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November 6, 2018|Adam Smith, cartels, Market competition, socialism, unions

Exploitation on the Market?

by James R. Rogers|

(stock.adobe.com)
As with Adam Smith’s tradesmen, we don’t want a fully cartelized economy. We want to cartelize our part of the economy

April 4, 2018|bankruptcy law, coal, Crony Capitalism, Donald Trump, ethnics preferences, Republican Party, unions

Classical Liberalism Does Not Play Favorites

by John O. McGinnis|

A rule of law that is worthy of the name does not play favorites, and this insight remains one of the highest ideals of classical liberalism.

September 7, 2016|American Airlines, Antitrust, Obama administration, Oligopoly, unions, United

The Obama Administration Is Helping Raise Your Airfares

by John O. McGinnis|

Last week American Airlines took two extraordinary actions that confirm that the airline industry has become an entrenched oligopoly.  First, American Airlines began a bizarre new advertising campaign. Its message: be a good flyer by showing consideration to your seatmates and maintain equanimity in the air. This advertisement makes little sense in a competitive industry. It does not tout low prices or any distinctive amenities of American that might help it gain market share.   An industry that implicitly coordinates on price and amenities, however, might benefit from the such an advertisement, if it got more people to fly generally.

Second, American Airlines gave a $13 million severance payment to its President even though he was joining a rival, United Airlines.  And the severance was not a matter of legal obligation but at its discretion. It is wholly against usual business practices to give gifts to a high level executive who goes to work for a rival. The more frequent reaction is to sue the official for endangering trade secrets. But again this course of action makes sense if American, United and other airlines are engaging in the implicit coordination made possible by oligopoly.  The President of American would then still working for a common cause. Why not maintain goodwill in those circumstances?

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March 27, 2016|Air travel, Antitrust, Carter, Chuck Schumer, Obama, unions

Chuck Schumer Wants to Raise Your Airfare

by John O. McGinnis|

One of the Carter administration’s great achievements was deregulation, and in no sector was the success greater than in the airlines industry. The result was more competition and lower fares that democratized travel. It is a troubling sign of America’s lurch from liberty and free markets that Democratic legislators are trying to re-regulate the airlines and that the Obama administration is dampening competition.

The most egregious offender is Chuck Schumer, the incoming Democratic leader of the Senate (he will be majority leader if the prediction markets are right). He wants to regulate the width and leg room of airline seats. This is hardly a safety issue: the FAA has not expressed concern, and airline travel has never been safer with no fatalities on domestic commercial passenger flights last year.

Airlines already offer more room in first class and economy-plus for additional money. Are consumers not capable of choosing how much leg room they want to pay for? What other decisions does Schumer want to make for us? 

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January 25, 2016|Charles Moore, London, Margaret Thatcher, Privatization, tax rates, unions

Margaret Thatcher, Heroine of Classical Liberalism

by John O. McGinnis|

When I went to Oxford in 1978, I had looked forward to spending many weekends in London, one of the great metropolises in all of history. But after an initial visit, I rarely returned. Outside of a few well-known precincts it was a shabby city. But even worse than its appearance was the general sense of lassitude, even paralysis. For instance, it was hard to find places to sell you the simplest groceries outside of very strict business hours. And I was always worried about getting back to Oxford. Industrial action in the form of railway and tube strikes could occur at any time. The economic and spiritual climate of the country was as dismal as its fall and winter weather.

But now London is again one of the great cities of the world, vibrant, innovative and resplendent. One woman is responsible for the transformation of the city and the nation of which it is the capital. That is why it is such a wonderful event to have a superb new biography of her glory years by Charles Moore: Margaret Thatcher at Her Zenith: In London, Washington and Moscow. The book shows why she is one of the rare leaders who transfigured her nation for decades, if not centuries to come. The comparison is less to other British Prime Ministers, but to other transformative world leaders, like Peter the Great or Ataturk. And what separates Thatcher from those leaders is not only her sex, but her democratic methods. She was able to accomplish her goals while persuading fickle and shifting popular opinion.

In this volume Moore details the manner in which Thatcher replaced the state with the market in occupying the commanding heights of the economy.

