Anarchy in the Skies
The thought of abolishing all government regulation of the aviation sector and handing this task over to the free market is, to most people, as unthinkable and alien an idea as that of privatizing all police and courts. The general perception is that air travel requires central and international control and regulation by governments in order to prevent total anarchy in the skies (in the derogatory sense). But are governments really needed to accomplish this task, asks Marcus Bergstrom, or can it and should it be handled entirely by the free market? FULL ARTICLE
Comments (50)
I think Bergstrom is right. A private system would be safer and much more efficient. In addition, I think air travel would be more expensive as government subsidies were removed and travel by train would become more competitive.
Published: May 12, 2008 9:07 AM
Fine article...
for anyone interested in an example of successful airline deregulation by a government look no further than the situation in Ireland. The deregulation led to the creation of Europe's most ruthless and cheapest airline --Ryanair the cheapest, most efficient, greenest (!) and safest airline. However in Ireland the government monopoly over airports still remain just like in the rest of the world and are a testament to governmental inefficiency everywhere.
Published: May 12, 2008 9:07 AM
Yes, fine article indeed. While all this makes perfect sense to me, for many others it just doesn't. Socialism has been ingrained into too many people's minds and there is just basic distrust in Capitalism everywhere.
The general argument seems to be: "Greedy capitalists will just do it to make more money and people's interests would be sacrificed. Hence we need a powerful force like government regulators who will make sure each airline cares about its customers.."
How does one goes about changing this attitude that people seem to have?
Bryan.
Published: May 12, 2008 9:38 AM
I think it takes a great deal of patience, Bryan. You're right...most people believe that profit = bad. They're more concerned about motivation than about actual outcomes. For instance, many people poo-pooed the relief efforts of Wal-Mart post-Katrina because Wal-Mart "only did it to improve their image." The fact that the relief was more effective, less costly, and arrived more quickly than what FEMA was able to provide means naught, since they were simply motivated by profit.
I illustrated this while shopping with a friend a couple months ago. We were unloading some heavy, unwieldy items from a flatbed cart when a complete stranger stopped and asked us if we would like some help in exchange for the use of the cart after we were done. We, of course, accepted his help. Afterwards I turned to my (primarily socialist) friend and asked, "shouldn't we have refused his help since he only offered it in exchange for something he wanted?"
To which she responded, "No, that would be silly. We would have had to lift all that stuff ourselves." She got the point.
I think another difficulty we will have convincing people of the efficacy of this model is the typical bias against insurance companies in general. The prevailing viewpoint is that insurance is a scam, and that insurance companies work against their clients at every turn. Of course, we have government to thank for however much of this may be true, but persuading others to trust insurance companies over government is a tall hurdle.
Published: May 12, 2008 9:52 AM
Good article, with some really good points. It has an Achilles heel, however. It does not address the issue where the fix to a problem is more expensive than the cost of a few hundred or thousand lives. This is where the majority of people get uneasy with handing things over to the private sector. I'm curious what response to that concern others have?
Published: May 12, 2008 10:49 AM
Diderich: "It does not address the issue where the fix to a problem is more expensive than the cost of a few hundred or thousand lives."
It absolutely addresses that issue. If such a fix was necessary to prevent a few hundred or thousand deaths the insurance premiums for an airline that refused to fix the problem would increase accordingly, or the insurer may discontinue coverage for the airline entirely. This is, after all, the whole reason for the insurance in the first place...to ensure the safety of passengers.
Even so, I'm not sure how this scenario could ever exist. It assumes that the airline places no value on peoples' lives, but this cannot be true. Even if the people running an airline could care less whether people live or die, they must surely be concerned with the impact a few hundred or thousand lives would have on their bottom line. The safety record of an airline absolutely has an effect on its business, as fewer people will fly on an airline that is known to kill its passengers.
Published: May 12, 2008 11:05 AM
How does one goes about changing this attitude that people seem to have?
Control the schools.
Or, more to the point, wrest control of the schools away from self-interested Statists who control them now. (And use your money to pay for their daily socialist propaganda.)
Published: May 12, 2008 11:11 AM
Let's say I am a very wealthy person who ownes several small planes and a small airport outside of a large urban area. I pay whatever "fees" are required of me from whomever to operate my airport and fly my planes. I do not care who uses my airport or what cargo is brought in as long as I get a substantial cut from those using the airport. I don't care whether the plane owners have insurance or not, because they land at my airport at their own risk. I will not allow airplanes to leave my airport unless I have received my due.
Further, let's say that I have a reputation for allowing any and all sorts of cargo, from women who are to be sold into slavery, to drugs of any kind.
How will commercial insurance effect my business?
Published: May 12, 2008 11:52 AM
Why will anyone opt for your business over a firm that can secure insurance, exactly?
