.

• e) Cont. European governments still linked more closely (than SA and UK) to infrastructure industries, mainly via shares, including golden ones.

• 6) Conclusions• a) Strategic issues seem to account for much of the

differences in the business/state interface in the 19th century

• b) Similar issues for airlines and telecoms in mid 20th

• c) Performance studies need to focus on government objectives

• d) Focus for strategic issues by late 20th moved away from traditional instruments and regulatory problems of the sectors more dominant

• e) Cont. gov.s still differ from UK/US in strategic shareholding.