> After a relatively short period of fierce competition, the deregulated era quickly turned to consolidation and cost-cutting, as dozens of airlines either went bankrupt or were acquired.

> Deregulation even failed to deliver the one thing it is sometimes credited with: lowering prices. Airfare did get cheaper in the years after the 1978 deregulation law. But the cost of flying had already been falling before deregulation, and it kept falling after at about the same rate.

What a bizarre argument, that absolutely demands more examination than a throwaway line upon which the entire premise of the piece hinges.

There’s lots of reasons why fares would be falling in the early days that you wouldn’t expect to continue for decades. Yet the author seems content to pretend there’s some mysterious factor that causes prices to fall for decades that we can infer from just a few year’s data. From first principles, you should always expect that regulation increases prices and the burden of proof is to argue why it would not. Embarrassing that the author is a professor and didn’t bother making a proper argument.

A key argument that led to deregulators winning is showing that intra-state fares—which were not federally regulated—were about 40% cheaper than one might expect when comparing to interstate. Anyway, there are articles that go into various reasons why deregulation very probably substantially decreases fares.

I don’t see how that is true.

Note: I'm not saying anything about cost/benefit. It could definitely be true that the benefits are well worth the cost. And it could also be true that a benefit is a lowering of an expense somewhere else lowering overall prices. (which is the thing that is not obvious and need to be explained) But there is a cost that needs to be covered by something. And that cost is usually going to result in increased prices in one form or another.

Some regulation may lead to negligible higher prices, so it bears asking not just is there an effect, but what is the magnitude of the effect. If minuscule, then we can ignore it.

Even these regulations can increase prices, for example by driving market consolidation or reducing price transparency and increasing overhead as people devise convoluted workarounds.

Price controls also have a tendency to create shortages, causing the product to only be available via black markets that carry a risk premium (and so high prices).

> Some regulation may lead to negligible higher prices, so it bears asking not just is there an effect, but what is the magnitude of the effect. If minuscule, then we can ignore it.

A regulation setting a maximum price of a trillion dollars would have negligible negative impact because nobody would charge that much anyway, but it would also have negligible positive impact because nobody would charge that much anyway. You can obviously pass a regulation that does nothing and then it does nothing.

Customers prefer lower prices all else equal, so that's what they'll choose when all of the options are on the table. Prohibiting certain things only takes options away. If they weren't the lowest cost options to begin with then prices may not increase, but then you have to ask why anybody would have chosen that to begin with over the thing that costs less. If the thing you prohibit was the lowest cost option, prices go up.

Or (as they occasionally do) they can achieve the complete opposite. Making such an argument (from both sides) completely worthless without additional context.

But the people who have time for that are the incumbents, so you end up with rules that on their face are supposed to help the little guy and in actual fact do quite the opposite.

Here's an example. It's a common trope that consumption taxes hurt the poor because they spend a higher proportion of their income so we need to use income tax. But if you look at the numbers, the upper middle class spends the large majority of their income too. You don't get to people who only spend a small fraction of their income until you're into the investment class -- and those people don't pay income tax either. Partially because of transfer pricing and things like that, but at root because they reinvest whatever they don't spend and business expenses are tax deductible. So the claim is BS.

Meanwhile the huge advantage of a consumption tax is that it's hard to avoid. What rich people actually do when there is an income tax is minimize their "income" and buy on credit, which in many cases lowers their taxable income even more if the interest is tax deductible. Whereas with a consumption tax, if you want that yacht you're paying the tax whether you took out a loan for it or not.

So the powerful put out this propaganda that the tax they would actually have to pay is the one that hurts the poor and the one they have many ways to avoid is the one we need to use. But ordinary people aren't all that familiar with how rich people accounting works, so they buy that theory and fight against a change that could shift more of the tax burden from the middle class to the rich. There are also a bunch of things about how the income tax on capital gains benefits not only rich investors but huge conglomerates, on and on.

So unless you have some way to counter this information asymmetry -- and as yet this appears to be an unsolved problem -- the default presumption has to be that a given regulation is inefficient or corrupt. Because most of them are.

No increase in expenses.

1) acquire airplanes

2) acquire pilots

3) plan routes

4) set prices

5) acquire customers

Seems to me regulations that set prices actually save a step.

Cars are a good example. They've been dropping in price historically as the government adds on more regulation.

The funny thing is that this is being brought up again and again as an argument against regulation. You'd think the smart business people would know some economics, so they are either lying or not that smart.

OTH if they for instance increase safety longterm you might expect demand for air travel to increase.

It doesn't need to be higher prices, but regulation tends to bring in enough distortion that isn't transparent so we cannot know what a proper price really is.

Being an idealist, I prefer rules which lean towards fairness, legibility, and predictability.

Air travel was glamorous because if you can’t compete on cost you compete on service.

Say... would you be interested in a bridge?

This reads like:

From first principles, you should always expect that adding lines of code increases the time it takes to execute and the burden of proof is to argue why it would not.

Just like code, economies can be made more complex, which can increase their efficiency.

I would also argue this is true? Assuming more lines of code directly translates to more CPU instructions

Yes, so the burden of proof is on the algorithm. Adding more lines of code, by default, makes the code slower. If the algorithm is more efficient, it can make the code faster. But it must be more efficient.

This logic seems to hold up to me, but maybe I’m missing something here?

I’m not arguing that a more complex algorithm can do the same stuff quicker. Of course you can do that. There’s plenty of examples of that. But in the general case, doing more things takes longer.

Of course, the CPU can execute instructions in parallel, it can pipeline instructions and gain a higher throughput, it can predict branches, etc. But those are things you have to be intentional about enabling more often than not. Making small changes in the higher level code can ruin whatever performance gains you had gained because you accidentally trashed the throughput or something.

Generally, more instructions takes longer to process. Of course, a more complex algorithm can do the stuff quicker. But it’s not the default and depending on the problem, it can be very difficult to get it to go quicker with more instructions.

This isn’t even something that should be hard to conceptualize. Getting an element out of an array using an index is O(1). Getting an element out of a hashmap is also O(1) (when there’s no collisions). Even though these both perform the same in terms of complexity (“constant” time) the array will win every time if you already know the index. Why? Because the hashmap uses more instructions to figure out where the index is.

So I really don’t understand why the assumption that: generally, more code = slower is a bad one to make. Unless you explicitly try to make the code with more instructions faster, it will usually be slower than if you did it with less instructions.

It is actually the core of the entire understanding. There is no mapping whatsoever lines of code and instructions executed. A finite program that doesn't halt will result in infinite instructions. Less pedantically a sorting function that is far more efficient will result in the instructions corresponding to individual operations being called thousands of times less.

Basically everything from function calls to loops ruins any mapping between brevity and execution time.

And just to be clear, I do agree with everything you’re saying here, but I do think you’re still being overly pedantic.

> Less pedantically a sorting function that is far more efficient will result in the instructions corresponding to individual operations being called thousands of times less.