Published: May 12, 2008 12:13 PM
It seems to me that would depend on the cargo.
Published: May 12, 2008 12:30 PM
Jeffrey L. Crabtree: "How will commercial insurance [a]ffect my business?"
IMO, your business should be allowed to operate exactly as described, commercial insurance notwithstanding. You are asking, however, what would prevent illegal or immoral activities were it not for government regulation, right?
No one here has suggested that there should be no rule of law. Those who are selling women into slavery should, of course, be held accountable for their crime of violating the womens' right to self-ownership, but that is an issue for which government regulation of air travel or cargo is a poor solution. Rather, individual rights should be defended as such. It is only government's ineptitude at doing so that requires cargo to be regulated every step of the way.
Commercial insurance would probably have no bearing on your business, nor should it, as in your model the risk is assumed by the operators of the aircraft. I should imagine you will do quite well as safe haven for those who engage in illegal activities that are otherwise not immoral (shipping drugs, for instance).
Published: May 12, 2008 12:33 PM
...right, and what exactly is your objection meant to show then? That some people can choose not to use insured airlines? So?
Published: May 12, 2008 12:35 PM
You know, ANYONE can buy duct tape at Home Depot. And lengths of chain. And big plastic tarps.
Duct tape and chains are used to kidnap people. Drugs are wrapped up in plastic tarps for ease of shipment.
Home Depot has a reputation for selling to any and all sorts of people. They don't even care where your money comes from, or what kind of business you operated to get that money.
Why doesn't Home Depot "care" about the drug and slave trades?
Don't even get me started on the kinds of people who buy gas!
Published: May 12, 2008 12:37 PM
Ron wrote:
Diderich: "It does not address the issue where the fix to a problem is more expensive than the cost of a few hundred or thousand lives."
It absolutely addresses that issue. If such a fix was necessary to prevent a few hundred or thousand deaths the insurance premiums for an airline that refused to fix the problem would increase accordingly, or the insurer may discontinue coverage for the airline entirely. This is, after all, the whole reason for the insurance in the first place...to ensure the safety of passengers.
...I'm afraid Diderich is correct!
It is definitely cheaper (from the insurance point of view) to occasionally (it all boils down to statistics...) compensate for accident casualties than to invest and maintain the necessary infrastructure (ground and airborne) for fail-safe ATS (air traffic services) systems...
Published: May 12, 2008 1:18 PM
Radar Dude: "It is definitely cheaper (from the insurance point of view) to occasionally (it all boils down to statistics...) compensate for accident casualties than to invest and maintain the necessary infrastructure (ground and airborne) for fail-safe ATS (air traffic services) systems..."
Again, this completely ignores the effect the casualties will have on passenger confidence in the airlines' ability to safely convey them to their destination. This will naturally have an impact on the number of people who choose to fly on that airline versus a competitor. It may very well be that the numbers work out in favor of compensating for casualties, assuming revenue remains constant, but the loss in revenue due to fewer passengers will have to be taken into account, which I imagine would swing the balance in the favor of safety.
Perhaps you're suggesting that people are so clueless as to fly on whatever airline regardless of its safety record. If this is true, I blame the FAA for lulling us all into a false sense of safety.
Published: May 12, 2008 1:30 PM
Ron: "It absolutely addresses that issue. If such a fix was necessary to prevent a few hundred or thousand deaths the insurance premiums for an airline that refused to fix the problem would increase accordingly, or the insurer may discontinue coverage for the airline entirely. This is, after all, the whole reason for the insurance in the first place...to ensure the safety of passengers."
Insurance companies exist to make money, not ensure the safety of the passengers. No, what insurance does is set up a climate where the technical experts, the engineers and technicians, are afraid to speak out about problems they see on an airline. For example, a technician finds a problem, that could result in accidents. That is, the airline is flying at a higher risk. An insurance company, if it knew about the risk would charge higher premiums to the company, or force them to fix the problem. If the company stays quiet about the problem though, they don't get charged extra, and they don't have to fix the problem. Win-win...for them. Worse case, they lose an airplane, lay off all the workers, sell their assets and close down the business. Then the owners have more time to enjoy their yachts. Most likely, they change names, and open up operation again, ala Valujet/Air Tran. In this way, I don't see how insurance companies are any better than government regulators.
Furthermore, as the argument goes, all of these companies have put a dollar value on human lives. A wreck is going to cost $x,000,000, per death. So the amount of risk accepted by the industry is based on likely lawsuits, real property loses, legal fees, etc. But the risks are never really revealed to passengers to decide themselves if they think an airline is dangerous. And the companies in question are never held personally liable for deaths caused. At worst, the company is liable and goes under. To hold individuals responsible one would need government regulation, and then we're back to square one here.
