Objective statistics which apparently demonstrate the “need” for more service — the numbers of planes landing and taking off per hour, their waiting time in the air or on the ground, etc. — are completely misleading.
The average commercial airliner in the United States flies with half its seats empty — which means that only half as many flights would be needed to transport the same number of passengers in existing planes. Actually, less than that would be needed, since (1) planes idled by more effective scheduling would tend to be the smaller planes, (2) future planes would average larger sizes if landing fees rose by the larger amounts reflecting the true economic cost of using major airports. Small private planes would have financial incentives to land at smaller airports, rather than add to the congestion at major airports serving a large volume of commercial air traffic. In short, under prices reflecting cost, the number of flights “needed” in the major urban airports would be less, with less noise to destroy millions of dollars worth of residential property values in the vicinity of airports, and less “need” to confiscate more of such property to expand airport facilities.
The pattern of overuse through underpricing — including zero prices for many government services — is not a case of “irrationality.” Its pervasiveness among the most diverse products and services, from airports to stamps, suggests a
Some idea of the complications insulating regulatory agencies from feedback from the affected public may be suggested by the fact that specialists studying federal regulatory agencies “cannot even agree on the number” of such agencies, although “it is thought to be over 100.”28 A senator critical of regulatory commissions claims that simple “common sense” is “rare” in many of them, and then characterizes them as “undemocratic, insulated, and mysterious to all but a few bureaucrats and lawyers.”29 Such criticism misses the point that the agencies’ own interests could hardly be better served than by being so incomprehensible to outsiders that even a United States senator with a staff at his disposal cannot find out precisely how many such agencies there are, much less exercise effective legislative oversight over their activities. The costs of regulation to the public — that is, its uneconomic effects as well as its administrative costs — have been estimated by the U.S. General Accounting Office at about $60 billion per year30 — about $1000 for every family in the United States. The regulatory decisions which impose such costs may seem to lack “common sense” as public policy, but such decisions often make perfect sense from the regulatory commission’s own viewpoint — especially in favoring such incumbent special interests as have enough at stake to pay the high knowledge costs of continuously monitoring a given agency’s activities.
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