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Fair Game for Regulation? September 16, 2007

Posted by federalist in Government Regulation, Transportation.
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James Surowiecki does a decent job of trying to deflate the libertarian dream. I was reading his recent New Yorker essay on commercial aviation and began to wonder whether we must acquiesce in government interference in certain large markets.

I can think of two major reasons commercial aviation may not be suitable for free market operation — i.e., operation without government regulatory interference. However, both of these causes are themselves the product of government involvement in the industry.

The larger of the two is Air Traffic Control. All jet aircraft are subject to the air traffic control system. The sky is a public commons, but nobody is willing to let people put a metal missile up there flying near the speed of sound without a reasonable system for avoiding collisions with other sky users. Until recently, the only practical solution to this problem was a common ground-based air traffic control network. The ATC system is ridiculously inefficient, but it meets the standards of safety demanded by the public.

If the ATC problem were attacked today any number of private industry organizations could solve it with decentralized, economical, and efficient technology. (I recently saw just one such example, called ADS-B, on trial in Alaska.)

The second problem is security, which I have previously discussed, and for which I have proposed a generalized framework for resolving.

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