Exactly. The goal is to spend fewer instructions to achieve the same outcome. As soon as you start thinking about how different instructions take different amounts of cycles and you can speed up an algorithm by using more instructions that are cheaper, that kind of proves my whole point. You can speed up an algorithm by using more instructions, but you have to be intentional about it. The default will never be: more instructions = faster.

Basically,

> You can speed up an algorithm by using more instructions, but you have to be intentional about it.

I feel like most code is written with some intention. It depends on whether or not you believe that most code is written competently, I guess.

The key is that code isn't running in a vacuum. It's operating on data (or controlling systems, etc). A smaller amount of code may be operating on the data in an inefficient manner, whereas a larger amount may be doing it more efficiently.

In the above talk, this contrast is very stark, because the "more code" version does some stuff and then does the exact thing the "less code" version does, yet is faster.

This kind of thing is common enough (albeit less stark than in the above example), that "less code is faster" is not a great "default" assumption to make.

Ryanair allowed me to fly across the Europe for $15 back when I was a poor student. It was either this, or not flying at all.

People are people. Your argument is strong enough without the ad hominem.

It's just like saying "embarrassing that $person is a firefighter and set their home on fire playing with matches" would not be an ad hominem.

An ad hominem would be: "embarassing that $person is a Harvard grad, making such an argument.", or "of course, we can expect such reasoning from someone writing an article for $publication"

The example you cite seems closer to attacking a person based on their arguments being (perceived or claimed to be) bad. If you say "embarrassing an XY grad would make such a stupid argument" it will only discredit the argument if I believe XY graduates are stupid (I guess the $publication example aims at this). Meanwhile, if I don't see why the argument is bad and don't have a bad opinion of XY, your statement is entirely unconvincing.

Regulation routinely reduces cost. It’s all to do with the nature of the regulation. Only one party is incentivised to say trot out this “regulation is bad” BS and its businesses that want to operate in an ancap utopia because they weren’t lucky enough to make regulatory capture work for them. It’s always disappointing when individuals get swept up in believing this tripe.

Can you provide an example of this actually happening in a competitive market?

> Only one party is incentivised to say trot out this “regulation is bad” BS and its businesses that want to operate in an ancap utopia because they weren’t lucky enough to make regulatory capture work for them.

Businesses that want to challenge an incumbent who succeeded in making regulatory capture work for them would be an obvious counterexample, and for the same reason the customers who want to see the challenger succeed in making the market more competitive.

Tobacco companies probably made a bunch more money as aspects of their advertising became restricted/regulated/banned - because they were basically in an arms race with one another and spending more and more to maintain market share. But that is a pretty specific case, I'm not going to make any claim that's general or applies to airlines.

https://www.nytimes.com/1989/01/02/business/the-media-busine...

https://fred.stlouisfed.org/series/CUUR0000SEGA

No doubt you'll no-true-scotsman "competitive market", but buying a house in the UK got significantly smoother/cheaper when sellers were required to provide a certified survey to all interested parties, rather than each buyer having to commission their own survey. Lemon laws are widely recognised as making it cheaper to buy a reliable car. Food safety regulations made food a lot cheaper by rendering imported food trustworthy.

I default to "regulation increases cost" as well, and think that the default position should be to justify it, but I don't think the opposite is a zero-instance situation.

And then because it was a chance to monopolize something it got infested with organized crime. Which is the main reason it was short-lived and never got to evolve into a functioning market. Governments found it easier to prohibit whatever was going on there than hire enough police to arrest all the firefighters.

There are fairly obvious ways to recreate something that looks pretty much like the modern system without government regulation. A city has however many fire houses that major fire insurers prepay a rate negotiated based on how many homes they insure in that service area. Since prepaying is cheaper than paying per-incident that's what substantially all the insurers do, which mutes the incentive for firefighters to hack each other to pieces to get there first.

That still isn't a lot of competition, but at least now you're negotiating for a price before the house is on fire. Which could be enough to cost less than what the government currently does.

Many regulations are needed to keep the "free" market from destroying all the good that it can do. One famous example is monopolists that are created in a free market and then use their power to make the market unfree. Only government regulations destroy these monopolies with anti-trust laws. Then there is pricing in so called free markets that are not in fact free. Such as pricing of infrastructure and services.

To name one perfect example of where government regulations lower the prices of services is in the healthcare industry. In most western countries (not the us tho) healthcare is relatively cheap and also accessible. This is because it is regulated. In the US it is barely regulated and very expensive. Without regulation the market will also destroy the environment. This is a "hidden cost" or an externality. I'm not patiënt enough to write a more coherent and better written response. But if you are at all interested in learning something or allowing yourself to be disproved, I would suggest you start by googling: "succesful regulation" or "examples of market failure".

The thing about "free market" is that it's like "reasonable person" in that it's an ideal rather than something you can actually find in the street. You want to get closer to it even if you can never actually find a flawless example.

A monopoly is basically the opposite of a free market. But where does a monopoly come from? For the most part they're a result of government regulations. The monopoly sucks and everyone hates it so you want to go into competition with them, what stops you? For the monopoly to persist there has to be some law that prohibits anyone from doing that or makes it infeasibly expensive.

The problem here is that unless you're going to go ideologically pure full anarchist, you can get to that point if the government does as little as enforcing contracts or property rights. Because then you could have contracts for selling your children into slavery or a single corporation that the government says owns all property.

So once the government gets involved with something, it has to be sure nobody is leveraging that into a private monopoly. But this is why government involvement should be minimized -- that risk increases the more they do, and there is abundant evidence that governments repeatedly fail to mitigate it effectively and prevent private monopolies from forming.

> Then there is pricing in so called free markets that are not in fact free. Such as pricing of infrastructure and services.

You're referring to natural monopolies, which is once again obviously not an example of a competitive market. The key in these cases is to narrow the natural monopoly as much as possible and prevent anything more from being tied to it than is absolutely necessary. For example, one of the classic mistakes we've made is allowing the natural monopoly on the physical last mile for data service to be leveraged into control over interconnection and over the top services like video and telephone.

> To name one perfect example of where government regulations lower the prices of services is in the healthcare industry. In most western countries (not the us tho) healthcare is relatively cheap and also accessible. This is because it is regulated. In the US it is barely regulated and very expensive.

The US healthcare industry is one of the most highly regulated industries in the world. Competition is low because FDA approval is hard to get and the AMA uses regulatory capture to limit the supply of doctors, government incentives promote employer-provided health insurance that disguises pricing from patients, "certificate of need" laws constrain competition between healthcare providers etc. etc.

The typical claim is that single payer systems have lower costs, but nearly everything has lower costs -- the US has some of the most expensive healthcare in the world -- because it has some of the most onerous healthcare regulations. Meanwhile countries like Singapore have lower costs and good outcomes with a predominantly private healthcare system, because it is less inefficiently regulated.

> Without regulation the market will also destroy the environment.

This is clearly not an example of regulation lowering consumer prices. The claim was never that regulation can never be necessary. You don't want the widget factory dumping industrial waste in the river, but prohibiting that isn't generally a means to lower widget prices.

