December 28, 2010
Commentary on Kahn
Blog readers interested in learning more about the life, work, and impact of Alfred Kahn may want to follow these links:
- A Deregulating Democrat, Wall St. J., Dec. 29, 2010 (available here)
- Shira Ovide, Stuck in an Airport? Blame Alfred Kahn, Wall St. J. Deal Journal Blog, Dec. 28, 2010 (available here)
- Robert D. Hershey, Jr., Alfred E. Kahn Dies at 93, N.Y. Times, Dec. 28, 2010 (available here)
- Anne Swardson, Alfred Kahn, Who Oversaw Airline Industry Break-Up for Carter, Dies at 93, Bloomberg, Dec. 28, 2010 (available here)
- International Aviation Law Institute, A Conversation with Professor Alfred Kahn (2006) (available in streaming video here)
Kahn's Lessons From Deregulation
Lessons From Deregulation: Telecommunications and Airlines After the Crunch (Brookings Inst. Press, 2003), one of Alfred Kahn's last works, is available online free of charge here. From the abstract:
Over the last several years, the value of stocks in both the airline and the telecommunications industries have dropped catastrophically. Since these industries were among the most important?and most visible?to have been unleashed from regulation in recent decades (albeit in widely differing degree), their wrenching experience has understandably raised the question of whether their deregulation should be reconsidered or even reversed.
The airlines were comprehensively deregulated in 1978 in one bold stroke, and six years later the government apparatus for controlling domestic fares and routes was abolished. The telecommunications industry is in the midst of a parallel initiative, but one that is both more gradual and more complex. In common, however, is positive evidence of the advantages of open competition over direct comprehensive regulation.
Alfred E. Kahn, one of the foremost authorities on deregulation, argues in this book that every passing year demonstrates the superiority of the road chosen for the airlines. He contrasts the financial meltdowns of these two industries with others taking place at the same time, particularly in technology-related stocks and dot.coms, pointing out that these sectors were also relatively free of direct economic regulation. Their experience provides a useful counter to the natural tendency to blame all the woes of aviation and telecommunications on government policy.
This book provides a valuable and accessible guide to unraveling the complex world of network deregulation. It will serve as a reference point for practioners and policymakers, as well as an important introduction for the general public, written by one of the masters of the field.
Alfred Kahn Reposes
Alfred Kahn, former Chairman of the Civil Aeronautics Board and Professor of Economics at Cornell University, died yesterday at the age of 93. Aside from his towering contributions to regulatory economics, Kahn is undoubtedly best remembered as the intellectual architect of airline deregulation. Under Kahn's leadership, the CAB pushed the long-regulated aviation industry toward reliance on competitive forces. Kahn's project was subsequently picked up by the Congress, which passed the Airline Deregulation Act in 1978 and the CAB Sunset Act in 1984.
Blog readers interested in learning more about Kahn's role in airline deregulation can view the International Aviation Law Institutes's A Conversation with Professor Alfred Kahn, part of IALI's "Conversations with Aviation Leaders" series, here.
Winter Break Over
The blog's "winter break" is now over and regular posting will resume starting today. Our apologies about the silence.