I don't have a ready answer to this argument...that's part of why I read these articles everyday.
Published: May 12, 2008 2:14 PM
Diderich: "Insurance companies exist to make money."
How? How do insurance companies make money? They do so by providing a service to someone who is engaged in an activity that includes a degree of risk. The purpose of insurance is to mitigate the monetary costs of that risk. In the case of an airline, insurance mitigates the costs associated with accidents. Obviously, the less an insurance company pays in claims, the more money it makes. In order to maximize its profits, an insurance company would necessarily be proactive in ensuring that accidents are prevented, making air travel safer. In short, insurance companies make money by ensuring the safety of passengers. The two aren't mutually exclusive.
It is naive to assume that an airline could keep a safety risk quiet, as plane crashes always make the news. I would think a headline reading, "Bugaboo Airlines Suffers Tenth Airplane Crash This Quarter!" would make people think twice about flying on Bugaboo Airlines.
It would also be naive on the part of the insurance company to just take the airline's word that everything is groovy. Continued coverage would naturally be contingent upon regular detailed equipment and safety inspections. Thus would the insurance company make sure it was aware of any risk.
Diderich: "And the companies in question are never held personally liable for deaths caused."
This is precisely because government is in control. If insurance companies were paying the claims for deaths, the airline would pay higher premiums for insurance, or their coverage would be dropped. Thus, those responsible are held financially liable for deaths caused.
Published: May 12, 2008 2:55 PM
"Accidents would naturally be of particular interest to the insurers, and these events would be meticulously examined whenever one of their client's airplanes was involved, to try to establish the exact causes behind the crash. These investigations would then form the basis of any claims made by their clients relating to the accident, thus making them vital to both parties."
This is the one area that I would still welcome "non-profit motivated" legal oversight. Putting our trust in insurance companies to find the exact cause of an incident is one thing, but putting our trust in them to openly discuss and force airlines to fix rare event problems at hand is a whole different ballgame, because the airline will still be weighing the cost of increased premiums versus the distributed fix.
There is only one way to put safety above cost and that is the real risk of personal and criminal liability. Without such, an airline will always be reluctant to implement a fix that results in a "rare" catastrophic event and hundreds of deaths, regardless of what the premiums are. Why? Because there will always be an insurer that is willing to take the risk, to steal premiums from a competitor that will not. There will always be a low-bid, high risk insurance player. So the likely-hood of an airline actually not being insured due to lack of a "rare" event fix is virtually nonexistent. And when a plane drops out of the sky like a fiery brick due to lack of implementing a fix for a fuel tank wiring issue, which really only happens once in 20 million flights but kills 600 passengers, pure profit evangelists will be caught asking "why didn't the quest for the almighty dollar stop this?”
What is needed is deregulation with insurance supported “rare event” government oversight with criminal and civil liability for negligence.
I've said this a thousand times and I'll say it again; the world is not black and white. No one school of thought will fix all problems and ensure passenger safety.
Published: May 12, 2008 3:00 PM
John Brock: "There will always be a low-bid, high risk insurance player."
How would such an insurance company make any money? Eventually, the cost of the risk will outweigh the premiums collected. The company would be out of business at that point. Sure, an airline could go with a fly-by-night insurer, but what happens when the insurer goes belly-up as a result of assuming too much risk? Do they go with another rinky-dink high-risk insurer, and then another, and so on? How much faith would customers have in an airline that did so?
Published: May 12, 2008 3:20 PM
"To hold individuals responsible one would need government regulation, and then we're back to square one here. "
This follows, how?
Published: May 12, 2008 3:28 PM
John Brock says: "Because there will always be an insurer that is willing to take the risk, to steal premiums from a competitor that will not. There will always be a low-bid, high risk insurance player. So the likely-hood of an airline actually not being insured due to lack of a "rare" event fix is virtually nonexistent. And when a plane drops out of the sky like a fiery brick due to lack of implementing a fix for a fuel tank wiring issue, which really only happens once in 20 million flights but kills 600 passengers, pure profit evangelists will be caught asking "why didn't the quest for the almighty dollar stop this?”"
I agree with John's point. Those high-risk insurers may quite rationally expect that they will have made their sales reputations, earned their stock options and high incomes and have moved on before the air catastrophe occurs. Same thing with those who work for the airline and know of the rare-event risk.
Published: May 12, 2008 3:31 PM
....moreover, airlines are not the only cost-bearing party in a safe ATS environment. There are huge infrastructure overheads (air-ground comms, radar sites, ACC ops equipment/buildings/personnel, data links, maintenance and upgrades, etc.) that make the whole profitability issue very complicated.