It can even do both things at the same time. You can have a regulation that succeeds in reducing pollution while also being dramatically less efficient than some other means of achieving the same goal. This is why government regulation is so precarious: If you get it wrong nobody else can fix it because anybody who tries to do it another way is incarcerated.

The latter is better to such a degree that the former is just a toy example with no practical use outside of academic discussions and corrupt politicians who want to avoid solving the underlying problem on purpose.

This leads to shortages.

I am speaking from experience here. I'm an anesthesiologist, and with three exceptions I can think of, our drugs are all off-patent, so their prices are basically a function of production costs. But the federal government of the US, which buys a lot of drugs under the VA and Medicare, has a rule that you can't increase the price by more than X% per quarter (or year, not sure). Now, we all agree that this sounds like a good regulation. Right? Nobody can just raise the price of insulin by 40000%?

Except that generic drugs really don't make much money, and when one company leaves the market for a given drug (there are usually only 2-3 manufacturers per drug), the remaining corp(s) can only make up the shortfall by moving to 24-hour operations (in the short term). Staffing that means hiring more people and paying overtime. So the cost of production... doubles, at least.

The part that is missing: it's a drug that sells for twenty cents for a sterile ampule. Doubling it to forty cents is not going to break the bank. It's cheap, it will continue to be cheap, and yes - in the long run, someone will set up a line to make it for ten cents and sell it at twenty. But in the short run? You run out of drugs. I've seen it in almost every category of anesthesia drugs (induction, opioids, paralytics, paralytic reversal, etc.) in the last ~20 years. You'd think that "not being aware during surgery" would be one of those things that people would care about, but it isn't.

Or lower margins. After you spent millions/billions on R&D, testing and approval, why would you purposefully decrease your product just because your margin now is not 2500% but 1000%?

Of course this might affect your willingness to invest into developing new drugs in the future

But if you have an uncompetitive market on purpose as a result of patents meant to increase margins to fund R&D, a law capping prices is a screw up because it was meant to be the way it was.

Whereas if you have an uncompetitive market unintentionally as a result of some other regulatory failure, a law capping prices is a screw up because you're not actually lowering margins from 2500% to 1000%, you're just raising them from the ~5% they ought to be to 1000% instead of 2500%, which is still bad.

How about EU regulations on the price of mobile phone roaming between member nations (the "roam like home" rule)?

This isn't the same thing as whether you like the result of the rule. Maybe paying a little bit more in total in exchange for having a more predictable monthly bill is something people like. It would still be paying a little bit more, if the market there is competitive.

Economic theory usually assumes pute and perfect competition, which doesn’t exist in many markets

It's easy for regulations to lower costs in an uncompetitive market because the lack of competitive pressure allows the incumbents to do all kinds of inefficient nonsense that would drive them out of business if it was actually practical for new competitors who don't do that to enter the market and undercut them on price. But what you want to do in those cases to the fullest extent possible is to restore competition to the market, not try to regulate the incumbents while keeping them as a monopoly/oligopoly. A set of regulations that gets you 8% of the benefit of actual competition can be a significant improvement from the status quo while still being by far the less effective solution.

The carriers would charge high prices to each other for roaming, and pass those on to their customers. The market had worked itself into a stupid corner where nobody wanted to come down on wholesale roaming costs because they would lose out to cross-border carriers.

The EU capped the wholesale rates and mandated that there be no retail cost, so now carriers are charging less to each other and consumers are roaming on their own numbers without worry, and without the hassle, expense, and waste of buying SIM cards all the time.

It's been moderately beneficial for carriers, and a huge benefit for the public. The imposition of regulation has enabled the companies to be more profitable and consumers to get more value.

So it was already available at a low price via a different route.

> The carriers would charge high prices to each other for roaming, and pass those on to their customers. The market had worked itself into a stupid corner where nobody wanted to come down on wholesale roaming costs because they would lose out to cross-border carriers.

You're describing an uncompetitive market. The local carriers have such high market share that charging otherwise-profitable wholesale rates would deprive them of a monopoly rent so they're not willing to do it.

Compare this with a market where there are carriers with low market share who don't care about cannibalizing someone else's retail sales to get more wholesale customers.

> It's been moderately beneficial for carriers, and a huge benefit for the public. The imposition of regulation has enabled the companies to be more profitable and consumers to get more value.

The drawback of this approach isn't that it can't produce an improvement relative to a preexisting uncompetitive market, it's that it leaves the uncompetitive market in place. Which is almost certainly itself a result of existing regulations.

Suppose the way mobile networks operated is that anyone can build an independent cell tower and then auction off capacity in real time. Which makes it easy to operate a cell tower; you just build one and sell into the market. So you end up with dozens of local cell tower operators or more and any carrier, local or otherwise, with a customer in the area can bid for capacity from any of them. Which also means that anyone can start a carrier, because "carrier" just means you resell wholesale capacity from all these independent cell towers and your business is to bill the customer and provide customer service.

Doing it that way is going to solve your roaming problem and seven hundred other problems and lower prices. But existing regulations don't facilitate this, do they?

It makes about as much sense as having multiple competing rail networks or power lines, the more tower there are the higher overall cost per user.

That's the amount you'd expect them to charge -- the cost of building a tower. That is what they have to recover.

If they try to charge much more than that then it's profitable for someone else to build one.

> It makes about as much sense as having multiple competing rail networks or power lines, the more tower there are the higher overall cost per user.

If you have more towers you can reduce the transmission power of each one and it increases the available bandwidth by reducing signal overlap. If the towers themselves used realtime spectrum auctions then the tower nearest the user could come in with the lowest price because it could use lower transmission power and less spectrum.

You can also very reasonably have competing rail networks or power transmission lines because they don't have to use 100% all the same routes to ultimately still connect all of the same cities. Then some may be more efficient for certain routes but the alternative still puts an upper limit on what they can charge, and provides for redundancy in case one of the lines or networks is unavailable.

Yes. Now they can’t do that so prices are lower.

The regulations didn’t really make the markets more competitive though. They just capped prices.

Which is why the regulations are still causing prices to be higher than they ought to be.

What? No they don't. Not without considerable adverse effects at least. You're not referring to price ceilings, are you?

Similar to what you said I find it’s disappointing when individuals get caught up in believing that regulation or “more government” must be good while they ignore the externalities that the government brings to bear - I’m still trying to figure out why the government is regulating my EV like it’s a super duty F-250, and why the government made it illegal in my state to bring my own bottle of wine to a restaurant.

I’m also trying to figure out why the government is leasing my land in Alaska (I’m an American, therefore it’s mine as well - yes I’m aware of recent Biden admin actions +) for oil and gas companies but won’t approve new nuclear reactors.

It’s also crazy to me that the government doesn’t regulate by making mandatory seatbelts a requirement for school busses, and why it fails to regulate (ban) additive sugars and vaping and all sorts of other harmful products.

I’m not trying to both-sides it here, but the central theme is everyone has an opinion on this stuff and the truth is regulation is good and bad, and it can cost or save money. We shouldn’t get into X is good, Y is bad. It lacks nuance.

