Railroads and American Economic Growth
Social savings both was introduced and applied to the railroads in a seminal book by economic historian and scientist Robert Fogel. The social savings analysis involved using quantitative methods to imagine what the U.S. economy would have been like in 1890 if there were no railroads. In the absence of railroads, freight transportation by rivers and canals would have been only moderately more expensive along most common routes. America’s canal waterway system might have been expanded and its roads might have been improved as the next best alternative; both of these improvements would reduce the social impact of the railroad. Fogel concluded that the difference in cost (or "social savings") attributable to railroads was negligible - about 2.7% of GNP. This counterfactual history view was vastly different from views proffered by railroad historians and made a controversial name for cliometrics.
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“Our inventions are wont to be pretty toys, which distract our attention from serious things. They are but improved means to an unimproved end, an end which it was already but too easy to arrive at; as railroads lead to Boston or New York.”
—Henry David Thoreau (1817–1862)
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—John Steinbeck (1902–1968)
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—Samuel Taylor Coleridge (1772–1834)