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What Happened to Railroads?
Source: Council for Economic Education (EconEdLink) | Type: Lesson
Between the Civil War and World War II, railroads were one of the nation's most important businesses and an integral part of people’s lives. In this lesson, students assume the role of detectives investigating why the rail companies experienced a crisis in the 1960s and what helped the freight transport portion of the business return to profitability later in the same century. Students analyze a set of clues that help them explore the impact of government policies and changes in consumer demand on rail service. They discover that government policies (e.g., regulations, subsidies, and taxes) can have both positive and negative consequences in the marketplace. An interactive activity helps students understand that rail service competes in two different markets—passenger service and hauling freight. Students also learn that railroads and government policies have had to adjust as the transportation industry changed in the second half of the twentieth century.
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- Determinants of Demand
- Determinants of Supply
- Maintaining Competition
- Natural Monopoly
- Non-price Determinants
- Role of Government
- Economics 9: Role of Competition
- Economics 14: Profit and the Entrepreneur
- Economics 16: Role of Government
- Economics 17: Using Cost/Benefit Analysis to Evaluate Govern
This is a comprehensive lesson on the general demise of the railroad industry in America. It is an extremely rich lesson that I used with my econ students, but would also be appropriate for a U.S. History class. It includes two interactive activities that nicely break up the research component of the lesson.
This lesson will require the students to do some web-based searching to help them with the clues that are provided as to the state of the railroad industry. A worksheet is provided to help them record the information they find.
For some teachers, it might be a bit heavy on history, tracing railroad regulation back to 1887. Next time I do this lesson, I will probably streamline some of this material. Also, there is no mention of the role of labor unions, particularly after WWII, in making railroad operations more challenging.
Overall, however, this is a great lesson. It drives home the important concepts of consumer tastes, the impact of technology, and the role of government policy in shaping market competition. The students walked away from this lesson clearly understanding that government policies can be both good and bad. Plus, everyone loves trains!
Given the fact that 25% of all employed Americans at the turn of the 1900's worked for the railroad industry, it will be interesting to see if students today can wrap their head around the concept of something THAT big.
This fascinating, self-paced lesson can work in Geography, World History, US History, Economics and Current Events classes. There is enough work there for students to work as individuals or in groups, both in computer labs (or working from home computer).
It is my suggestion that a class Blog or a class Wiki be set-up so that each can learn from the other as they explore this once famous "institution": the Railroad company. Like Coca-Cola, it was ubiquitous, and a change in the industry meant a change for middle America. These points need to be driven home and the self-paced lessons are just the ticket for students to engage in learning, rather than distasteful "earning".
Again, take advantage of student's skill in art, drawing, layout/design, newspaper re-creation, technology-understanding, and economic concept "consumption" by allowing students to "go off the reservation" with their learning inquiries.