On Monday, President Trump announced plans to privatize the out of date government controlled air traffic control system. The intent of the plan is to spinoff the air traffic control system from the Federal Aviation Administration within three years and convert it to a non-profit company. The FAA currently spends more than $10 billion per year on air traffic control, which largely still uses radio and radar technology from the 1960’s.
Ending government control of anything is good, but it’s even more so when it comes to transportation barriers. While tax payers immediately save the $10 billion, the real savings will come to travelers in reduced costs and fees. The reason for this is because the market will always innovate because they have an incentive to; the government, on the other hand, has no incentive to innovate. This leads to inherent systemic inefficiencies and cost overruns. It is the nature of the state to always lag behind the market. That’s why the parasitic state has to use laws and regulations to influence and strangle the market into submission.
The downside here is that this reform, being written by the state, will allow the influence of the cronies dominate leading to a cartelization, not a genuine free market solution. Once that non-profit fails to produce, it gives the critics of capitalism ammunition. The fact that the “solution” was a mile away from free market capitalism doesn’t seem to matter. This process isn’t uncommon. Republicans have been doing damage to the free market like this for years.
President Trump’s plan is not a done deal yet as many Democrats and some Republicans oppose the plan, which has to get through Congress.
Overall, it is always best to phase out the state in any way possible. Hopefully this leads to a trend in eliminating state control over more and more areas of transportation. Next up should be the TSA.