I have a new piece on EconLib, the Liberty Fund forum hosted by my main man, Russ Roberts.
An excerpt, on Glock Airlines:
[The basic problem is this:] can I decide, and risk just my money, for great reward if I'm right? Or will we decide, and risk our whole future budget, on things we aren't very good at deciding?
The examples come thick and fast: should we have a uniform ethanol standard in all gasoline, or should we let gas stations (or individuals) concoct their own fuel mix formulas? Should the government subsidize hydrogen fuel cell cars, or let people at the extremes, perhaps two Mikes in some garage, work on the problem? Why not allow terminally ill, or even mildly ill, people to use whatever drugs they want, regardless of whether Median Joe (working through his stone-faced employee, the FDA) thinks that drug has five chances in a million of giving you a stroke?
Markets, and market processes, are themselves a pretty important innovation, one not always approved or understood by Median Joe. Why not let the market work at an even more radical level, one that many people might think goes too far? Imagine that airlines could compete based on the level of security they provide. Let passengers choose their own security, along with a mix of price and inconvenience that some entrepreneur thinks would increase profits.
And we could go further: imagine a security line at the airport where the guard looks at your boarding pass and asks, "Are you carrying any weapons?" When you say no, he gives you one, a 9mm Glock. "All passengers are required to carry these, sir. Airline policy." Not all airlines, mind you; only "Glock Air" (motto: "We just flew in from Cleveland, and boy are our arms locked and loaded"). You might choose to fly Glock. They have never had a terrorist incident, and if you push the flight attendant call button the guy comes running.
Or, you might not fly Glock. You don't have to. You might choose some other airline with a unique combination of services, safety, and schedule. In the current regulatory environment, too many decisions are one-size-fits-all, because we don't recognize the possibility that it could be different.
We have become too accepting of the views of the middle, in too many aspects of our lives. Worse, we have fallen victim to a soft but encroaching political paternalism. In many cases, it isn't even the median citizen who enforces his views on everyone. Instead, special interests and "public" lobbyists dominate the making of rules and decisions that force all of us to act as if we all had the same views on risk, taste, and service.
The thing to keep in mind is that market processes, working through diverse private choice and individual responsibility, are a social choice process at least as powerful as voting. And markets are often more accurate in delivering not just satisfaction, but safety. We simply don't recognize the power of the market's commands on our behalf. As Ludwig von Mises famously said, in Liberty and Property, "The market process is a daily repeated plebiscite, and it ejects inevitably from the ranks of profitable people those who do not employ their property according to the orders given by the public."