In terms of regulation reducing costs, you only need to look at Europe.

Regulations in education, housing, medication, cellular networks, utilities, etc. have all driven cost down to one degree or another depending on which specific regulation a country has implemented.

“Ah”, says the American, “but now show me regulation in a competitive market” as they rub their lower back in an effort to quell their aches from carrier that goalpost.

And then you point out that those examples are of a competitive market.

Only for them to pull a “gotcha”, because surely it couldn’t be that competitive if it had a cost reducing effect.

The further you entertain, the more they move the goalposts and introduce circular reasoning, because in their mind anything that challenges their worldview must simply not be true.

If you’re coasting to earth in a parachute and someone gives you a cup of coffee to drink which does nothing to change your rate of descent, would you then attribute your descent to the cup of coffee?

You even say it yourself: There’s lots of reasons… but deregulation wasn’t necessarily it especially not in the axiomatic way you say when you say that by “first principles”, regulations increase prices.

E.g., regulations and legislation around marijuana access have decreased prices, the ultimate “price” being a stint in jail for possession.

Also, regulation around marijuana has not decreased prices. This is obvious because in places where marijuana is now decriminalized people still prefer to buy from illegal sellers... because it is cheaper.

Do you have a source for this? I've seen graphs for prices since ~1980, but my search-fu fails to find anything before that.

No, this on its own doesn’t prove anything.

In this era, it was commonplace to fly with only a few passengers aboard. Full flights were rare. Immediately after deregulation, the flights became routinely full.

I.e. the airlines became far more efficient and served the flying public much better.

the benefits to society is in terms of reduced fuel consumption, only because that’s directly aligned with the airline’s profits.

> the benefits to society is in terms of reduced fuel consumption, only because that’s directly aligned with the airline’s profits

Companies don't burn fuel for fun. The fuel is about 40% of the cost of your ticket. Increased fuel efficiency is the major driver of new airline designs.

FTA: "Worse still, without mandated service, cities and regions across the country have lost commercial air service"

It sounds like planes stopped being directed to where customers were and no longer fly to where they wanted to go in many instances. This is not a win for the consumer.

Then there is gonna be a gold rush of airline startups leading to amazing innovation, offers and low prices for consumers. Unless your government intervenes and regulates the market into a monopoly of incumbents, of course.

> Corporations are authoritarian, tyrannical institutions

Corporations are at the mercy of their consumers and investors. They get toppled every day. Remember Nokia? Motorola? IBM? Zoom? Heck even Intel lately?

is not at all the same thing as having a choice.

Yes, because nobody wants to run a business at a loss.

> It sounds like planes stopped being directed to where customers were

You're assuming the airlines are stupid. The fact that the airplanes were often nearly empty under regulation and nearly always full when unregulated is pretty strong evidence they were serving a far larger number of customers.

Which is why some important services (like the post office) shouldn't be run as businesses.

> The fact that the airplanes were often nearly empty under regulation and nearly always full when unregulated is pretty strong evidence they were serving a far larger number of customers.

They are serving a far larger number of customers in areas A and B while now serving zero customers in areas C D E F and G. It might be far better if fewer people in areas A and B could fly if it meant that more people in the other areas could.

Airlines aren't stupid they are just doing everything they can to deliver the least to the public while charging the most they can extract from the public. Also, it isn't as if the changes airlines made to fill up seats couldn't have happened under regulation, or even that they never would have.

> they are just doing everything they can to deliver the least to the public while charging the most they can extract from the public

If you are sure they are gouging and making excessive profits, buy stock in the airlines and get your share.

> it isn't as if the changes airlines made to fill up seats couldn't have happened under regulation, or even that they never would have

They had 40 years to fix it and never did. The airlines fixed it overnight.

Yeah, I suggesting that at the very least it could be, if it means more Americans have access to an airport and airlines served a larger percentage of the country as opposed to only the areas that generated the most profit for them.

> If you are sure they are gouging and making excessive profits, buy stock in the airlines and get your share.

This wouldn't be the worst time. They suffered during the worst of the pandemic but are profitable this year. They'll be looking to claw back the profits they missed too so I expect prices and fees to continue to soar.

This exact kind of logic was why, during communism here in Eastern Europe, we couldn’t find anything in stores: the government in its infinite wisdom was deciding who should build what and how much. Because the greedy companies would’ve built only whatever was profitable for them.

The predictable end-result? We were starving looking at empty shelves, while greedy capitalists in western countries were spoiling the consumer for choice.

Why would it mean that? It obviously didn’t work that way before deregulation and afterwards air travel became much more accessible to more people

How "might" it be "far better" to the public at large for airlines to serve fewer people at a higher cost?

> Airlines aren't stupid they are just doing everything they can to deliver the least to the public while charging the most they can extract from the public.

If they did as you suggest, they'd be demonstrably and measurably delivering FAR less to the public while charging even more money. You're arguing in both directions!

For the same kinds of reasons it's better for the post office to serve people in remote areas at higher cost as opposed to leaving them without service and cut off. The same reasons why it's better for more Americans to have access to broadband, not just the Americans who live in the areas that would make ISPs the most profit. It can be worth it to spend more money when it means providing access to important services to more Americans vs a select few.

> If they did as you suggest, they'd be demonstrably and measurably delivering FAR less to the public while charging even more money.

Which is exactly the case. They ARE delivering less. Less access by only providing service to the locations which give them the most profit. Less leg room so that they can cram more people into every flight. Less service by cutting staff. Giving passengers fewer options/less choice. Allowing less baggage. Flights are increasingly canceled and delayed. Customer satisfaction gets lower and lower all the time. They are giving us less.

They are also charging more and more. Airline tickets are skyrocketing, outpacing inflation. Even as the service airlines provide keeps getting worse and worse, the prices keep getting higher, and higher but there are also the endless bullshit fees for everything they can think of (https://www.elliott.org/on-travel/hidden-airline-fees-are-ev...) which are often hidden.

They are serving far more people at far lower ticket prices than when they were regulated. I.e. deregulation enabled them to put the planes where the people are.

Do you know how much it costs to fly a jetliner? Why does it make sense to you that a 767 should fly into a rural airport to pick up 3 passengers?

These examples are not demonstrative of what you are arguing. If you were to instead propose "closing half of all UPS stores in densely populated cities and reallocating them to rural environments" it would be an apt comparison, and equally illogical.

There is an argument to be had (maybe) about expanded airline access for less populated geos. There is only an asinine argument to be had about doing that at the cost of reduced service for major population centers.

Congress very specifically, by design, does NOT represent the will of the people. It represents the will of land area. Even the part that was originally supposed to be representative of population no longer is due to shenanigans, and also over-represents land instead of people. We probably shouldn’t get into the pros and cons of this system here, but I did want to correct your fundamental misunderstanding.

Check out the 5 year chart of Delta stock. It's gone from $60 to $38. I'm wondering what happened to all that profit you alleged.

https://www.google.com/search?q=delta+airlines+stock

https://www.transportation.gov/policy/aviation-policy/small-...

