How important railways were to the late Victorian economy may be judged by the closeness with which their operations, rates and fares were hedged around with restrictions by the state, in an economy otherwise favourable to unrestricted private enterprise (Clapham 1963, Parris 1965, Cain 1972, 1980). Customers often felt they had no alternative transport facilities to those of an industry which was largely a natural monopoly.

Whether or not the industry really was ‘essential’ in nineteenth-century US economic development became the issue on which the present generation of econometric history, cliometrics, or even quantitative economic history, began (O'Brien 1977, McCloskey 1987, pp. 64–70). The problem came to be formulated as, how much lower would national income have been in a hypothetical nineteenth-century economy without railways (Fogel 1964, 1979, Fishlow 1965, Hawke 1970)? With occasional exceptions (Church 1975) economic historians in Britain have resisted the findings of this ‘social savings’ research programme initiated by Fogel, asserting but not explaining, that the wider ramifications of railways for economic development defy quantification (O'Brien 1983, p. 14, Gourvish 1980, p. 40, Mathias 1983, p. 245). Moreover Gourvish (1980, 1988) has tried to show that Hawke's estimate for England and Wales in 1865 is, in any case, not robust, principally because of the arbitrariness of the value to be placed upon the speed and comfort of passenger rail travel relative to coaching.

No less important a formulation of the economic impact of railways is, how much higher would national income have been if the performance of the railway system had been better. This question has been less studied despite longstanding criticisms of late Victorian British railway operations (Aldcroft 1968, Irving 1978, Foreman-Peck 1987).