Friday, July 23, 2010

Back in the Good Ol' Days

Loren Steffy points out that air travel is far less expensive and far safer than it was during regulation. Citing an article from the Wall Street Journal, he notes
A round-trip coach ticket between New York and Los Angeles was $208 in 1958, according to the Air Transport Association. You can still sometimes find a $208 ticket today, but that 1958 price is $1,570 in today's dollars.

From 1964 to 1973, there was an average of seven fatal accidents a year on U.S. airlines. The fatal accident rate per departure in 1969 was 13 times higher than in 2009
And then he correctly concludes:
Now, it's [air travel] just another form of mass transit. As bad as things may seem now, the good ol' days weren't that great, either. 
Air travel is far more complex than moving people around a city. Yet, we are constantly told that government must provide mass transit on the local and regional level. Private businesses have mastered mass transit between cities and between continents, but they are virtually prohibited from offering such services on the local level. And when government doesn't explicitly prohibit such offerings, subsidized government entities make it impossible to compete.

While the aviation industry remains heavily regulated, even some marginal freedom in the industry has resulted in lower fares for consumers and safer travel. Motivated by their own self-interest--profit--private companies have sought to make travel more affordable and less risky, both of which benefit consumers. The same is true of every industry.

Despite these lessons, we are told that we need more incompetent government meddling in health care, the auto industry, and the financial industry. Private businesses take the blame for government regulations time and again, despite the overwhelming evidence that those regulations lead to nothing but misery.

Back in the good ol' days, when people were taught to think in principles, these scams would be quickly and widely identified for what they are--a power grab. Back in the good ol' days individuals had a genuine respect for the rights of their neighbors. Back in the good ol' days individuals did not turn to the government to cure every cold and bandage every scraped knee. Those must have been good days.


Mr. Moderate said...

Steffy glosses over the fact that deregulation had little to do with improved air safety. Deregulation applied mostly to routes and fares, safety is still highly regulated. There are FAA mandated schedules for maintenance, licensing of mechanics, etc. The biggest non-regulatory contributor to improved safety is more reliable engines. Today's engines seldom fail, and may run for years without any problems. The move to fly by wire and improved computers have also contributed to safety, by making it far more difficult for pilots to do something stupid.

This is not to say that deregulation is bad, I'm reasonably happy with the results. But lets not falsely assign the credit to the wrong factors.

Brian Phillips said...

I agree that to assign all of the credit for improved safety to deregulation is a stretch. There are other factors involved.