The airline would go bankrupt, the shareholders would lose their investment, the bondholders would own the new corp, and perhaps the aircraft fleet would get a new livery.

American airline tickets contain a 7.5% excise tax, $5.60 per-trip September 11th fee and another excise tax of $4 per flight segment. (That's in addition to the usual sales, payroll and corporate taxes.) Taking just the former, I'm curious what the net give/take ratio is. Because it might be argued that we run our airlines as an indirect tax on high earners to fund the jobs program that is the TSA.

Yeah, that’s the magic of capitalism. You make society more efficient and get paid for that.

You say that being crammed into planes isn’t a benefit. But the opportunity costs should be taken into account. Every resource not spent on airlines is a resource spent on something else.

capitalism can also be very harmful and inefficient for society. companies draining aquifers and producing tons of disposable plastic bottles to sell people that water for profits is a net negative for modern society. that money should go towards improving our water infrastructure so no one feels that their water is unclean. so much plastic pollution is the result of capitalism too.

It certainly was magical after the fall of communism in Eastern Europe to be able to visit capitalist countries and wonder at the shelves full of products and the countless affordable offers.

Starving under communism on the other hand was not magical at all. We were told incessantly that we were making the world a better place, improving the society unlike the evil capitalism that was destroying everything - but we were starving.

Funny enough the capitalist countries looked better and were less polluted too. Turns out rich societies tend to care more about the environment and invest accordingly too.

you get paid for giving people what they want, not necessarily making society more efficient. It's more profitable to sell a car to everyone than it is to sell them bicycles, even if the latter is "more efficient" in terms of space, mineral and fossil fuel resource usage, pollution, health of users...

and God forbid you just tell people to walk.

I used to work at H&M - getting low quality disposable clothing from Bangladesh isn't "more efficient" then buying a sewing machine and making your own clothing, at least not if you consider transport or environmental costs. But people are lazy, and they're easily bored, and they like "new" looking things, so H&M keeps on selling clothes.

I guess basically what I'm getting at is tragedy of the commons. You let people mindlessly pursue their short term interests, it doesn't necessarily lead to efficient behavior at the aggregate level.

Arguably what has made society more efficient, at least for automobiles, has not been "capitalism", but government regulation - safety, environmental, and cutting down on drunk driving. If you consider "dying en route" to be "inefficient", then you'd agree that while just building nicer looking cars with bigger tailfins to please the market didn't really do much to reduce this inefficiency, government mandating bumpers and seatbelts and airbags did.

But why stop there?! Cultivate your own cotton, make your own cloth. Mine and smelt your own iron. Cut the woods and build your tools, then build your sewing needles from scratch.

Funny enough during communism here it was close to impossible to find modern sewing machines - they were the product of the evil capitalist countries, of course. So the old foot-operated Singers were selling at quite the premium.

And yes, we did walk quite a lot - car production and gas distribution in a planned economy meant tens of years of waiting lists.

It might not be more efficient environmentally but it’s certainly more efficient economically (from the perspective of consumers in rich countries)

My recent experience with international flights indicates that business class is 5x of the premium economy seats, which are 1.5x already

If you were to buy the cheapest (non-flexible) business class fare many months in advance, you might well get it for significantly less than a flexible economy fare sold one week before departure.

Also note that airlines price on origin and destination, indirect (connecting) flights typically cost less than direct, so if you want to fly from London to New York, in business class, it's almost certainly going to be cheaper to fly somewhere else and to start your journey (and fare) from there, and fly _via London_ to NYC. Specifically you'd fly first to Dublin (or Oslo, or Budapest, or ...), then turn around and fly DUB/OSL/BUD-LON-NYC-LON-DUB/OSL/BUD.

Airline pricing can be very, very counter-intuitive to the uninitiated.

(Source: have paid for 20+ business class flights in the last 12 months, none of which were what I'd call expensive, as I despite being a miles collector I am fairly price sensitive. Just as happy to fly with Ryanair or Easyjet when value for money is to be found there)

> However, traders may still set different net sale prices in different points of sale, such as shops and websites, or may target specific offers only to a specific territory within a Member State. Under EU rules, all these offers must be accessible for consumers from other EU countries.

They are not allowed to redirect you without your consent, and you must also be able to change location at any time.

>Where a trader has several country versions of the same website, such as a webshop selling products to different countries across the EU, you should be able to choose to view which version you visit. You must give your permission to be redirected to a specific country version of the website. You should also be able to change your choice at any time.

https://europa.eu/youreurope/citizens/consumers/unfair-treat...

> However, there is no possible justification for differences in access to goods or services for customers from different EU countries in the following three situations:

> sale of goods without physical delivery – for example, if you buy something online that you will collect from a shop, rather than have it delivered to your home

> sale of electronically supplied services (excluding copyright protected content) – such as cloud computing services, or website hosting

> sale of services provided in a specific location – for example hotel bookings, car hire, tickets for entry to theme parks

I haven't yet figured out what the exact logic is behind this and when it applies; it's just been my personal experience.

I think the biggest problem with the terminology is that domestic (US) First is often hardly comparable to international Business Class, but more like European regional Business, which is more often than not just the lack of a middle seat.

The large US airlines even have different terms for their international Business offerings: United Polaris, American Flagship, and Delta One.

I will grant you heavy regulation of the 1970s was a price inefficiency. But I'd need some representation of cartel market/regulatory capture price inefficiency of the current situation to compare. I suspect it isn't that much.

Fuel costs are probably higher, but engine and plane design efficiencies should have overcome that. IT should be a huge amount of efficiency in operations, at least 20% of the former cost. Then we look at how worse service is now and how much more cramming / leg room reduction, fees, etc. I'd have to know if you "ticket costs half in real dollars" figure includes basic "user fees" or not.

Here's Robert Reich on airline travel:

https://www.youtube.com/watch?v=eTzaMXXelew

Yes, the liberals favority economist. But I agree with his fundamental arguments about modern air travel and the oligarchical / cartel nature of virtually all of our markets for goods and services.

I doubt anyone who has worked as a programmer in the industry, myself included, would say that IT is hugely more efficient. The majority of the commercial passenger airline industry still revolves around Sabre: created in 1960 by American Airlines and still, to this day, unable to handle text with diacritics or non-roman alphabets. Everything is wrappers and layers around Sabre, and Sabre charges for every transaction.

In an efficient market, Sabre would have disappeared after deregulation. Instead, more and more airlines signed on.

Isn't each individual airline is itself a command economy, internally? Many large companies manage their assets centrally, for example Kroger or any other large grocery chain manages itself via central planning. Would they function more profitably if individual store managers were bidding to "purchase" groceries from the central supplier? The only datapoint I know of is Sears, which tried something similar and went down in flames

Yes. The difference is that an "airline command economy" collapsing from incompetence is an uneventful bankruptcy, and a national command economy collapsing means civil war and anarchy.

Although sometimes I imaged UBI to instead enhance free market because it allows every person to contribute to the competition and can still fail gracefully. Instead poor person is now also "too big to fall" because they're betting their livelihood for each proposal.