Thus the European Union has opted for the economies of scale brought by the whole Single European Sky (SES) project, whereby many ATS units will merge into huge blocks of airspace (Functional Airspace Blocks or FABs) with multinational participation. Eurocontrol's Maastricht ACC (UIR/FIR) is such a FAB.
It should be noted that there is a degree of privatisation in some ATS providers (eg. UK's NATS or the german DFS pop to my mind) but it remains to be seen whether this experiment will prove profitable/viable (i.e. will other EU countries follow suit?)...
Published: May 12, 2008 3:34 PM
Then John can also answer why anyone would associate with this airline.
Published: May 12, 2008 3:39 PM
My question is how would general aviation fit into such a system? General aviation being all non airline aviation. This is a vital segment of the total aviation industry as it is where the majority of pilots are trained.
You mentioned that standards organizations would set standards for navigation safety etc. How would navigation facilities be provided?
Would there be a per use fee, or would a insurance certificate provide unlimited use for the term of the insurance(insurance co provide service).
The current system is funded by usage through excise tax on fuel for general aviation and per passenger excise tax and a reduced rate fuel excise tax for airlines.
There is also the type of flying being done, where all airline flying is done via instrument flying rules (IFR) under the control of Air traffic control (ATC). While the majority of general aviation is done under Visual Flying Rules ( VFR or see and avoid) and ATC is not used except at busy airports with manned control towers.
The current aviation funding bill in congress is a big fight between the airlines trying to shift costs from airlines to general aviation for the ATC system which was created by the airlines originally (circa 1930) and then taken over by the government for their benefit.
Published: May 12, 2008 3:41 PM
*airline or insurance agency, either one.
Published: May 12, 2008 3:44 PM
....for more on the Single European Sky concept take a look here:
http://www.eurocontrol.int/ses/public/standard_page/sk_ses.html
Published: May 12, 2008 3:48 PM
Inquisitor:
"To hold individuals responsible one would need government regulation, and then we're back to square one here. "
This follows, how?
Well, I may be wrong, but what I was thinking was along the lines of this. For a catastrophic fault which someone should be held criminally responsible for, they need to have committed a crime. I'm not sure what the crime would be, except failure to keep the aircraft up to standards...what standards? Government standards. And here we are at the beginning.
It could be that you charge the lot of them with negligent homocide and leave the burden of proof on the families of the deceased. They'll have to dig up internal company memos showing that some manager sat on information that caused the crash, because it would have increased premiums. Then, the courts would get to argue whether or not that was a good decision. In effect that leaves the courts deciding how much a life is worth in dollar terms, and it leaves an unrealistic burden of proof on the victims. Tricky. Maybe this is the appropriate place for government intervention: investigation of accidents to see if they are criminal in nature. Though this isn't without possibility of abuse as well, see for example recent EPA actions.
As far as whether customers would ride on unsafe airlines...well, its a problem of "past performance does not guarantee future results". You never know when someone calculates that his golden parachute is better than fixing some problem.
This is a common enough problem, so it may be addressed elsewhere. Should we expect every consumer to be an expert in aviation, the ins and outs of the airline industry, airplane maintenance, not to mention food additives, toy paint, automotive engineering, home loan financing, etc etc? Every transaction would become a month long research project.
I know that I would feel better placing my life in the hands of someone who has his life on the line as well. (or at least a substantial degradation in his quality of life). I'm not so comfortable when all they have to lose, is...well...nothing...Insurance pays out, they close shop and open a new business under a new name. Or worse yet, the insurance company doesn't pay up, goes bankrupt, and the owners close shop and open a new business under a new name.
Published: May 12, 2008 4:13 PM
Diderich,
The pilot who flies the plane is putting his body at risk and he is an expert in the industry, at least as far as the maintenance of the airplane.
The recent flap about DC9s having defective or at least unsafe wiring harnesses is an arbitrary decision by the FAA, I would be surprised if the change to the spacing of supports on the wiring harness was actually backed up by flight cycle testing in an environment test chamber with a shake table.
The news reports did not say whether this was a metal fatigue or an insulation wear through issue.
Radar dude,
the new euro scheme has been panned by general aviation advocates for excessive usage fees, and pilot license fees. The inappropriate usage fees have caused safety of flight incidents, due to pilots wanting to avoid the fees. For example 1000USD landing fees at large airports.
Published: May 12, 2008 4:32 PM
#######
#######
So, nobody in this thread has thought to bring up
deregulation of electric power companies across
America these past three decades?
The Enron debacle - to include those voice tape-
recordings of utility technicians joking about
turning off grandma's lights, in order to create
a scarcity of power in California and drive up
the cost per kilowatt - ought to instruct everyone
posting here.
Now, because of Enron's extremely bad free-
market example, every electric utility has either
nixed plans to deregulate or backed-off
recent changes to that effect.
