Another Pilot Error

by Don Boudreaux on May 19, 2014

in Competition, Crony Capitalism, Innovation, Trade

Here’s a letter to USA Today:

Air Line Pilots Association president Lee Moak opposes Norwegian Air International’s effort to operate in the U.S. (“Why the U.S. must deny NAI,” May 19).

Overlook Mr. Moak’s mistaken assumption that foreign competition is harmful if it destroys domestic jobs.  Focus instead on his report that the ocean-freight industry “employed in 1960 more than 100,000 people here but less than 2,500 today.”  True.  But contrary to Mr. Moak’s claim, this fact does not support his call to block foreign rivals today from competing for U.S. air passengers.  The reason is that the vast majority of those maritime jobs were destroyed not by foreign competition but by technological improvements – most notably, the advent of container shipping.  The results are impressive.  Not only has the tonnage of freight shipped into and out of U.S. ports more than quadrupled since 1960, but the average amount of freight handled annually by each U.S. maritime worker has skyrocketed from 3,393 tons in 1960 to 591,840 tons today.*

If Mr. Moak really wants to protect employment in the U.S. aviation industry, he should ignore the relatively small effects of foreign competition and instead spend his time trying to prohibit the use of jumbo jets.  Indeed, if he is correct in his assumption that economic forces are to be judged by how many jobs they create, Mr. Moak should demand legislation that prohibits commercial airlines from having any planes in their fleets larger than, say, the 37-seat Embraer 135.  Think of all the piloting jobs we’d have then!

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030

* Calculated from data found here.

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