EconomicsNotes

    The railways were nationalised in 1948, in a state of collapse. They were then built up as an integrated system until the 1960s, when the Beeching reforms attempted to transform them into an intercity service, and a freight service (aided by the questionable and possibly corrupt expansion of the motorways by a motorway construction executive who was also Minister of Transport, Ernest Marples, between 1959 and 1964.) This involved closing lots of small lines and network points. The service did prosper, and invested in advanced passenger trains, but was starved of funds by government during the stagflationary episode of 1973-1983. It was then privatised in 1992. A nationalised or integrated railway has positive externalities in terms of geographical mobility, though these have only recently become apparent. In the 1980s, consumers were still discovering the car, which became a more flexible and personal substitute, especially as the expansion of finance allowed more people...

  National debt refers to all the debt owed by government bodies of any sort within a country. It is owed to the holders of Treasury bonds. These bonds are issued with a return which represents the rate of interest on the bond, and if they are in demand, the interest rate falls; if they are not wanted, because of inflation, a threat of non-payment or from exogenous forces, an existing high level of debt, or a distrust of the government which issues them, the interest rate can be expected to rise. Most government bonds in developed countries have been a safe investment for financial institutions in the twenty-first century. For some economists, this means that high levels of borrowing by governments could divert funds that could otherwise have gone to investment or lending in the private sector, raising costs and interest for business and placing pressure on productivity. This process was called ‘crowding out’ in the past, though the term has fallen away a little. Borrowing is n...