Garett Jones  

Would the Private Sector Make You Remove Your Shoes Before Boarding?

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Shadow Banking: Probably Bigge... Free Market Airport Security...
Alex and some of the internet are noting that airline security might cost lives and does cost liberty. Yglesias asks one counterfactual: How many airplanes would be "blown up by terrorists" if there were no airline security?  

I might have asked instead how many airplanes would be flown into skyscrapers and nuclear power plants (big propaganda rewards available), but I have another counterfactual that is more econ-oriented: What security protocols would a purely private air travel system enforce?  

I suspect that if security were up to the private sector it would be quite stringent.  Airlines and airports would compete partly on safety, and as we all know, people overestimate the risks of air travel.  It's possible that private sector inspections would be even more invasive, less respectful: Would an airline want the reputation as the company that lost passengers--or one of the best surf spots in California--because they were afraid of offending an elderly lady?   

I say no. If you value personal autonomy at airports (a big if) you should probably devote your efforts to weakening TSA, not introducing laissez faire air security.  

Coda: I often think about these words by Alex, on the related issue of competitive governments:

Competitive law appears to increase efficiency but it's less clear that competition among governments gives rise to a libertarian world.  Homeowner associations, for example, often impose stricter zoning regulations than cities.  You could say that the system as a whole is more libertarian, but no one lives in the system as a whole.



COMMENTS (18 to date)
rapscallion writes:

"Would an airline want the reputation as the company that lost passengers--or one of the best surf spots in California--because they were afraid of offending an elderly lady?"

Private airline security wouldn't bother searching elderly white ladies because they aren't the kinds of people who blow up planes.

Private security would do the rational, cost-efficient thing and use ethnic and racial profiling.

That's why libertarians tend to not be too specific about exactly how privatizing airlines would enhance security.

Ben Hughes writes:

You might be right concerning invasiveness. But there's another - IMO more important vector - to consider: time efficiency. The two are not necessarily related.

Personally, I'd be glad to do whatever they want me to do if I had a 90% chance of going through security in under 90 seconds. The big problem for me is not "invasiveness", it's time costs. And not only time costs in so far as the time you spent waiting, but arguably more the mere risk/uncertainty of line length causes you go to go the airport much earlier than otherwise necessary.

The TSA currently has no incentive to minimize passengers' wasted time. A few months ago I watched a bunch of TSA agents go on lunch break with a 30+ minute line in which many people were absolutely going to miss their flights. You think private airlines would want that? Hell no.

Q writes:

The amount of damage that could be caused by flying a large plane into a nuclear reactor would probably exceed any capital the airlines could feasibly have, so any kind of limited liability would yield moral hazard. What is the libertarian way of dealing with this?

roystgnr writes:

No one lives in "the system as a whole", but they do live in their most-preferred subset of the system. I might think that a particular neighborhood's or airline's rules are overbearing, but as long as I can live and fly with an alternative, why begrudge people with different preferences from getting what they want too?

It would be a problem for me if 95% of the population had strongly different preferences, the market was too small for anyone to cater to the remaining minority, and so no great alternative existed. But in the centralized public sector the threshold for eliminating alternatives is 51%, and anything higher is still an improvement.

Rob Holmes writes:

Your comment re HOAs isn't too surprising to me. Hans-Hermann Hoppe predicts that small, autonomous private societies would likely be more, rather than less, socially conservative. Of course it's hard to predict how private security would evolve, but I think Ben Hughes is correct that it would probably be faster and more aligned with customers' preferences.

drobviousso writes:

Do you know of any metro in which you can't live in the metro area without being a part of a HOA? If not, the of course every HOA will be more restrictive than the city it is. If it was less restrictive, it doesn't exist.

This test is only possible in a place like SnowCrash where you can't live in a metro without picking you HOA. Only then would we see the full range of restrictiveness that HOAs would provide.

