Long, but worth reading. Makes some good points on why the FAA is far more liberal than most think.
While government regulation has brought about several efficiency problems in the airline industry, nothing has raised more doubts about the FAA's ability to insure aviation safety as the recent air attacks of September 11th. People flying on airlines want to obtain services that are safe and have dependable quality. Consumers would like to have advanced assurance of quality and safety, but can the FAA provide regulations that assure quality-and-safety in the industry with a top-down bureaucratic style (Klein 1998)? Obviously, based upon the events of September 11, the evidence indicates that the current system has major flaws in it and that providing safety assurance is uncertain. One of the major problems is that both the airlines and the FAA are responsible for providing safety. The airlines can blame the FAA and say that they were only following the orders, and the FAA can blame the airlines for not enforcing their regulations well enough. When everyone is in charge of security and safety, it often means that no one is in charge of security and safety (Hudgins 2001).
The airlines failed to prevent the attacks of September 11th because the FAA does not allow them to protect their property except in federally approved ways. Box cutters were the most deadly weapons on the planes used in the attacks that day because the FAA prohibited the pilots from arming themselves. As a result, the hijackers were easily able to commandeer the aircraft. If the pilots or crew had access to superior weapons, then they could have used them to exercise the force necessary to protect their lives and the airlines' property. However, "Title 14, Code of Federal Regulations, Part 108.11 only allows armed planes with the approval of the FAA" (Tucker 2001). Because the FAA has not allowed guns on planes since the end of Nixon's sky marshal program in 1973, airplanes have been susceptible to hijackings for years. Again, the basic knowledge problem of the central planner accounts for the FAA's failure to adequately provide for safety. The FAA administrator, Jane Garvey reported to the New York Times (September 25, 2001) that guns on planes were not even considered or never would have been before the attacks of September 11 (Tucker 2001).
Institutional changes need to be made in order to provide better incentives for security liability (Poole and Butler 2001). The airports, which are government owned, need to be privatized and put in charge of their own security. This has been done in several other countries where the airports are legally liable for any security lapses (Hudgins 2001). This would create a vested interest for airports to provide the best security possible because they would be financially liable for their failures. Airports would have an incentive to hire innovative firms that would provide more efficient and effective forms of security (Murphy 2001). Because of the basic knowledge problem, we do not know what the best security measures are for airports. However, we do know that they can become known more readily through the competitive entrepreneurial-discover process (Kirzner 1992).
The problem with the industry today is that the FAA is getting more involved in aviation safety and security instead of less involved. The FAA responsibility for the safety problems in the industry stems from its monopoly over the air traffic control system and from its commitment to a perimeter security system at the airports and to its weapons policy on aircraft. Government-imposed monopolies only assure resistance to innovation while maintaining what are essentially inefficient operation methods. The reason why the ATC system compromises safety and security is the same reason why it is operationally inefficient. The ATC system has been the source of safety hazard for years. The ATC system currently uses archaic radar and 1960's mainframe computers that run on vacuum tubes. The equipment is so antiquated and prone to failure that the FAA has to preserve safety margins by "artificially increasing the spacing between flights, imposing ground holds, and using other techniques that reduce system capacity" (Poole 2001). The obsolete ATC equipment, along with the increase in air traffic since 1978, has been the source for a growing trend of collisions and near misses on runways (McKenzie 2001). The FAA's monopoly of the ATC system has tended to undermine the safety of all those who are involved in air travel.
In addition to the safety and security problems arising due to the ATC system, the FAA is also undermining safety by promoting a perimeter shield at airports and obfuscating issues of liability. In a free market situation, consumers would not have to keep up with the safety records of airlines. The airlines' insurance providers, the ones with the most liability, would have a vested interest in monitoring their clients. Insurance companies would have to check to make sure that the airlines kept up with their safety standards. If certain airlines did not do so, then they would consequently suffer direct financial penalties in the form of larger insurance premiums (Murphy 2001). The FAA has no financial liability in the airlines and cannot provide the best safety standards for this reason. Wildavsky (1988) put the matter this way: "Safety results from a process of discovery. Attempting to short-circuit this competitive, evolutionary, trial and error process by wishing the end - safety - without providing the means - decentralized search - is bound to be self-defeating" (288). Since the FAA does not have the profit incentive, nor is it held liable for failure, its safety and security programs will be destine to fall far short of those likely to be adopted by private institutions (Klein 2001).
