People Unclear on the Concept
Former New Mexico Governor Gary Johnson is good on a lot of issues, but his belief that the privatization fairy will necessarily grant our wish for kinder, gentler airport security is childlike in its naivete. It’s even shockingly behind the best recent right-wing/libertarian thinking on privatization of government services.
Johnson offers a simplistic account of the differing incentives between a government-run TSA and a privately contracted airport security regime, in which
The airlines, however, who after all own the airplanes and are ultimately responsible for their passengers’ safety and comfort, have every reason in the world to care about security — and providing it in ways that are acceptable to their paying customers.
If allowed to take the responsibility for airport screening, airlines would turn to the best and brightest minds and entrepreneurs on the planet to develop technology and best practices that would certainly be more effective than whatever the government is doing now — and financial necessity would ensure that those procedures did not constitute abuse and unacceptable invasions of our privacy and our bodies.
Certainly, like many other aspects of our lives and businesses, the government may be compelled to establish minimum standards and criteria for airport security; however, let entrepreneurs and the marketplace figure out how to meet those standards — rather than bureaucrats. The result, I am absolutely confident, will be safer air travel, more efficient airports, lower costs, and a lot less officially-sanctioned touching.
Johnson doesn’t seem to get that his benign scenario is just one possible equilibrium outcome of a privatization plan. He’s not thinking very clearly about who the real customers of the security contractors would be – answer: not travelers – and what that means for how security contractors would conduct themselves. (Answer: no first-order incentive to treat passengers well.) He’s not recognizing that the details of those “minimum standards and criteria for airport security” house a pretty big devil: once again, passenger convenience will not be a first-order concern, and ordinary travelers will have little influence on their shape. And he seems to imagine that airlines are the same sort of economic actor as the local coffee shop in an Econ 101 text, when airlines have long been “strategic industries” enmeshed in a web of government support and airline rent-seeking. He doesn’t find any conclusions worth drawing from how the airlines treat passengers today in spheres they do control for how they might treat passengers tomorrow when they become responsible again for airport security.
On the one side, Johnson imagines an airline concern for passenger comfort and dignity that they do not currently demonstrate and would have no strong incentive to express in the security area. On the other, he imagines an airline incentive to “care about security” that they don’t really have. Consider a news story from exactly a month ago, by Colin Moynihan in the New York Times:
Eight months from now, the family of Mark Bavis will get what they have wanted since he died on Sept. 11, 2001: their day in court.
…
Most of the legal claims by people injured or killed in the attacks have been resolved. Thousands of victims and families were paid more than $7 billion from the September 11th Victim Compensation Fund with the stipulation that they would forgo lawsuits. Others declined and filed suits that have been settled over time for about $500 million.
When the Bavis trial begins, it is expected to be the only open Sept. 11 lawsuit. Court approval is likely soon in the settlement of a case involving Louis Mariani, who was also on Flight 175.
In other words, so far, taxpayers* have spent 14 times as much on victim compensation for the attacks of September 11, 2001 as airlines have spent. The government passed laws limiting the liability of the airlines for damages from the atrocity. And as an additional fun fact, the victim compensation fund provided billions of dollars in compensation to the airlines themselves. And Gary Johnson believes the only perverse incentive at work here is that “the TSA doesn’t seem to answer to anyone.”
If all we do is “privatize” the TSA, we’ll still have:
* government-set “security” mandates
* gigantic airlines who rival the financial industry when it comes to government favoritism
* “security” companies and personnel whose customers are not airline passengers
* a manic “security” culture in the country at large
Johnson also hasn’t drawn lessons from the political power of the “security” industries themselves, from the “prison-industrial complex” to law-enforcement unions to Private Military Contractors and other “defense” firms.