The difference is that airlines, no matter how large they are, have to deal with the reality via market forces. So there's a feedback mechanism that will eventually point out if your commands are correct.

Command economies (or sectors of economies) don't have such a mechanism, so they can stay inefficient forever.

I would argue that the energy sector of most developed nations as a counterexample. I think we can go back and forth all day about the extent to which they are true command economies, but the ultimate point that natural monopolies can and often are successfully managed by nations in a centrally-planned manner I think is clear.

Europe and the US are most definitely not counter-examples. Power generation is almost everywhere done commercially. Transmission is more often publicly owned, but even that is not universal.

The closest example to the command economy is rail in Europe. And it's predictably struggling.

Private corporate ownership and central planning are not mutually exclusive. Texas is maybe the only place in the US where energy production isn't centrally planned, for any reasonably local definition of "central."

Correct. For example, the government is not saying that Duke must put ten gas power plants in a particular location for $10 by 2025.

> That each section of its business is in some sort of free market?

Funnily enough, this is pretty close to how Duke operates. The central holding company only deals with the strategic planning, and its subsidiaries make their own plans to implement these plans.

But anyway, even in the areas where Duke has a legal monopoly, it has to contend with other utilities, otherwise its monopoly will end.

> Private corporate ownership and central planning are not mutually exclusive.

They are. Central planning from the government means that there's no meaning in private ownership. Centrally planned industries are not affected by the market forces, so they can become inefficient without the market feedback.

Central goal setting is fine, but not planning.

If you require central planning to retain an element of planning by the government in your definition, then I agree, energy is not a good example of this.

Perhaps, but in competition with others. Governments compete too, but the cost of switching brands is inordinately high, so the competition there is too weak to generate better results among the various governments.

Most of the "natural monopolies" we have were created directly as such by governments.

Electric utilities? There used to be competition. Idk what happened exactly, but then we had no competition and they were regulated.

Public transportation? New York's subways (90% of existing track!) were built by two competing companies, then NYC regulated them into bankruptcy, and then NYC acquired them. Similarly with busses and trolleys. There used to be a vibrant trolley system in New York, then the city killed it and "nationalized" it. Compare to Buenos Aires, where they never nationalized the bus system, and which has a privately operated bus system that is the envy of every American city!

Cable systems also had competition, but then all the towns regulated them.

If Edison and Westinghouse could compete a century ago, they could compete today.

Roads are pretty much the main case where I'd agree there's a natural monopoly, and then only because there's not enough physical surface space for competition.

In any case, airlines are far far from natural monopolies. Airports might be, but not airlines.

The power grid is another classic example of a natural monopoly, it costs a lot to make a power plant and hang a bunch of wires, but once it's running it's basically free to send a small unit of additional power to a person. For this reason the US was going to nationalize the grid back in the 20s but at the last minute decided to lease to a "regulated monopoly" private corp (IIRC it was some dude in Chicago who convinced them to give him the lease). Texas tried to roll this back in the like the 90s and their power costs shot through the roof and still remain nationally high.

I'm curious why folks think the failure of command economies in the pre-digital era carries any weight today. We have orders of magnitude more data today, and I feel like it should (theoretically) be possible to use that data to optimize for things other than maximal profit.

If you say "I can take two checked bags, it's included in the fare", I'll probably only take one because I only need one for the duration of my trip. But I'll feel good knowing if I decide I see something awesome while on my vacation, I can take it home without too much care for penalty fees.

But if you say "Each checked bag is $50", people will pack everything up to and including an entire 1996 Toyota Corolla into their free carry-ons, exhaust the available space, and the airline has to say to the economy class late-boarding group 'everyone after this line has to check their bag anyway, but we won't charge you the $50."

As an added plus, the price awareness reduces the quality of the travel experience-- you end up asking "can I fit another souvenir in my little free bag", and often deciding against it, because it's insanity to spend $50 in bag fees for a $10 book.

Either the market has an endless appetite for banking or capitalism does not in the end deliver what markets want.

I don’t like it but I think it’s clear this is the case. The demand for “buy now, pay later” seems to be huge, even if it costs more in the end, even for seemingly trivial amounts of money for regular purchases. But I really have no idea how much things like affirm on Amazon actually get used, maybe no one else is using it either.

It may be cute to say “X is a bank”, but an airline is not a bank. Besides the obvious facts that you cannot withdraw money from an account or pay your bills, if they didn’t fly planes the points would be ~worthless.

The fact that they don’t profit from those activities is a market economy working as intended*. Cars and flights are easily substitutable goods, you’d expect to see the profit competed down to ~nothing.

*Arguably there is getting to be too much consolidation in the airline industry, and also legal limits on airport gates act as a huge barrier of entry for new competition.

(edited for clarity)

To do the "actually send passengers from LAX to ORD" part of running an airline you have to pay for pilots, gate agents, planes, the world's smallest cups of flat ginger ale...

But shuffling around frequent flyer miles as a psuedo-currency? No actual tangible expenses there, just some obligations that end up on some future quarter's balance sheet.

The top 10% holds 69%.

https://www.stlouisfed.org/institute-for-economic-equity/the...

A young doctor with $100k in med school loan debt is part of that “bottom 50%” of wealth but nonetheless an extremely attractive target for “the market”.

In a healthy competitive market, they're also reactive to customer desires, but when they're presented with the opportunity to decrease competition through consolidation or other means, it's blatantly obvious where their true loyalties lie.

This is easily and provably false. A single-digit percentage of households holds over well over half the wealth.

Not sure how that breaks down.

If you want to make money from the middle class, you have to do better at something than whoever is doing it now.

If you want to make money from the rich, you just have to dream up some new twist on their wants (sure, it has to be executed reasonably well, but you're not competing in the same way).

So sure, most of the money that changes hands does so via the daily/weekly/monthly spending of regular people. But that's not where the big money is unless you come up with a truly mass market new thing. The big money is in providing for the wants of the rich, because the marginal utility of what they spend on wants is so low to them.

Markets care about "aggregate demand". Rich people can be lucrative individual customers because they have more to spend and often less price sensitivity. But they have limited capacity for consumption in many areas; they only eat three meals a day and only fill so many airline seats at once. The middle class and even lower classes have much higher capacity for consumption and are worth targeting - think McDonald's or even Google (advertisers want all the eyeballs they can get, even if they prefer wealthy ones)

There's a great deal of inefficiency in our current system as well, though.

I suppose I'm talking more about the "how much grain should we grow this year" sorts of questions that the Soviet Union failed at. It's almost certainly impossible with early 20th century tech, but with modern computing it seems like it might be more efficient to solve by one party with great resources, rather than by many parties with more primitive predictive tools.

When it comes to the discussion at hand, transportation infrastructure is one of the few areas that's inarguably more efficient when centrally conducted, which is why our roads and subways are government-operated, and why the airlines have an insatiable desire to consolidate.

I'm not sure what technology we have now that the Soviets didn't have that would allow for successful central planning of agriculture. Local boots-on-the-ground conditions vary so much, even from one end of the field to another.

