Sometime in the early 1970s, when I was 12 or 13 years old, amazing news swept through my family: Uncle Malcolm was going to fly to a business meeting in Baltimore. I’d never known anyone who flew commercially, so this development struck me as stupendous. And stupendous it was.
To see Uncle Malcolm off from the airport on his exotic journey were my parents, my three siblings and me, my maternal grandparents, and my Uncle Eddie with his wife and two daughters. An entire clan gathered at the airport just to watch Uncle Malcolm board the plane. (This was long before non-passengers were prohibited from going through security.)
I remember it well. It was a nighttime flight. I stood at the airport-terminal window looking out at the nose of the big jetliner that Uncle Malcolm had just boarded, envying him for doing something that I’d never done and had no reason to think that I would ever do. Standing next to me, gazing at the plane, was my Uncle Eddie.
“I hope,” I told him without much real hope, “that one day I’ll get to fly in an airplane.”
“I bet you will one day,” Uncle Eddie replied kindly, although with how much sincerity I cannot say.
…..
Here’s the view from 30,000 feet. When producers are allowed to compete on all margins, including price, they discover the optimal mix of prices and amenities that best satisfy their customers. When governments obstruct that competition, it gets redirected into changing the quality of goods and services such that the resulting price-quality mixes are less desirable than would be the mixes that emerge without government intervention.
After airlines were deregulated almost 50 years ago, consumers revealed that they wanted lower prices with less quality. And by more recently rejecting the bare service offered by Spirit Airlines, consumers revealed that quality can be so low that even very low prices are insufficient compensation to put up with such low quality. These results emerged from competitive market processes and deserve respect. But alas, just as airline regulation forced American air passengers to buy what they would have preferred not to buy, the government’s continuing itch to override market processes will oblige consumers in the future — whenever such interventions occur — to suffer worse economic outcomes.
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