Summary: The airline industry is a tale of New America. Deregulation, cheap fares allowing more people to travel but with increasingly poor service and rising complaints. It’s an oft-told story of stupid people unaware of the consequences to their behavior. But that’s a shallow view that misses the real significance of these trends. {1st of 2 posts today.}
Contents
- Unexpected fruits of deregulation.
- Interpreting the whining.
- It’s the cry of a dying middle class.
- Conclusion: expect more of this.
- For More Information.
(1) Unexpected but logical fruits of airline deregulation
The rollback of the New Deal began with deregulation of the airlines (except for safety) — done by the President who began the conservative revolution, which his successor accelerated: James Carter. This allowed far more people to fly, people formerly limited to buses, trains and cars. The unexpected side effect: service has slowly and steadily deteriorated. (There are 25 years of data from the Airline Quality Ratings database run for DoT, with many studies of it by experts such as Dean E Headley — but I can find no analysis of the trend over that period — probably for the obvious reason).
Why has service deteriorated while traffic rose (from 191 billion passenger-miles in 1980 to 580 billion in 2012)? It wasn’t the speed of the increase. In the 20 years before deregulation traffic rose over twice as fast as in the 20 years afterwards — with the airlines still providing excellent service. It’s not that the airlines are rapacious and greedy — their industry has an ugly combination of high volatility (in technology, competition, and revenues) and low profitability. During the dark days after 9/11 it was said that the industry had accumulated no net profits since the Wright brothers.
The answer is obvious: customers give their business on the basis of flight convenience and cost. Carriers give people what they want: cheap travel. Since they have no wizards, that means bare bones service — with cycles of cost-cutting, each one clipping off cost and satisfaction. The next cycle features a new class more crowded than economy.
(2) Interpreting the whining: it’s moral decay
This has produced a boom of chortling about “those stupid Americans” (a genre popular with the inner party, boosting their spirits as their wages stagnate and economic security vaporizes). Here are few examples:
- “Frequent Criers” by Alison Griswold, Slate, 24 December 2011 — “Americans love to complain about cramped flights and extra fees. So why do they keep choosing them?”
- “It’s Time For People Who Whine About Crappy Airline Service To Admit They’re Getting Exactly What They Want“, Henry Blodget, 10 March 2013
- “What Rising Airline Fees Tell Us About the Cable Industry“, Neil Irwin, New York Times, 6 January 2015.
- “Are we approaching the airline tipping point?“, Mark Murphy, Fox News, 10 February 2015 — “Until that happens, you are seeing capitalism at work as customers still choose to fly despite the challenges in air travel today.”
- “It’s Not Just Your Imagination: Airlines Are Getting Worse“, Alison Griswold, Slate, 13 April 2015.
Feel the authors’ self-satisfaction and sense of smug superiority! Perhaps deservedly so.
(3) Another view: it’s the cry of a dying middle class.
When my analysis shows that people are stupid it usually means that I have done a shallow analysis, missed something deeper and more important. That’s the problem with the people are stupid to complain about airlines stories. There’s another reason for peoples’ complaints.
Here we see another aspect of the clash between our idea of America — formed in the 50 years after WWII, with a large and vital middle class — and the New America that’s been rising since ~1980, a plutocracy with a thin upper crust, an economically stressed and insecure middle, and a large underclass.
The large middle class feels entitled to a lifestyle they can no longer afford. We know things have changed. Increasing numbers see their downward mobility vs their parents. We do not understand what’s happening — or why — and so lash out. We choose the cheapest possible airfare, because money is tight — then we complain about the poor service that results from our own choices.
It’s irrational, but we’re rationalizing animals more often than rational ones. It’s the kind of thinking that’s become quite common in our time — we’re in what Heinlein foretold as “the crazy years”, destabilization brought about by rapid change.
Here we have another aspect — a small example of a larger phenomenon — of what Thomas Frank described in What’s the Matter with Kansas? How Conservatives Won the Heart of America
(4) Conclusion: expect more of this.
The middle class will not die quietly, so we should expect to see more of this self-defeating behavior in the future, spreading throughout society.