That aside, even if we had technology sufficiently advanced so as to be indistinguishable from magic, there's the other great problem that central planning couldn't overcome, which is the problem of human nature and incentives. Many parties with primitive tools who have a direct incentive that their crop is bountiful will beat out the one central party with great resources that nevertheless lacks skin in the game.

Excellent point.

The incentives to innovate in ways that actually benefit people are weak in our system, because the disincentives to innovate in ways that just make you a bit wealthier are small to non-existent.

https://stockanalysis.com/ipos/2023/

A modern digital command economy wouldn't have price signals, but even if it did it wouldn't make decisions like the individuals would precisely because the point of a command economy is to deny individuals freedom. And that is a reason that digital command economies wouldn't have price signals: there's little point when the point of the command economy is to ignore those price signals.

This is an unsupported generalization. Command systems exist to mandate production and distribution of goods, e.g. to ensure sufficient food production and equitable food distribution. They eliminate the "overhead" of competition and the need for marketing. Look at any self-sufficient commune and tell me their internal economy has anything to do with imposing limits on freedom. Don't let your negative feelings toward certain historical examples cloud your understanding of the matter at hand.

Furthermore, nobody said anything about working hard.

Surely you're not about to claim that all pre-colonial civilizations with functional governments either somehow had free market incentives or collapsed into famine.

"There have never been X" is always an extraordinary claim and you've done a poor job making it.

> This is an unsupported generalization. Command systems exist to mandate production and distribution of goods [...]

This is exactly denying individuals freedom. It's right there in the word "mandate". If you want to produce some thing or service at some price, you don't get to unless that's what the planners want. If you don't want to produce some thing or service at some price, you may be forced to by the planners. You don't have freedom of agency, and you can't have freedom of agency, in a planned economy.

> I have command of the X-economy and can mandate the production and distribution of these goods

> The intended point of all this is somehow to deny individuals their freedom to fail to create an X factory, rather than to ensure that X gets created and distributed at all

What if there is no profit? What if I operate at 100% loss, year after year, propped up by the subsidy of a fiat currency, to provide something everyone needs, and don't think the goods and services which sustain life should come at any cost? I am overwhelmingly popular. Nobody is going to seriously compete with me, although they're free to try. Nobody is forced to work for me. Whose freedom have I limited? Doesn't this sound like a lot of things we take for granted every day which are centrally planned?

But I hope you sleep well! It's crucial for proper brain function.

There it is. "Unsupported generalization", followed by your own generalization that amounts to the same. I did point it out above.

In any case, your statement still fails to hold water. Consider the ISS: there is central planning and command of the entire economy of the vessel, from its air, water, and food to its electricity and the time of the astronauts themselves. But the 'point' of this command economy is not to limit freedom; it is to keep the astronauts alive. This is the most extreme example, but obviously there are other situations (ships at sea, camping trips with a group, military operations) where centralized control of the goods produced and services performed serve the goods of the group's goals, and have nothing to do with intentional limits on freedom.

It's not just claiming I made an unsupported generalization and then making one, it's the the one you made was the same as the one you claimed I was making! Strictly speaking it's not a contradiction, I suppose, but if you did it unthinkingly then I think calling it a contradiction is fair. Though if you want to call yourself a hypocrite, don't let me stop you!

(EDIT: Ah, you weren't contradicting yourself. You were agreeing with my "unsupported generalization"! Heh.)

As for the ISS, it's not exactly comparable to the subject in this thread (airlines) in scale. The ISS is the only destination for the "airlines" that service it, and there's only two of those "airlines", and they both fly very rarely, and the passengers are 99% not tourists. Nor is there much of a business in sending tourists to space at this time. But if ever there is such a business, it will be because companies like SpaceX and Blue Origin make it so, not because the government "regulated" space travel before "like airlines". The comparison is not apt is just not apt.

As to central planning reducing freedom, that is most certainly true, though if a government imposes central planning only for a very small part of the economy, then the reduction in freedom is not very great and maybe barely noticeable. At the limit central planning definitely eliminates a lot of individual freedom. We've seen this many times with Soviet communism, Cuban communism, Eastern European communism, Chinese communism, East Asian communism, etc. They don't just eliminate much individual freedom -- they kill a lot of people on purpose, and then even more via famines caused by their vaunted central planning.

You said, "the point of a command economy is to reduce individuals freedom." I have provided numerous arguments that a command economy could serve another purpose -- survival in extremis, provision of public goods at a loss, and creation of a communal sense of obligation.

I made no argument about the specific context of this thread. I made no argument that it does not decrease individual freedom. It does, as does any situation where the principal decision maker and executive agent are not the same person. But that is not always the purpose. Your inability to understand your own words and their implications astounds me.

> command economies have occasionally produced innovations by throwing enormous resources at particular problems, but for the most part they are stuck with copying innovations from free market economies.

Hmm. This seems unfair to the military during wartime? WW1 feels like a huge example.of advancement driven from very command-ey institutions; from the idea of the tank to deal with machine guns and barbed wire to nitrogen-ating fertilizer in Germany to withstand the British blockade. (Never mind DARPA and the internet or the moon missions during the Cold War, or the Manhattan Project)

(Yeesh, not that I'm suggesting it would be preferable to pursue this as a full-time model - it's literally fascism, but it's important to understand why these systems were pursued in the first place - the point is that there do at least appear to be high profile success stories)

The whole point of regulation was to keep prices up so the airlines wouldn't implode like rail did. It was not meant to keep prices down.

So when we got rid of airline regulation, prices went down. Some airlines did implode, but not as badly as rail did.

Thankfully for airlines, it seems flying is a lot more indispensable than riding by rail.

Rail in the US died because US cities are far enough apart that flying made a noticeable difference in travel times, unlike more compact countries. There's a reason Amtrak only works well in the relatively dense northeastern seaboard of the US.

That said, the airline industry is one where competition seems to be working pretty well. It's a market success story. The most efficient market is one where everybody is making close to 0 profit, and that's a good description of the airline industry in the past few decades, especially when you focus on the relatively small part of the airline industry that deals with flying planes and their passengers.

More like air routes are a lot cheaper to change than rails. Nor do air routes cost millions of dollars per-mile to build.

And yes, jetliners are several times faster than trains, even bullet trains, and since rail networks are orders of magnitude more expensive than airline networks... The whole thing adds up to air travel being much much much cheaper and more convenient than rail with relatively few exceptions involving high population densities.

I think a big aspect of this is that railway workers were much more unionized than airline ones. So what better way to kill the unions than to kill the industry.

I would say that it demonstrates that, where competition exists, deregulation can achieve some pretty good results. It's worth noting that consumers can choose which airline to fly every time they fly and the cost of switching is non-existent (absent loyalty programs which is why they're called loyalty programs).

It's also worth noting that since airlines are pretty critical infrastructure, when there's an economic downturn and the government bails them out, the government is essentially subsidising the discounts of the previous 10 years and generally doesn't do it for the very small airlines that aren't too big to fail so it's also still a bit government-ish.