I thought in 2001 and still think that federalizing airport security was a “mistake.” (Where “mistake” means the sort of willful folly governments undertake to be seen doing something while simultaneously enhancing their own power.) I think the TSA is a travesty, and current airport-security policies make me much less interested in flying anywhere. I think those policies are symptom and cause, in a feedback loop, of national degeneration: ways the country is becoming pathetic and ridiculous. But imagining that all we have to do is let privatization unleash “the best and brightest minds and entrepreneurs on the planet” is pathetic and ridiculous in its own way. What we need are a citizenry and ruling elite with a less toxic combination of cowardice and viciousness than we’ve developed in the last decade. Unless Gary Johnson knows some waste-disposal contractors that would clean up our national moral brownfields for a fee, privatization is at best a side issue.
*Okay, bond holders.
Comment by Glaivester —
November 20, 2010 @ 2:26 pm
Let’s boil it down. The argument here seems to be:
(1) Government won’t let the airline industry go under, therefore depriving boycotts of much of their effectiveness, making it difficult for customer disapproval to actually translate into anything that could influence the airlines. (That is, there is no way to accurately price convenience on anything where airlines are not allowed to have differing policies).
(2) Government does not require the airlines to pay the price of faulty security, thus disabling any real mechanism for pricing security failures.
(3) Government also has large numbers of mandates and regulations in place that severely limit the scope of security innovations.
Therefore, there is no effective means for airlines to price convenience v. security, no means of punishing them for making bad calculations, and severe limits on what the airlines could with the information if they were able to accurately price convenience vs. security, that make such information of little practical value.
In such a situation, true privatization is impossible.
Comment by TGGP —
November 20, 2010 @ 7:48 pm
“In other words, so far, taxpayers* have spent 14 times as much on victim compensation for the attacks of September 11, 2001 as airlines have spent.”
Are you suggesting that the airlines didn’t pay enough? Because my take is that taxpayers spent way the fuck too much. For a brief period of time, people claiming to have been harmed by 9/11 were like corn-farmers (or agribusinesses which grow corn).
The theoretical argument for contracting out even the scummiest aspects of our police state is that lobbying is a public good, which will be undersupplied if provided by multiple actors.
Comment by Thoreau —
November 20, 2010 @ 8:02 pm
Yeah, I do think that there are plenty of situations where privatization is likely to give good results, but:
1) Not every situation is such a situation.
2) “Likely to give good results” is a qualified statement* about what is probable but not guaranteed, while the Privatization Fairy arguments of “See, they have this incentive, so obviously they will…” seem more deterministic.
3) Yeah, the same people who cram us into narrower and narrower rows, and charge for more amenities, these are the people who care about our convenience and comfort? Mind you, I’m not saying that an airline owes me free snacks or whatever, I’m just saying that if they are charging separately for these things it’s obvious that they aren’t operating in a business model where they are interested in making customers feel warm and fuzzy.
Hotels give you fluffy towels and complimentary breakfast. Airlines don’t. Different business models, different types of competition, etc. Even in Econ 101, you don’t get to assume that the coffee shop and the burger joint are competing on the exact same variables.
That said, I’m still up for trying privatized security, but only because it’s hard to imagine anything stupider than the status quo, not because the Market Fairy will deliver something perfect. It would probably just deliver something slightly less stupid. Which is still an improvement, but not what Johnson is promising.
*Qualified offering?
Comment by Ginger —
November 20, 2010 @ 8:18 pm
My theory, as you probably know, is that the only thing that can beat the scanner lobby is another lobby. The airlines may not go under, but a travel boycott also harms other industries (hotels & restaurants & rental car agencies & cruise ships etc.). What it will take to rein the TSA is in heavy lobbying by those companies.
Tell them you’re not travelling by plane and why, and that will stand a better chance of getting rid of the TSA than anything else.
/cynical
Comment by hjh —
November 20, 2010 @ 10:36 pm
I wonder if I could ship myself DC to LA by ground freight any cheaper than I can fly. Which says nothing about TSA. But the airlines are giving me what I want – affordable convenience. Ideologically, should they not get some love?