(PS - I know of no better test than SnowCrash for ferreting out people with anarco-capitalist sympathies.)

drobviousso writes:

Q - Insurance, or self insurance by way of bond.

David R. Henderson writes:

@Garett,
Two questions.
1. Do you have any evidence for your claim that private security would be more invasive? How about looking at SFO, Kansas City, and others that don't have TSA? I know it's not a perfect comparison because they're under TSA rules. But I find them pleasanter than TSA at San Jose and, as David Friedman has pointed out, more accountable when they rifle through your checked baggage.
2. I don't have the link handy now, but I recall that surveys of frequent flyers, who account for, I believe, over 60% of the seats filled, find wide and deep upset about TSA's intrusiveness. These are the same fliers who you think would want more intrusiveness?

ThomasL writes:

@Q

Most the reactors were actually designed with that sort of thing in mind. You'd have a major problem, but I doubt you'd have a nuclear incident.

Ken B writes:

Private companies running rides at amusement parks are quite stringent on height and weight requirments, which is a safety and security issue.

egd writes:

Given how much people complain about TSA, do you really think there wouldn't be a market for airlines with less intrusive security?

We spent about $7.8 billion on TSA security in 2011. There were about 787b passengers in 2010. That gives, roughly, a cost of about $10/passenger to insure against damage.

Would you pay $10 to avoid security?

Floccina writes:
but no one lives in the system as a whole.
No one uses every model of car either.
John Swanson writes:

A tangential point, but the problem of "hijacked plane flown into important building" was essentially solved by 9/12/01:

1. A hijacker with a gun, knife, or bomb still doesn't have much leverage over me if my options are "fight and risk dying right immediately but possibly win and survive" vs. "lay low and definitely die within an hour when the plane is crashed into a building."
2. Reinforced cockpit doors that only open from the inside.
3. Greater willingness to have military jets shoot down hijacked commercial flights.

John Thacker writes:

I agree with David Henderson's point, the surveys I've seen suggest that non-fliers are the most supportive of stringent airport safety, and the more people fly, the less they are supportive.

Private airport security would adapt the wishes of the passengers, not those of the non-fliers, and thus would be expected to be at least somewhat less stringent. Note that someone who believes that the measures are necessary would use this as a reason to support nationalized airport security, arguing that the passengers would support pushing externalities of bad security to non-fliers. (And would argue that the WTC going down is evidence of how non-fliers could pay a cost.)

David R. Henderson writes:

@John Thacker,
John, you've just summarized a large part of a paper I've been working on. I really need to get it out. One thing I conclude, which won't surprise you given your reasoning above, is that there is NO serious externality argument for having TSA rifle through your checked baggage.

Glen writes:

At the very least, private airline security would tailor their invasiveness to the wishes of their best customers.

TSA instead takes a “zero tolerance” approach that attempts to (but can never successfully) achieve perfect security. Only the rationally ignorant average voter and/or very infrequent flyer would prefer such service — and airlines would not worry much about losing their business.

The market has already demonstrated that this is how it works: try flying a private jet sometime and see how often you're asked to take-off your shoes!

Glen writes:
Would an airline want the reputation as the company that lost passengers--or one of the best surf spots in California--because they were afraid of offending an elderly lady?
Airlines already rationally conduct cost vs. benefit analyses when considering accidents (to the degree that they are not encumbered by government regulation). Why would they approach passenger security differently?

If minimally invasive screening — combined with other procedures such cockpit door hardening, checked baggage screening, active onboard crew resistance, etc. — served to prevent catastrophic incidents, why would a private company do more? Particularly if “doing more” costs more, offended their best customers and didn't prevent more incidents?

John David Galt writes:

Forget "weakening" TSA. Anything less than complete abolition is a sell-out position.

Disarming travelers is not only unconstitutional, it's the only thing that made 9/11 possible. Four people with box-cutters aren't going to scare 300 anywhere but in a "gun free zone."

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