#######
#######
Published: May 12, 2008 4:49 PM
"Well, I may be wrong, but what I was thinking was along the lines of this. For a catastrophic fault which someone should be held criminally responsible for, they need to have committed a crime. I'm not sure what the crime would be, except failure to keep the aircraft up to standards...what standards? Government standards. And here we are at the beginning."
Nope, just the given defence agent's standards - call it government if you will, but here we are speaking of the rectification of a wrong ex post, not the forceful, universal imposition of standards on innocent parties.
"It could be that you charge the lot of them with negligent homocide and leave the burden of proof on the families of the deceased. They'll have to dig up internal company memos showing that some manager sat on information that caused the crash, because it would have increased premiums. Then, the courts would get to argue whether or not that was a good decision. In effect that leaves the courts deciding how much a life is worth in dollar terms, and it leaves an unrealistic burden of proof on the victims. Tricky. Maybe this is the appropriate place for government intervention: investigation of accidents to see if they are criminal in nature. Though this isn't without possibility of abuse as well, see for example recent EPA actions. "
I'm not sure why government is needed to do this (unless you're assuming some sort of limited government, in which case it might bundle the service as part of the provision of law and order), and why courts cannot hire investigators to carry out the part. In short, if someone causes harm due to fraudulent misrepresentation of what they're selling, they are liable for it, and victims (or their heirs, or in their absence anyone who homesteads the claim) has every reason to prosecute them. There is more to lose than simply closing shop. This is where the legal system enters in.
.
Published: May 12, 2008 6:04 PM
I agree with the article. It does not address the question of who owns the airspace, and I would hope that it is owned by the landowner underneath, just as Blackstone (I think) suggested.
Air travel at present is subsidized. It does not pay royalties to the landowners underneath, nor does it ask for their consent. As a result the landowner has to wear not only the small risk of accident, but the brunt of the pollution from the plane (an excess of particulate matter) AND the infernal noise. This is the result of a legalized act of trespass.
Airlines should be negotiating with landowners for rights to airspace.
Published: May 12, 2008 7:56 PM
When you hire a contractor to work on your home, you ask to see his/her certificate of insurance. You then contact the insurer to make sure that the contractor's insurance is in force. You can also contact the Better Business Bureau to see if there are any outstanding claims. There's no reason why the same can't be done with an airline.
As for the quality of service, I'm sure that a rating system not unlike that found at Ebay or Amazon.com could be set up to provide feedback.
Published: May 13, 2008 1:16 AM
Regarding the "100s of passenger deaths" problem, even better than insurance would be competition and free speech in advertising. Just imagine the tv ad:
"AA killed 300 passengers last year, are you sure that you want to fly with those people?
Look at OUR safety record. No crashes in 20 years. The best maintenance or your money back. Fly with the best!"
Published: May 13, 2008 6:50 AM
It does not address the question of who owns the airspace, and I would hope that it is owned by the landowner underneath, just as Blackstone (I think) suggested.
Blackstone lived more than 100 years before air travel was invented, so I do not fault him for failing to properly answer this question. But we have no such excuse.
Landowners do not own the airspace. They own what they use, but they do not use the airspace thousands of feet above their land.
Ordinary landowners do not use the electromagnetic field over their land either. The first user of that EM field has the presumptively superior claim, which is generally held by whoever was using it to transmit messages on an EM band. (Of course, the government seized and redistributed this property in the 1920s in the early days of radio, but that's another story.)
Nevertheless, pollution invades the property to which landowners DO have a proper claim, whether by particulate and other chemical contamination, or ordinary noise that interferes with quiet enjoyment. But the right to stop these invasions does not depend on a claim to own all of the airspace above one's land.
Published: May 13, 2008 8:11 AM
Hahahaha, Deacon, what a joker you are.
The electric utilities were never de-regulated. The california electric problems were caused by regulations which abrogated long-term purchasing contracts.
Enron was nothing but a ponzi scheme that depended upon government regulations to profit, was set up by government insiders, and funded by investments by well-connected agents on the theory that people would be so scared of "global warming" that they would give government a blank check to "do something". When the Kyoto Protocol was not enacted, there were no "government pollution credits" to trade, and the pyramid collapsed.
The fact that these failures of government regulation were spun by government regulators as failures of a "free market" is no surprise.
No different than the Federal Reserve printing vast quantities of dollars, then blaming rising prices on "corporate greed".
