Abstract

This paper examines the economic rationale behind the 1844 Railway Act in Britain. This was one of the first, if not the first, pieces of British parliamentary legislation in the modern era to propose nationalisation as a solution to market failure.In 1844 William Gladstone proposed and implemented what we would now call price and quantity regulation - an idea that still impacts today in Britain with this basic pattern of regulation not being abolished until the 1960 Transport Act. However, the stick of nationalisation was to hang over the railways for 21 years until 1865.