>The resort to deregulation, privatization and smaller government since the
1970s
>proves to have been a mistaken response to the new troubles of “stagflation,”
>and an active cause of some of them.
Interesting. This is exactly what is motivating my research into
deregulation which represents for the USA what privatization represents in
countries where nationalization made headway (Great Britain, France, etc.)
More precisely, the problem for airlines was a classic overproduction
crisis involving huge investments in Jumbo Jets at precisely the time that
the energy crisis kicked in. In order to realize a profit, the airlines had
to not only dispense with regulation but also open up a big attack on
labor. It is no accident that Reagan chose the airline controllers as the
first union to go after. When Frank Lorenzo started up the "new
Continental" after the original went bankrupt, the first thing he did was
to challenge the pilots to take a 50 percent cut in pay.
The main thrust was to make certain hubs central to air transport, mostly
cities which hosted airline companies like TWA's Kansas City,
Northeastern's Minneapolis and Atlanta's Delta. In the first blush of
deregulation, there were bargains galore, especially the no-frills People's
Express which was dirt-cheap and unpleasant. Now we find that traveling by
jet is like taking the People's Express of yore, but without the cheap fares.
And all of it is much more risky. In 1969, when George Stigler told Sir
Ronald Edwards, the British chairman of the committee on air transport,
that the marketplace would sort out the problem of air safety, Edwards
responded, "Are you telling me that I should let airline A kill me to prove
to you that you should travel by airline B?"
Louis Proyect
Marxism mailing list: http://www.marxmail.org/
