YOU NEED MONEY TO MAKE MONEY^265state; even the canals and railways were financed by private investment.
Across the Channel in France, manufacturing enterprise got no further
direct assistance after 1830; as for railways, a dirifty bourgeois regime—
symbolized by a portly Louis-Philippe and his prudent black um
brella—resisted calls for help from promoters and banks. The days of
direction and sponsorship were past. The French state sought private
enterprise to build the railroads and refused to purchase shares. On the
other hand, it agreed to pay for the land and roadbed (including tun
nels and bridges), justifying this substantial aid—about 18 percent of
total cost as of early 1848—on the ground that the road was going to
come back to the state anyway at the end of the concession period. All
in all, and counting a few state loans, the French government paid
slighdy over 25 percent of the cost of railway lines to that date.
In the Germanies, political fragmentation made for a variety of poli
cies. Some regimes continued to subsidize industry, pardy because of
its technological or strategic interest, pardy in the cause of social order;
while railway financing varied from purely private to state purchase of
shares, to public construction, ownership, and operation. In the United
States, too, home rule meant that policy varied from one state to an
other. Insofar as the individual states wanted to encourage public
works, subsidy was the rule, often in the form of land grants along the
railroad right of way. In Russia, the state assisted banking and indus
try, and the railroads were state-built, owned, and operated. Com
merce and topography be damned. The emblematic example: the
construction of the first important line, from Moscow to St. Peters
burg. The tsar was asked to select the route. He took a ruler and drew
a straight line between the two cities. But the tip of one finger stuck
out, so the line was built with one curved section.
Direct subsidies and aids are only part of the story. The state's hand
lay everywhere, even where not directiy manifest. Even in Britain, gov
ernment supported and protected overseas trade: the country as a
whole paid the associated security costs of private venturers and ad
venturers in distant seas. Such indirect subsidy, easy to overlook, was
crucial.
In Britain again, as elsewhere, industrial promotion also took the
form of defense against outside competition. The later record of British
commitment to free trade (more or less mid-nineteenth century to
1930) has tended to obscure the earlier and much longer practice of
economic nationalism, whether by tariff protection or discriminatory
shipping rules (navigation acts). Economic theorists have argued
forcibly, even passionately, that such interferences with the market hurt