Published: May 13, 2008 10:52 AM
Upon the lifting of the government ban on free exchange, would not individually insured passengers provide layers of the good kind of redundency. Surely business firms sending their agents from the home office abroad would find value in protecting their investment; and numerous packages from single trip to yearly premium for the tourist or casual traveler would be demanded and profitable. For most, the incentive to insure their air freight is clear, why not their own bodies? Their own lives? Such institutions, I imagine, as third party interests would provide fierce competion between the providers for the airlines and airfields and across the board check and balance conditions maximizing the safety and slashing cost. In such a crazy bizzarro world, safety may even become the incentive as individuals would be taking on the responsibility of securing themselves, and profit might be the consequence. Of course, such musings are irrelevent; I've already got the TSA and, as you know, they're from the government and they're here to help.
Published: May 13, 2008 11:42 AM
Life insurance companies want to make a profit. One way to do that is to only sell policies to those in the very best of health. Few insurance companies do that. Instead they charge extra for those with health problems. And, if the actuaries and underwriters are doing their job, the extra premium will exceed the expected cost of the increased risk.
Now, say the health problem is weight. The individual applicant might be motivated to lose weight in order to qualify for a lower premium. Of course, we know that this seldom happens, as the overweight individual already has had greater motivating factors that have not led him or her to lose weight.
Similarly, insurance company actuaries and underwriters can find the correct premium for even the riskiest of airlines. But in such a situation the airline will find that its cost to reduce its risk, and thus, its premiums will be less that the extra premium.
Insurance companies are generally pro-active in reducing risks. That UL tag on your extension cord is an example. Another example is offered by long-term care insurance companies encouraging policyholders to have regular physical check-ups.
I am glad to see that others have provided examples of services that do much of the heavy examination work for us. I rely on PayPal, ebay and amazon because that want to stay in business and make a profit. Consumers Reports could easily add a section devoted to air travel.
One final point. A few years ago I was in a small plane flying over the Andes. To get to our destination we had to fly directly into a storm. Hail beat against the windshield, the sky was dark, the plane was bouncing around violently. I looked over at the pilot and I told myself one thing: He doesn't want to die.
Pilots are experts. They do not want to die - neither do the flight attendants. Both these groups of people do go along way toward providing us with safe air travel. I would guess that many pilots and attendants have a long list of safety suggestions. Let's start asking them.
Published: May 13, 2008 12:06 PM
Ernie,
Noticed how no one responded to your argument about general aviation? That's because no one, least of all this brilliant "aviation enthusiast", knows anything about it. The writer is, however, more than willing to betray his astonishing ignorance of a topic he declares himself an expert at, in order to make himself "right" at our expense. He knows that no one who actually knows anything about it will respond.
Well, he guessed wrong this time!
What? No discussion of Capstone which is already making free flight and hugely reduced accident rates a reality in Alaska? And all this talk about owning the skies is so ridiculous it makes the whole school look foolish. This is an idea that should have never made it out of brainstorming.
Frankly, I'm very suspicious of the timing of this article, just as the Bush administration is about to veto a bill that AOPA worked on for years to help maintain our freedoms and finally got passed.
The shameful lack of discussion about general aviation is reflected in the same disregard being shown by this dirty and corrupt government, now trying to hand over control of the FAA to the airlines. I wouldn't be at all surprised to learn that the scholars at the Mises School think this a decent interim solution. Well, the Mises Institute does itself no service by trotting out Stephen Molyneaux's insurance company argument and trying to paste it into a spot it clearly doesn't belong. I shudder at the thought of this incredibly complex system being handed over to a group of executives so massively corrupt and incompetent that they routinely bankrupt airlines at the rate of a a dozen a year, chuckling on the way to a soft landing underneath their golden parachutes. Don't give me that "they have an incentive to keep accident rates low" business. Put yourself in their shoes for 5 horrible seconds. You're 62 years old, about to retire and have a choice. You can make a huge investment in lowering accident rates or simply place a small dollar value on human life, then deny, deny and deny when the claim comes.
Please. Don't be so naiive.
We need a smart solution that allows us to keep our freedoms and fly our planes. General aviation just may be the last freedom we have in this country and the Bushies know it. If they can regulate us out of the skies, no one will be allowed to escape any further regulation of anything ever again.
Flight is not a commodity. It is a miracle of man's own making. Only man can undo it, which he is trying his level best to accomplish in the shortest time possible.
Arguments like this one do not advance the cause of freedom, but they may well chart the course for ignorant bureaucrats who love to make straw men, then cut them down with their horrible evil life-threatening "solutions".
Published: May 13, 2008 12:09 PM
Um, Molyneux didn't originate the insurance idea... as for the idea of owning the skies making the school look foolish, if they do it is precisely because too few people understand the concept involved.
Published: May 13, 2008 12:26 PM
So, nobody in this thread has thought to bring up
deregulation of electric power companies across
America these past three decades?
