By 1950, the trunk networks in railways, telegraph and telephone were owned and operated throughout western Europe by state monopoly enterprises, which, in some countries, also operated the secondary lines. Much of their economic environment was determined not by arm's- length regulation of fares, rates and supply conditions, but by policies established with their supervising ministries (of transport, communications etc.) and ultimately determined by parliaments. How these policies affected profitability and productivity is evaluated in chapter 14. Here I am more concerned with examining how technological change affected the institutional setting. In the case of telecommunications, it was the advent of microprocessors and the development of information technology that transformed a simple industry (telephone at the end of a network) into one with complex facilities for transmitting information via computers, mobiles, fax, videotex and email. This was to come in the last quarter of the century.

Before that came the revolutions in road and air transport. Airline business was small beer in the late 1940s, but by the 1970s had become a major industry, especially on the passenger side. The wide-bodied, large-capacity aircraft that emerged in the late 1950s had, eventually, a big effect on shipping in Europe and some effect on railways, though nothing like the impact on rail in the USA. The competition from road transport had started in the inter-war period and, especially on the passenger side, developed fiercely after 1950 as cheaper and more reliable vehicles entered the market.