Clearly, there are also several problems associated with incorporating passenger screening into a federal bureaucracy. First, federalizing passenger screening does nothing about regulating the access to the rest of the airport by private employees of the airport. Federal investigators have been known to be able to get around the perimeter security of airports and onto the tarmac one out of three times in the past. Second, under a federal civil-service bureaucracy, the ability to attract and keep competent workers is limited as well as the ability to incorporate new technology. Even if new technology can be incorporated, it is difficult to fire civil workers whose jobs would be eliminated by that technology. Third, under the federal government's one-size-fits-all security plan it will be difficult to accommodate all airports because of their varying sizes and designs (Poole 2001). Most of all, central planning will most assuredly fail to provide the best security system because of the basic knowledge problem the central planner faces (Kirzner 1992). The recent federalization of airport security under the FAA will turn out to be a new source of compromised safety and efficiency in the industry. The current plan of the U.S. government is to federalize passenger-screening operations and to employ a perimeter security strategy like the one that failed on September 11th. The only difference is that the new system will be more thoroughly owned and operated by the federal government. Hence, it will be even more bureaucratic. The government's one line of defense is to protect the "outer ring" of the airports before travelers get to their gates. Once travelers pass through metal detectors and their baggage clears the X-ray machines, they are considered to be in a "weapons-free zone" and "safe" inside the perimeter. Each traveler who passes through the perimeter is assumed to be a potential hijacker and treated equally under this system. Treating everyone as a potential terrorist makes perimeter security tremendously inefficient in terms of the time and money it takes to provide daily enforcement. The FAA's elimination of curbside check-ins and the assignment of equal marginal risk to each traveler will also do nothing to increase the chances of catching a potential terrorist (Anderson 2001).
The airports and airlines should be able to enter voluntary contracts that determine who is liable in the case of security lapses. When private firms determine that on their own accord, insurance companies can underwrite the contracted liabilities. Both the airports and the airlines would have to provide an adequate amount of safety and security based on the requirements of the insurance companies. The airports and airlines would either have to hire firms to provide these safety and security measures or provide it themselves. Consumers would not have to worry about quality and safety assurances because the insurance companies would have a vested interest in making sure that certain standards were being met. The airports and airlines would have a vested interest in providing quality safety because the underwriters of the risk would penalize them financially in the form of higher insurance premiums if they did not do so. Competition and the entrepreneurial-discovery process in the free market would drive all the firms involved to provide the most effective and efficient safety measures at the lowest cost to the consumer. However, since the FAA mandates the imposition of its own safety and security system and is not financially liable for its failure, there is little likelihood that its system will either be safe or secure. The FAA has no real incentive to change its plan even in the face of overwhelming evidence that it failed. In fact, the perverse nature of any bureaucracy is that it can lobby to expand its size and control when a failure occurs, even if its central planning was the reason for the failure. As long as there is an FAA in charge of the efficiency and safety of the aviation industry, there will most assuredly be ever increasing flight delays and disasters like the one on September 11. Such a state of affairs is one of the unfortunate outcomes of that tragedy.
While government regulation has brought about several efficiency problems in the airline industry, nothing has raised more doubts about the FAA's ability to insure aviation safety as the recent air attacks of September 11th. People flying on airlines want to obtain services that are safe and have dependable quality. Consumers would like to have advanced assurance of quality and safety, but can the FAA provide regulations that assure quality-and-safety in the industry with a top-down bureaucratic style (Klein 1998)? Obviously, based upon the events of September 11, the evidence indicates that the current system has major flaws in it and that providing safety assurance is uncertain. One of the major problems is that both the airlines and the FAA are responsible for providing safety. The airlines can blame the FAA and say that they were only following the orders, and the FAA can blame the airlines for not enforcing their regulations well enough. When everyone is in charge of security and safety, it often means that no one is in charge of security and safety (Hudgins 2001).
The airlines failed to prevent the attacks of September 11th because the FAA does not allow them to protect their property except in federally approved ways. Box cutters were the most deadly weapons on the planes used in the attacks that day because the FAA prohibited the pilots from arming themselves. As a result, the hijackers were easily able to commandeer the aircraft. If the pilots or crew had access to superior weapons, then they could have used them to exercise the force necessary to protect their lives and the airlines' property. However, "Title 14, Code of Federal Regulations, Part 108.11 only allows armed planes with the approval of the FAA" (Tucker 2001). Because the FAA has not allowed guns on planes since the end of Nixon's sky marshal program in 1973, airplanes have been susceptible to hijackings for years. Again, the basic knowledge problem of the central planner accounts for the FAA's failure to adequately provide for safety. The FAA administrator, Jane Garvey reported to the New York Times (September 25, 2001) that guns on planes were not even considered or never would have been before the attacks of September 11 (Tucker 2001).
Institutional changes need to be made in order to provide better incentives for security liability (Poole and Butler 2001). The airports, which are government owned, need to be privatized and put in charge of their own security. This has been done in several other countries where the airports are legally liable for any security lapses (Hudgins 2001). This would create a vested interest for airports to provide the best security possible because they would be financially liable for their failures. Airports would have an incentive to hire innovative firms that would provide more efficient and effective forms of security (Murphy 2001). Because of the basic knowledge problem, we do not know what the best security measures are for airports. However, we do know that they can become known more readily through the competitive entrepreneurial-discover process (Kirzner 1992).
