An obituary at The Economist for one of the key players in the deregulation of American business that was critical to solving the economic malaise of the 1970s:
WHEN everyone else at the airline counter for the flight from Hicksville to Washington was sighing, checking their watches and using their elbows on their neighbours, Alfred Kahn would be smiling. And later, cramped in his seat between some 20-stone wrestler and a passenger whose “sartorial, hirsute and ablutional state” all offended him, snacking from a tiny packet of peanuts that had cost him a dollar, he would sometimes allow the smile to spread under his Groucho Marx moustache into a big, wide, gloating grin.
For Mr Kahn had made this crowd and packed this aircraft. His deregulation of America’s airlines in the 1970s opened up the skies to the people, for better and worse. And though, being an economist, he could not help muttering about the imperfection of societies and systems and the absurdity of predictions—and though, being an inveterate puncturer of himself, he would demand a paternity test if anyone called him the father of the deregulated world—his adventures with airlines led on to the freeing of the trucking, telecoms and power industries, and heralded the Thatcherite and Reaganite revolutions.
When he took over the Civil Aeronautics Board for President Jimmy Carter in 1977 air travel was regulated to the hilt, with prices, routes and returns all fixed and aircraft, which could compete only on the number of flights and the meals they served, flying half-full. Mr Khan, furiously resisted by companies, pilots and unions, removed the rules. As an academic, author of “The Economics of Regulation” in two stout volumes, he was eager to see those elusive and fascinating things, marginal costs, brought into play: to let prices follow the constantly shifting value of an aircraft seat as demand changed or departure time loomed, or indeed as shiny new jet planes depreciated above him, just “marginal costs with wings”.