Electric utilities were not deregulated. Regulations were simply replaced by other regulations. This is especially true in good ol' California, where the "deregulated" companies had to buy power from a specific source, at prices regulated by a Stalinist-type commission. Oh, and no new power plants (at least, no big ones) are permitted to be built.
The Enron debacle - to include those voice tape-
recordings of utility technicians joking about
turning off grandma's lights, in order to create
a scarcity of power in California and drive up
the cost per kilowatt - ought to instruct everyone
posting here.
They instructed me that Government-mandated anything is a bad thing, always. Enron was the bastard child of the State. And like Chronos, the State eats its own children.
Now, because of Enron's extremely bad free-
market example[...]
Enron is not an example of a free market. Otherwise, there would be either not an Enron, or several, competing Enrons.
every electric utility has either
nixed plans to deregulate or backed-off
recent changes to that effect.
Actually, it is the State that deregulates, not utilities. And frankly, the State needs no excuse to stop a deregulation process - all it takes is the will of the thief.
Published: May 13, 2008 2:42 PM
Dietrich,
It does not address the issue where the fix to a problem is more expensive than the cost of a few hundred or thousand lives.
Customer confidence and reputation are much more expensive if lost than the cost of maintaining a fleet of airplanes in good working order. Also, try to get pilots to fly them if they know a company does not give machines their required maintenance.
This is where the majority of people get uneasy with handing things over to the private sector. I'm curious what response to that concern others have?
And yet people do not get uneasy about handing other things to the private sector. The problem is that people have grown accustomed to the idea that government is the owner of safety standards. This is a cultural issue, not a market issue.
[...] I was thinking was along the lines of this[:] For a catastrophic fault which someone should be held criminally responsible for, they need to have committed a crime. I'm not sure what the crime would be, except failure to keep the aircraft up to standards...what standards? Government standards. And here we are at the beginning.
You are begging the question by assuming that government sets standards. Actually, government bureaucrats are not clever enough to figure standards a priori, which would be needed in order to prosecute someone for gross negligence. Standards are placed by the State only after extraordinary events, such as an airplane falling from the skies, but this happens long after the market (the purchasing decisions of people) have dealt with the problem, making such "standards" redundant. For example, the DeHavilland Comet Mk1 was a magnificent piece of engineering when it first appeared, being the very first commercial airplane to use turbojets. When 2 of them crashed, the design flaw they suffered was enough for many airlines not to buy it, instead opting for the Boeing 707. It does not matter that the airplane was redesign, or that governments established some a posteriori regulation; most airlines' purchasing agents did not issue purchase orders for more DeHavilland products, such is the power of reputation.
Should we expect every consumer to be an expert in aviation, the ins and outs of the airline industry, airplane maintenance, not to mention food additives, toy paint, automotive engineering, home loan financing, etc etc?
People do not need to be experts on everything - there are more than enough people willing to become experts on such items for a price - see periodicals like Consumer Report, or UL. However, using the premise that people cannot be experts on everything as a way to argue in favor of the State begs the question - how can the State become expert on everything?
Published: May 13, 2008 3:12 PM
How can anyone say that what we have now for general aviation is the end-all be-all of safety and "freedom"?
An unregulated general aviation could very well solve these problems better than the FAA.
To assume that the FAA and government-mandated systems are done well is to make an assumption about a specific government program that flies (as it were) in the face of all experience of government regulation and control.
Published: May 13, 2008 4:31 PM
Markus's piece is interesting, however the title, "anarchy airlines" is pure nonsense. Anarchy is a well developed social and political ideology, that while yes it is in opposition to the state, it is equally against privatization, and so claimed "free markets". Mostly the only anarchists who consider anarcho capitalists anarchists are anarcho capitalists.
Published: May 13, 2008 4:40 PM
Lydia, the musings of elitist fools whose anarchist credentials are often at best questionable and who ignore an entire history of individualist anarchism, and who obsess over semantics, is not of any interest, at all. So before calling something "pure nonsense", make sure you're justified in doing so.
Published: May 13, 2008 5:55 PM
Magnus says:
"Blackstone lived more than 100 years before air travel was invented, so I do not fault him for failing to properly answer this question."
Blackstone's answer was totally consistent with the 18th century understanding of the universality of private property.
Land ownership extended up to the sky (ad coelum), beneath the surface (ad inferos), and to the center point of any bounding road or river. Left alone, this could have been the foundation for the free trading of rights without any involvement of the State, and with the clarity to resolve all future real-property disputes.
It was no fault of Blackstone's that the first test case of this princicple came at a time when private property was no longer sacrosanct. The Supreme Court legalized the transfer of airspace to the State in the "public interest".
Blackstone's rules actually still operate, but at the national level. It is now the State that guards its right to airspace and substrate, collecting royalties or shooting down trespassers, all without compensation to the dispossessed landowners.