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November 12, 2015|Competition, Testing, TSA, unions

For More Privatization and Less Unionization at the TSA

by John O. McGinnis|

I travel a lot and one of most unpleasant problems I encounter is the TSA. The lines are frequently long and the employees on occasion discourteous. But the most annoying aspect is that I have very little confidence that its procedures are well designed to keep us safe or that its personnel even assiduously follow these procedures. Over the summer confirmation of my fears came in the form of Homeland Security’s revelation that in over ninety percent of the instances, a “red team” designed to test security got through with some sort of dangerous contraband. Such failures should force us to reconsider the structure of TSA.

What the agency most needs is more private competition. Currently few passengers go through private screening. If the agency put more private contracts out for bid, the government could incentivize better results.   The contracts could include clauses that would reward companies for passing the tests that the government run screening has so miserably failed. More competition would also aid innovation and efficiency over time.  A centralized bureaucracy is unlikely to come up on its own with the all best ideas. At first, the government could continue to centralize various aspects of security, like background checks of screeners. But even those could be outsourced as if contractors could show that they had better methods.

The government should also reconsider unionization of TSA screeners currently employed by the agency.

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February 11, 2015|Anthony Foxx, Competition, Open Skies, Penny Pritzker, unions

The Battle for Open Skies

by John O. McGinnis|

An article in the New York Times this week described how domestic airlines are conspiring with their unions to weaken open skies agreements. These agreements permit American and foreign carriers access to one another’s markets on a reciprocal basis. They empower airlines to decide where and how often to fly internationally, based on market conditions, not national quotas or other irrelevant considerations. The result are good for airline passengers. Fares become lower, and more international flights go from more cities in the United States to more cities abroad.

The most troubling aspect of the article was that the Secretary of Commerce, Penny Pritzker, and the Secretary of Commerce, Anthony Foxx, were entertaining the American airlines’ and unions’ request for restrictions on the entry of new foreign airlines into the American market. Their complaint is that deep pocketed airlines from the Middle Eastern countries, like the United Arab Emirates, were engaging in “unfair” competition and thus their flight plans needed to be blocked.

These Secretaries should have directed the airlines and their unions to take their complaints to the Justice Department, because competition laws are the best way to assess whether the foreign airlines are acting anti-competitively.

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Book Reviews

A Mirror of the 20th-Century Congress

by Joseph Postell

Wright undermined the very basis of his local popularity—the decentralized nature of the House—by supporting reforms that gave power to the party leaders.

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The Graces of Flannery O'Connor

by Henry T. Edmondson III

O'Connor's correspondence is a goldmine of piercing insight and startling reflections on everything from literature to philosophy to raising peacocks.

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Liberty Classics

Rereading Politica in the Post-Liberal Moment

by Glenn A. Moots

Althusius offers a rich constitutionalism that empowers persons to thrive alongside one another in deliberate communities.

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James Fenimore Cooper and the American Experiment

by Melissa Matthes

In The American Democrat, James Fenimore Cooper defended democracy against both mob rule and majority tyranny.

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Podcasts

Stuck With Decadence

A discussion with Ross Douthat

Ross Douthat discusses with Richard Reinsch his new book The Decadent Society.

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Can the Postmodern Natural Law Remedy Our Failing Humanism?

A discussion with Graham McAleer

Graham McAleer discusses how postmodern natural law can help us think more coherently about human beings and our actions.

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Did the Civil Rights Constitution Distort American Politics?

A discussion with Christopher Caldwell

Christopher Caldwell discusses his new book, The Age of Entitlement.

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America, Land of Deformed Institutions

A discussion with Yuval Levin

Yuval Levin pinpoints that American alienation and anger emerges from our weak political, social, and religious institutions.

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About

Law & Liberty’s focus is on the classical liberal tradition of law and political thought and how it shapes a society of free and responsible persons. This site brings together serious debate, commentary, essays, book reviews, interviews, and educational material in a commitment to the first principles of law in a free society. Law & Liberty considers a range of foundational and contemporary legal issues, legal philosophy, and pedagogy.

The opinions expressed on Law & Liberty are solely those of the contributors to the site and do not reflect the opinions of Liberty Fund.
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