In this article, I analyze and compare the contributions of Dupuit and Walras on the natural monopoly of railroads. Both theorists argued that railroads—as opposed to inland waterways—could not be vertically unbundled, a point that previous authors who compared their views failed to point out. Moreover, until now, Dupuit’s analysis of the railroad monopolies before the Société d’économie politique had been overlooked. This article fills this gap in the literature by showing that Dupuit and Walras both concluded that railroads were better managed under the monopoly regime; however, they drew upon different perspectives. I argue that Dupuit was more pragmatic, using the concept of a “de facto monopoly,” while Walras was more ideological, arguing that the railroad industry was a public utility. In so doing, I underline that Dupuit did not oppose government intervention, counter to a few misrepresentations and fallacies in the literature.

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