"Landowners do not own the airspace. They own what they use, but they do not use the airspace thousands of feet above their land."
Whether I use it or not is irrelevant to trespass. I might seldom use my garden, but that does not give anyone the right to take a short cut across it when I am not using it.
Moreover, to say that I do not use my airspace is presumptious.
I might be an astronomer pointing my telescope skyward in the expectation that this cone of sky will be clear.
I might be an ardent conservationist. I have bought a larged fenced acreage, replete with native plants and animals. I do not want planes overhead which scare my animals, nor helicopters that interfere with my raptors.
And just where do you draw the line? A hot air balloon makes little noise and leaves few emissions. Suppose that it drifts over my garden, and its occupants peer through my windows. Or perhaps they come at night while I am asleep, and examine the interior using invisible infrared light.
By your reasoning, I have no claim against it, because it is occupying airspace that I do not use.
"Nevertheless, pollution invades the property to which landowners DO have a proper claim, whether by particulate and other chemical contamination, or ordinary noise that interferes with quiet enjoyment. But the right to stop these invasions does not depend on a claim to own all of the airspace above one's land."
If there were a right to stop such invasions, then I could stop every car and every plane operating within miles, since pollution drift has few limits. No, the best that I could expect is to be compensated for the inconvenience. That is no substitute for my stolen right to airspace.
Published: May 13, 2008 7:59 PM
Steven,
Being a pilot is very much about liberty. It is the ultimate personal responsibility and the freedom to go where and when you want.
Like all government the FAA cannot provide safety. The only thing it can do is codify standards for rules of the road, navigation equipment, pilot training. A great majority of which was created before it came into existence and could be provided by just a standards organization.
We already have private contractors providing pilot testing (DPE) and safety and engineering enforcers
(DER Designated Engineering Representative). Both types basically sign an affidavit certifying that pilots or designs or maintenance meets standards.
In my opinion the homesteading of the sky has already occurred. It is history. The ownership is by the people who use it, Pilots, aircraft owners, commercial aviation.
Like you I see no discussion on how to get from now to some future scheme. True market solutions were cut out of the debate when the CAA(precursor) of the FAA was created. It seems to me that successful market solutions are not sprung from Zeus brow, but are a gradual trial and error process.
As you mentioned the capstone project (prototype ADS-b) is a way to greatly reduce the complexity and cost of ATC and to increase enroute safety.
Curt Howland,
The current system is not ideal, but it seems to me to operate more efficiently than other government programs. It is de facto owned and controlled by the major stake holders , the airlines, who in addition to barriers to entry and other corporate welfare have an interest in having a system with the lowest cost to themselves.
The system is funded by excise taxes closely approaching usage of the system. The capital facilities are not funded by these taxes, airports, navigation facilities but come from general revenue and local governments.
I am all for curbing the airlines control by privatizing.
All pilots would appreciate a more cooperative standards setting procedure.
Published: May 13, 2008 8:41 PM
"...it is equally against privatization, and so claimed "free markets".
Lydia,
Please explain how it is that you arrived at the notion that anarchism is against privatization and the free markets.
Thank you.
Published: May 14, 2008 2:26 PM
IMHO,
Yeah, that one from Lydia got me too. Then I realized that what she is saying is that anarcho-capitalists aren't anarchists at all, and that real anarchy means we must abolish private property as well.
And that's total rubbish. I grant Lydia the possibility that anarcho-communism or anarcho-syndicalism or some other anarcho- could be the model that a large number of people chose to pursue in a society without the state, but only anarcho-capitalism has a coherent basis of economic theory to support it. Refuting these other theories is ridiculously easy.
Anarcho-Communism: tragedy of the commons, socialist calculation
Anarcho-Syndicalism: Wants to abolish the state, while paradoxically blaming all problems on capitalism and business activity. It's proponents apparently never heard of entrepreneurs and see wealth-production as something that a mob is quite capable of coordinating. See Anarcho-Communism, above.
Collectivist Anarchism: See Anarcho-Communism, above.
Published: May 14, 2008 4:04 PM
Thanks for your response, Scott. It was my feeling as well that she might have been thinking of anarcho-communism.
Published: May 15, 2008 1:01 AM
I don't see how an airline can justiofy any form of skimping or saving on safety in order to reduce costs. The cost of even one life lost because of their negligence would be millions.
It is an interesting industry because if I fly to Burma and then fly back home, am I subjecting myself to Burma's (possibly lower) safety standards when departing there in another connecting aircraft?
I would prefer to be protected by some form of safety guarantee that is internationally recognised, even if it was given by a private organisation.
As for air-traffic control...well to wrest that from government would require private ownership of the skies. Not going to happen.
Published: May 16, 2008 1:48 AM