Funny thing from history, western railroads in the US were a really interesting phenomenon of nonsense. Like, people are familiar with a few common tidbits, like them building long winding routes to pick up as much land as possible.
But more interesting is how they were marketed to investors. Eastern railroads were built between existing urban centers and hubs of commerce where there was already demand for transportation, western railroads were being built in to areas where that really wasn’t the case. The idea being that once they were done, demand would spontaneously appear because of their presence. This did happen to some extent, but often the demand that appeared was far smaller than expected and not high enough value to generate enough revenue to pay the debts the railroads had taken on during construction. So they were constantly going bankrupt and going out of service, meaning that the people who had moved there and created demand were suddenly cut off and left stranded.
Of course, the real money in western railroads was in the railroad construction companies who massively over charged the railroad companies and pocketed the difference, and of course they moved as slow as they could get away with. The people running the railroads of course had no issue with any of this, because they didn’t own the railroad companies, the investors did… but they did own the construction companies that they hired.
It was a huge scam built on the promise of a new technology and the fantasy of use cases just materializing once the capacity had been built. It caused several major economic depressions in the late 1800s.
Good thing society learned from this and never fell for that con ever again. I’m sure this has no barring to AI datacenters.
I’d really recommend the book “Railroaded: The Transcontinentals and the Making of Modern America” it’s a really fascinating to read about just how… absurd it all was.
Funny thing from history, western railroads in the US were a really interesting phenomenon of nonsense. Like, people are familiar with a few common tidbits, like them building long winding routes to pick up as much land as possible.
But more interesting is how they were marketed to investors. Eastern railroads were built between existing urban centers and hubs of commerce where there was already demand for transportation, western railroads were being built in to areas where that really wasn’t the case. The idea being that once they were done, demand would spontaneously appear because of their presence. This did happen to some extent, but often the demand that appeared was far smaller than expected and not high enough value to generate enough revenue to pay the debts the railroads had taken on during construction. So they were constantly going bankrupt and going out of service, meaning that the people who had moved there and created demand were suddenly cut off and left stranded.
Of course, the real money in western railroads was in the railroad construction companies who massively over charged the railroad companies and pocketed the difference, and of course they moved as slow as they could get away with. The people running the railroads of course had no issue with any of this, because they didn’t own the railroad companies, the investors did… but they did own the construction companies that they hired.
It was a huge scam built on the promise of a new technology and the fantasy of use cases just materializing once the capacity had been built. It caused several major economic depressions in the late 1800s.
Good thing society learned from this and never fell for that con ever again. I’m sure this has no barring to AI datacenters.
Awesome comment, thanks!
I’d really recommend the book “Railroaded: The Transcontinentals and the Making of Modern America” it’s a really fascinating to read about just how… absurd it all was.