1977), was that Australia’s was a case of‘socialism without doctrine’. It was
pragmatism, not ideology, which led to state-financing, construction, and
operation of railways. Nonetheless, there were lasting consequences of the
choice of public over private ownership, some of them ideological.
It may well be that, due to convict origins and the exigencies of antipodean
life, the Australian colonists looked to government more keenly than else-
where in the empire. Regarding rail, however, Butlin remarked that‘except in
South Australia...opinion was originally strongly opposed to government
entry into railway building’, and concluded that‘the failure of private enter-
prise was, in a sense, accidental’(the‘accident’being the gold rushes, drawing
men andfinance away from the private railways), and so the government of
Victoria was forced into ownership‘somewhat against its will’(Butlin 1959,
pp. 39–40, 840; Coghlan 1918).^4
The colonial governments had no material superiority over private com-
panies, or vice versa, in access to technical know-how, to high-level engineer-
ing and management skills, or to construction labour. The technology of
constructing and operating railways was readily transferable, facilitated by
the rapid development of an integrated international market in railway engin-
eering skills and experienced personnel. The British engineers, so prominent
in the history of Australian railways, were but a small sample of those who
travelled the world planning, constructing, and operating major transport
infrastructure, rail in particular; and Britain supplied much of the world’s
rolling stock and, to a lesser extent, rails. In construction, private railway
companies would have employed day labour in Australia, just as did the
governments.^5 As to incentives for efficiency, whatever the theoretical advan-
tages of the profit motive over public service, they would have been attenu-
ated by the guarantees that the counterfactual private railway companies
would undoubtedly have been granted. What the colonial governments did
have, however, was superior access tofinance.
9.1.2The Significance of Loan Markets
The public sector’s advantage in the loan market was substantial initially and
increased over time. In 1858, the nascent colony of Victoriafloated on the
London market a remarkable public loan of £8 million. So successful did the
colonial governments become at loan raising that, over the next three
(^4) Shortly after the discovery of diamonds and the granting of responsible government, the Cape
Colony of South Africa nationalized the formerly private railways in the early 1870s, and embarked
on a huge expansion. 5
Chinese construction workers were employed in USA, but apparently not in Australia. In response
to the arrival of large numbers of Chinese on and around the goldfields, Victoria placed an arrival tax
on them in 1855, and so many landed in Robe in South Australia and walked to thefields.
Jonathan Pincus