The problem with the industry today is that the FAA is getting more involved in aviation safety and security instead of less involved. The FAA responsibility for the safety problems in the industry stems from its monopoly over the air traffic control system and from its commitment to a perimeter security system at the airports and to its weapons policy on aircraft. Government-imposed monopolies only assure resistance to innovation while maintaining what are essentially inefficient operation methods. The reason why the ATC system compromises safety and security is the same reason why it is operationally inefficient. The ATC system has been the source of safety hazard for years. The ATC system currently uses archaic radar and 1960's mainframe computers that run on vacuum tubes. The equipment is so antiquated and prone to failure that the FAA has to preserve safety margins by "artificially increasing the spacing between flights, imposing ground holds, and using other techniques that reduce system capacity" (Poole 2001). The obsolete ATC equipment, along with the increase in air traffic since 1978, has been the source for a growing trend of collisions and near misses on runways (McKenzie 2001). The FAA's monopoly of the ATC system has tended to undermine the safety of all those who are involved in air travel.
In addition to the safety and security problems arising due to the ATC system, the FAA is also undermining safety by promoting a perimeter shield at airports and obfuscating issues of liability. In a free market situation, consumers would not have to keep up with the safety records of airlines. The airlines' insurance providers, the ones with the most liability, would have a vested interest in monitoring their clients. Insurance companies would have to check to make sure that the airlines kept up with their safety standards. If certain airlines did not do so, then they would consequently suffer direct financial penalties in the form of larger insurance premiums (Murphy 2001). The FAA has no financial liability in the airlines and cannot provide the best safety standards for this reason. Wildavsky (1988) put the matter this way: "Safety results from a process of discovery. Attempting to short-circuit this competitive, evolutionary, trial and error process by wishing the end - safety - without providing the means - decentralized search - is bound to be self-defeating" (288). Since the FAA does not have the profit incentive, nor is it held liable for failure, its safety and security programs will be destine to fall far short of those likely to be adopted by private institutions (Klein 2001).
Clearly, there are also several problems associated with incorporating passenger screening into a federal bureaucracy. First, federalizing passenger screening does nothing about regulating the access to the rest of the airport by private employees of the airport. Federal investigators have been known to be able to get around the perimeter security of airports and onto the tarmac one out of three times in the past. Second, under a federal civil-service bureaucracy, the ability to attract and keep competent workers is limited as well as the ability to incorporate new technology. Even if new technology can be incorporated, it is difficult to fire civil workers whose jobs would be eliminated by that technology. Third, under the federal government's one-size-fits-all security plan it will be difficult to accommodate all airports because of their varying sizes and designs (Poole 2001). Most of all, central planning will most assuredly fail to provide the best security system because of the basic knowledge problem the central planner faces (Kirzner 1992). The recent federalization of airport security under the FAA will turn out to be a new source of compromised safety and efficiency in the industry. The current plan of the U.S. government is to federalize passenger-screening operations and to employ a perimeter security strategy like the one that failed on September 11th. The only difference is that the new system will be more thoroughly owned and operated by the federal government. Hence, it will be even more bureaucratic. The government's one line of defense is to protect the "outer ring" of the airports before travelers get to their gates. Once travelers pass through metal detectors and their baggage clears the X-ray machines, they are considered to be in a "weapons-free zone" and "safe" inside the perimeter. Each traveler who passes through the perimeter is assumed to be a potential hijacker and treated equally under this system. Treating everyone as a potential terrorist makes perimeter security tremendously inefficient in terms of the time and money it takes to provide daily enforcement. The FAA's elimination of curbside check-ins and the assignment of equal marginal risk to each traveler will also do nothing to increase the chances of catching a potential terrorist (Anderson 2001).
The airports and airlines should be able to enter voluntary contracts that determine who is liable in the case of security lapses. When private firms determine that on their own accord, insurance companies can underwrite the contracted liabilities. Both the airports and the airlines would have to provide an adequate amount of safety and security based on the requirements of the insurance companies. The airports and airlines would either have to hire firms to provide these safety and security measures or provide it themselves. Consumers would not have to worry about quality and safety assurances because the insurance companies would have a vested interest in making sure that certain standards were being met. The airports and airlines would have a vested interest in providing quality safety because the underwriters of the risk would penalize them financially in the form of higher insurance premiums if they did not do so. Competition and the entrepreneurial-discovery process in the free market would drive all the firms involved to provide the most effective and efficient safety measures at the lowest cost to the consumer. However, since the FAA mandates the imposition of its own safety and security system and is not financially liable for its failure, there is little likelihood that its system will either be safe or secure. The FAA has no real incentive to change its plan even in the face of overwhelming evidence that it failed. In fact, the perverse nature of any bureaucracy is that it can lobby to expand its size and control when a failure occurs, even if its central planning was the reason for the failure. As long as there is an FAA in charge of the efficiency and safety of the aviation industry, there will most assuredly be ever increasing flight delays and disasters like the one on September 11. Such a state of affairs is one of the unfortunate outcomes of that tragedy.