Comment by Kevin Carson —
November 21, 2010 @ 2:22 am
A giant corporation is essentially a planned economy. And it’s run by MBA types whose main concern is doing whatever it takes to make this quarter’s numbers so they can game their bonuses and stock options.
That’s how we get companies like BP that essentially hollow out all safety precautions to get the quarterly numbers a bit higher. The MBAs in charge figure they’ll probably have moved on before the chickens come home to roost. And if the unthinkable does happen on their watch, it’s not like they’re losing their own money.
What’s more, the bureaucratic culture of the large organization tends to filter information so as to create a completely imaginary world in the minds of the people at the top of the pyramid. The whole organization is dedicated to telling naked emperors how great their clothes look.
The idea that corporate management would do the sensible or responsible thing based on considerations of long-term financial health is utterly laughable.
The incentives Johnson describes might work on a family-owned business, operating in a genuinely free market, whose owners plan to pass it on to their kids. But what that’s got to do with a giant oligopoly corporation plugged into the security-industrial complex is beyond me.
It’s like Halliburton would never provide tainted MREs to the troops in Iraq because it might cause them to lose money. Bwahahaha!
Comment by steamed punk —
November 21, 2010 @ 10:42 am
Sorry, but I think you missed the most important point: privatized security was already tried before 9/11. It had all of the incentives in place that former Gov. Johnson describes but is still failed!
In fact the private model suffered the most catastrophic failure imaginable. Bad airline security endangered the non-flying public. More people died who were not on planes then were on planes. In other words this is not about securing planes but securing the county.
Comment by b-psycho —
November 21, 2010 @ 3:29 pm
I wonder what the effect would’ve been if that liability cap were never put in place…
Comment by Professor Coldheart —
November 21, 2010 @ 8:04 pm
In fact the private model suffered the most catastrophic failure imaginable. Bad airline security endangered the non-flying public. More people died who were not on planes then were on planes.
If you mean “every year on average,” then yeah. Many more people die on highways than in planes. But I don’t see how putting more screeners in lines would have helped.
Comment by montag —
November 22, 2010 @ 2:23 am
Johnson, during his tenure as NM governor, encouraged the state government to adopt a policy of “voluntary compliance” with regard to businesses and regulations, which was a thorough disaster. Businesses knew that oversight was at a minimum, and many exploited that situation–especially since they knew that Johnson was rabidly pro-big business–and enforcement, when and if it arrived, was never enough to discourage bad behavior. One can’t but help see that in his privatization scheme.
More to the point, the feds had been recommending to all airlines, for years, that they reinforce cockpit doors to prevent intrusion, and the airlines consistently rejected this recommendation on grounds that the retrofit costs and operating costs would be too high.
Of course, once those intrusions resulted in a national calamity, the recommendations became requirements, and the airlines’ costs were subsidized with taxpayer dollars. The only conclusion one can draw from that is the airlines didn’t give a shit about security beyond that which didn’t have an impact on their bottom lines.
That said, when has privatization of law enforcement, military, security or detention facilities ever resulted in cost savings and improved results? Yes, there’s a bureaucratic tendency to self-preservation, but contrast that with the steady corruption of the justice system and the incarceration process after the privatization of many prison systems in this country, thanks to Congress critters and state and local legislators who depend upon lobbyists’ contributions to their campaigns.
Comment by PECB —
November 22, 2010 @ 10:04 am
Time to seek out and utilize air travel options not affected by TSA B.S. — things like charter, local private pilots, small regional airlines that have structured their ops to avoid as much Federal B.S. as possible, etc… .
NOTE: Local private pilots can offer suprisingly affordable options and even private charter can be very affordable when done in groups. Another option (if you fly alot) is to get together with a local private pilot, and some friends, and set up a group ownership arrangement of an aircraft that meets most of the group’s needs. Some recommended, affordable, capable aircraft: cessna 206, cessna 210, cessna caravan, king air 100, and the king air 200 (most, especially non-aviator types, will be happiest with the caravan and king air aircraft).