Conservatives have tapped the angst caused by the rise of the 1% and crushing of the middle class — driven in part by their policies. They’ve channeled our energy to not just distract us from the causes of the rising inequality but also to further it (as in Rand Paul’s budgets shifting the tax burden from the 1% to the middle class and cutting services). And, of course, to splinter us into powerless factions.
This might be one of the most successful political movements in western history. It only works with our cooperation. It’s our choice to travel this path.
(5) For More Information
For a look at the past see Coffee, Tea or Me? The Uninhibited Memoirs of Two Airline Stewardesses
If you liked this post, like us on Facebook and follow us on Twitter. See all posts about inequality and social mobility, especially these about the dying middle class:
- A great, brief analysis of problem with America’s society – a model to follow when looking at other problems.
- Ugly truths about income inequality in America, which no politician dares to say.
I remember reading an account of the rise of feudalism in the 8th and 9th century in the old western roman empire, modern day France, Belgium northern Spain western Germany. It described how the old germanic freeholder peasants were destroyed by the rise of the Baronial classes, the proverbial robber barons, as there security disintegrated, they turned to the church to protect them.
The Churches solution was the creation of the Feudal contract, the obligations that each class owed to the other. This proved to be a robust system which lasted until Napoleon finally swept the remains way. There were certain limits set to noble power, in return the vast majority of the freehold peasants became vassals, some privileged, some not so privileged. This settlement which spread throughout Europe brought an end to the crazy days (the period of unchecked baronial power in the provinces).
The best of the new ruling class adopted a paternalistic view of there vassals. When reading the above post I couldn’t help but be reminded of the last time we allowed ourselves to be stampeded into a new civilisation settlement. Those tend to be long-lasting and become internalised, see the continued existence of a ruling class of nobles and ennobled peers in the UK.
“It described how the old germanic freeholder peasants were destroyed by the rise of the Baronial classes”
Quite a lot of peasants submitted to proto-feudal lords to escape crushing imperial tax collection.
Marcello,
That’s an important point, a step in the decay of Empires. The local lords break away, not paying taxes. The center raises taxes to compensate, so more leae. The peasants are forced to seek protection from the local lords as conditions decay.
There’s a great example of that in the Eastern Roman Empire. I’ll see if I can post it later today.
By the way, the state of current aerospace sector should serve as a cautionary tale in regards to technical progress. Who in the 60’s would have believed that if one wanted to see a supersonic airliner he should head for a museum while manned space would rely mainly on a R-7 offshoot with prospect of perhaps being supplemented by some 1%er personal pet project ?
Flying may well become again unaffordable for the masses.
“When my analysis shows that people are stupid it usually means that I have done a shallow analysis”
Reality is, people are largely emotion driven. Even the dwindling numbers of those who still support science and rational thought do it to a large extent for the emotions it gives them. And they will still behave like an other troop of baboons.
That said making people go along is not that difficult: voting for Hillary may well be the “rational” choice for a liberal given the alternatives, not engaging in grassroot politics may well be “rational” if you are overworked and the system is capable of deflecting anything but the most determined attempts (and frankly at this point one cannot rule out blacklisting and future Room 101 treatment), doing as you are told at work may be “rational” when you can be fired/offshored…
And when it is all said and done americans are still better off than almost everybody else, so it may be argued that not rocking the boat might still be “rational”.
Marcello,
“Reality is, people are largely emotion driven.”
There is a vast body of research that shows this to be false. This is why economics has risen to such prominence among the social sciences: its superior (albeit imperfect) ability to generate insights and even accurate predictions. People have a sense of the practicalities and economics — not perfect, of course — and usually act upon that. Hence the exceptions are of interest.
“rational” behavior
I don’t believe it is operationally useful to speak of “rational” behavior as an abstract thing. Behavior is a means to obtain goals, which are driven by values and time horizons. That is, imo, what’s happened to us. We have prioritized individual well-being over that of the nation — and short-term outcomes over long-term ones. It’s the thinking of peons.
It has nothing to do with our level of wealth or income. History shows many examples of poor people mking long efforts at great personal cost, as have rich people.