ABSTRACT
For new economic historians the influence of railways upon the long-term growth of any economy can only be properly assessed by measuring reductions in the cost of sending freight by rail compared to alternative forms of transport. To help new economic historians evaluate the particular contribution made by railways to economic progress in the nineteenth century, new economic historians make use of three constructs: counterfactuals, social savings and the social rate of return on investment. Gross national product which is the aggregate measure of output produced by a country over one year seems an obvious denominator for estimates of social savings. In other words, once social savings are considered in a dynamic context of long-term growth, the focus of attention shifts logically to the compensation required for the loss of output imposed on a country by a shut-down of its railways over one year.