It wasn't fully deregulated and left alone, some aspects were deregulated. As usual people like to bucket government policy as black and white but in reality it's usually somewhere in the middle.

[1] https://www.transportation.gov/policy/aviation-policy/small-...

It’s a miracle that airlines are as functional as they are. People REALLY like flying.

I've certainly had a few airline experience that ended in my wishing I had just driven from A to B because delays and the general inconvenience of it all meant that it would have been faster AND cheaper to drive, but of course we didn't know that when we booked the flight.

It's more that the government subsidizes their lack of resiliency in a back-handed way. This might not be so bad because markets are usually short-sighted and fail at this, so the only way for it to exist in a market system is for the government to pay for it. This is what the Farm Bill does. It subsidizes food production because people starve when markets are too efficient.

A lot worse. So bad that while I love to fly, I hate to fly on commercial airlines and avoid it when at all possible. Especially post-9/11.

Some of the issues are mitigated by flying first class, but even that only makes it a bit more tolerable, but not enough to be worth the increased airfare.

It's REALLY hard to compare anything 1973 vs 2023 as there are way more factors in play than just "oh it was X then and is Y now"

Can anybody think of an industry where government ownership leads to more efficiency and lower prices (including the amount the government pays)?

One argument I've heard in favor of government-owned industry is for things that must be more or less guaranteed for everybody, regardless of capital.

Drinking water, postal service, election management, and violence (police, national guard, military) come to mind.

Those examples might be more efficient and affordable if privatized, but then it might be expensive or unreliable to get mail in Alaska, or there might be lawlessness near parts of the Mexican border, or elections might be fraudulent in some districts.

Throwing tax dollars, laws, and bureaucracy at these things doesn't necessarily improve them, but maybe it raises the bottom, at considerable cost.

Huh?

airline deregulation != command economies

airline deregulation == free market

This statement sounds like it should read: "airline deregulation shows just how bad laissez-faire economies are at planning and allocating resources"

The problem isn't deregulation, it's preserving competition.

An apples to apples comparison with equivalent legroom etc a domestic flight in 1970 was often cheaper than what people see today. The cheapest thickets on long haul flights have fallen significantly, but that’s also where technology has made the greatest strides with more efficient engines requiring less fuel and thus less weight which increases efficiency which then compounds on longer trips.

And this improved technology was an inevitable, foregone conclusion?

People make arguments like this as if it was some passive thing, as opposed to thousands if not millions of conscious decisions to improve turbines, airframes, and myriad other technologies, then actually implement them in real aircraft, then acquire and deploy a commercial fleet.

People made these decisions because they were incentivized to trade time and money today for material improvements tomorrow. Why do you think that might have been?

Hint: think about industries where there isn't much competition. Do we see similar improvements there, usually?

As to improvements without competition, it’s surprisingly common. AT&T was a huge hotbed of technical innovation when they were a monopoly from ever improving switches and fiber optics etc but they even produced one of the first commercial Unix System V.

Monopolies often spend huge sums on R&D outside of their core business. Google’s self driving car is exactly the kind of investment you see when companies have more money than they know what to do with. Xerox for example developed the desktop UI mouse included when they held a huge monopoly, not that it helped them but it did push the industry forward quite a bit.

Your primary care physician is in a competitive market yet presumably still makes appointments over the phone rather than allowing people to schedule online. Such technology has existed for decades and some doctors let you, but adoption is still slow.

AT&T was hardly the only phone company in that time period, people just didn’t really care. Phones just cost a lot and spending more to have buttons just wasn’t considered worth it.

Even into 1982 most people were still renting their phones from the phone company: “Some resistance to buying phones might be evident in the response to the sale offers made in New York, California and Oregon. In New York, those who now rent a plain rotary dial phone pay $3.03 a month and have the option of buying it for $35, which means that the phone would pay for itself in reduced bills in one year. The return on some other models is even faster.

Yet New York Telephone has sold only 400,000 to 500,000 of the 5.5 million phones it has placed in homes, according to Paul D. Covill, New York Telephone's vice president of marketing.” https://www.nytimes.com/1982/12/16/business/new-era-for-the-...

Only 78% of US households even had a phone in 1960, jumping to 90% in 1970, and that was unusually high compared to the rest of the world.

Exactly! You had to. 1982 is a very relevant year, the last year before AT&T was broken up. People did want to own their phones, and they wanted choice, and they wanted fun weird phones, or cheap phones, or whatever. Monopoly quashed that.

From 1960 -> 1980 phones barely changed. Compare that to the changes from

It seems strange today that people would rent phones, but they used to be very expensive items even outside the US. The practice ended because prices fell so far not because people’s preferences changed.

As if prices aren't a part of preference? As if innovation isn't lowering costs? That alone torpedoes your claim - why wasn't AT&T innovating on lowering prices? Obviously because they were a monopoly and how no incentive.

What you you may not know, is that people didn't switch from renting to buying the same boring phones, the market exploded with phone options. Where was the AT&T cordless phone pre-1982?

> think about industries where there isn't much competition. Do we see similar improvements there, usually?

I can't think of an industry without competition where said industry doesn't try to improve their product or production for more profit. Maybe something in the medical space that I'm unaware of, but this definitely doesn't fly for aviation or transportation in general.

Precisely because those fields are in a high economic (and consequently technology) competition, you see innovation as you noted. The parent comment is that you cannot throw away the competition and still expect innovations to happen.

Had deregulation not happened for airlines in the 70's, why would we expect that they wouldn't innovate to produce less expensive and more reliable aircraft? Any sort of improvements there makes a bigger profit and avoids killing customers (also pretty good for profit).

Seoul and Tokyo have the most extensive subway systems in the world. Both have both privately owned and de facto government-owned lines through government business entity. The innovation here is connecting key areas in the city. The new lines that connect new city centers that emerged are privately owned; they care about profit and they are incentivized to provide popular, convenient services by connecting new city centers. Also, there are other innovations like self-driving trains in those private lines (see Shinbundang Line, the newest in Seoul). A government line with legally guaranteed profit is less poised to innovate although some innovations happen due to popular demands or government initiatives.

It's not that government-led projects have zero innovations, but they tend to have less momentum than well-motivated well-aligned private corporations. Well-aligned (with the public's interest) is the key here.

I don't know if particular examples prove anything, but you asked for examples, and here it is. We do have decades of economic research that competition generally leads to innovation in services and technology.

You didn’t even bother to argue against the points raised by the article itself, which goes as far as to say that the benefits you attribute to deregulation hasn’t occurred beyond the first few years after deregulation.

> Deregulation even failed to deliver the one thing it is sometimes credited with: lowering prices. Airfare did get cheaper in the years after the 1978 deregulation law. But the cost of flying had already been falling before deregulation, and it kept falling after at about the same rate.

Writing this demonstrates you don't know what you're talking about. Plenty of people would happily pay double for a first-class seat but that's not nearly enough. At best paying double gets you into premium economy.

Most domestic (USA) first class tickets are 3-5x the cost of an economy ticket. For international flights, business tends to be 3x and first class is something like 7x-10x.