The Public Be Damned

You still hear William Henry Vanderbilt's quote all the time today.  Generally, it is used to comment on situations where public companies dishonor themselves by fraudulently providing poor products and services.  Interestingly, doing a Google search on the term, I also see a lot of usage for it as applied to government as opposed to industry.

Anyway, it is ironic that the origins of the quote are very different than the current usage.  Vanderbilt's New York Central had just canceled an experimental high-speed high-service train from New York to Chicago.  A reporter asked him "Don't you run it (the train) for the public benefit?" and Vanderbilt very reasonably replied:

The public be damned.  I am working for my stockholders. If the public want the
train, why don't they pay for it?

In reality, Mr. Vanderbilt was eliminating a product that had proven unpopular in the marketplace.  His notion of fiduciary responsibility is not only appropriate, but in certain contexts can be argued to be legally required, at least today.  If some reporter today was stupid enough to ask the CEO of a failed dot-com this question (ie, why are you going out of business, why don't you just keep losing money for the public good) would we really criticize the CEO for giving the moron a smartass answer?  Accepting that Mr. Vanderbilt's answer was wrong is to accept that Mr. Vanderbilt should be a slave to public opinion, not as expressed by individuals in their purchasing decisions, but as expressed by an ill-defined elite who seemed to support the service for its aesthetic value.  And by the way, how had a service that didn't even exist a decade earlier, and only existed through the creativity of the NY Central, suddenly become an essential public service and expectation?

By the 20th Century, the high speed Chicago to New York express train  was bread and butter to the NY Central and its arch-rival the Pennsylvania.  In the end, cutting this service turned out to be just a temporary suspension of a product ahead of its time.


  1. Duane Gran:

    It is much easier to damn the public than to empathize with it. People purchase homes and make non-trivial decisions based on transportation, but when they raise their concerns I suppose they should just be damned, right? The tone of this essay, and many others here, imply that the public good is a design for evil intentions, but there is in fact a compelling public interest in transportation. This doesn't mean that businesses are held hostage to whim, but it does mean that we should use eminent domain to build railroads and that taxes should be used to support some rail lines that the marketplace won't address.

  2. lrC:

    IOW, your convenience should be served and you insulated from your own poor judgement at my expense?

  3. DaveJ:

    "it does mean that we should use eminent domain to build railroads and that taxes should be used to support some rail lines that the marketplace won't address."

    Why? Or perhaps more to the point, which ones specificly?

    You are trying to justify taking money from a group of people, to provide a service, that the users of the service are unwilling or unable to pay the operating costs for.

    If you personally, and a few of your friends, get a warm fuzzy feeling about Amtrak or BART running, even at a loss, why should I be forced to pony up for some peoples' cheap ride and your warm fuzzies? If they can't pay for it, and you won't support it voluntarily, why should it exist on my back?

  4. Duane Gran:

    "If they can't pay for it, and you won't support it voluntarily, why should it exist on my back?"

    Because there is an easily demonstrated public interest in supporting multiple modes of transportation. Let's turn this one around for a moment and suppose that we let these wasteful rail lines shut down. What are the consequences? Namely, more cars on the road (which encapsulates a variety of negative effects) and pushing the cost onto the segment of society that can least afford private transportation. At this point Libertarians often queue up to explain that this isn't their problem, but it really isn't that expensive to keep rail lines functional but it is terribly expensive to let them shut down.

    The odd thing is that I don't hear Libertarian arguments for letting roads deteriorate. Why does rail transportation deserve such special status?

  5. DaveJ:

    If it's easy to demonstrate a public interest when the public has demonstrated no interest, then I invite you to do so.

    The money wasted on rail transport could easily improve surface transport and alleviate most of the problems you alluded to without mentioning.

    You cite 'pushing the cost (of what?) onto (the poor)', but how is this any worse than land use restrictions that require people to live far from their jobs? In fact, given most ridership levels, it might be cheaper to give out taxi vouchers than to build trains. Again, if YOU feel so strongly about the issue, spend YOUR OWN money, not mine. What's wrong with that?

    Love your straw man about letting roads deteriorate. Simple answer. The roads are being used, the rail lines are a wasteful boondoggle. Where should the money be spent? I vote for where it's being used.