The two recent crashes of Boeing 737 Max airplanes with the deaths of all aboard were tragic. It’s understandable that government agencies around the world, with the U.S. Federal Aviation Agency being the last, have grounded all 737 Max airplanes until they know more.
Those government actions could actually cause more fatalities than they prevent.
The reason is the law of unintended consequences. Any action you take may, in the best circumstances, achieve what you intend. But people’s actions often cause unintended consequences that offset the good effects of the actions. Examples of unintended consequences, especially consequences of partially thought out government policies, are many. In this article, though, I’ll note two, on airline safety and car safety.
These are the opening 3 paragraphs of my latest article for Hoover’s on-line magazine Defining Ideas. The article is titled “Turbulence at Boeing.”
If you want to understand my reasoning, read the whole thing.
READER COMMENTS
Mark Barbieri
Mar 20 2019 at 12:58pm
You might find it interesting that that FAA has resisted pressure from the airlines and safety groups to require that children under the age of two be seated in their own seat. Their logic is that the requirement would convince more people with young children to drive and that would result in more deaths rather than fewer.
David Henderson
Mar 20 2019 at 1:19pm
I do find it interesting. In fact, that proposal in the late 1980s was the basis of a question I occasionally asked on problem sets or exams in my economics courses. Incidentally, Sam Kazman of the Competitive Enterprise Institute went on NBC and did a first-rate job of debating the woman who was advocating such a measure. At the time, Sam pointed out to me that it was telling, in a good way, that NBC let him have the last word.
Alan Goldhammer
Mar 20 2019 at 4:30pm
Best “conventional” source on the 737 MAX8 story is Jim Fallows over at The Atlantic. Jim is a small plane pilot and knows the ins and outs of aviation. He has about a half dozen posts on this topic already. It appears that it is a multi-factorial disaster involving new software, sensors, and a lack of pilot training. It’s interesting that the Indonesian plane had the exact same problem the day before but there was a pilot in the jump seat who knew exactly how to override the system. Passengers the next day were not as lucky.
I think things are more complicated than David writes in his blog post. FWIW we are scheduled to fly to Calgary from Montreal on an AirCanada MAX8 for a Banff vacation; I assume they will be flying by then late June when our trip is scheduled.
Mark Z
Mar 20 2019 at 5:12pm
The impression I had gotten (I haven’t kept up to date on the matter though) was that the Indonesian crash was due to the software malfunction, that Boeing trained its pilots to override the software bug, and that it wasn’t yet apparent what caused the Ethiopian crash, whether it had to do with the software or not.
Also, flying is so enormously safer than driving that it seems unlikely to me that any currently operational model of commercial plane is dangerous enough that virtually any action that raises airfare and induced fewer people to fly would actually reduce the number of fatalities in net.
Alan Goldhammer
Mar 20 2019 at 5:17pm
Sorry, I should have given a link to the most recent Fallows post. He has links to his previous posts on this topic. From what I have read, Boeing has done little if any training on this otherwise the pilots would have known what to do.
MIchael Pettengill
Mar 20 2019 at 5:30pm
Well, it looks like the MAX has been failing far more often than twice.
Pilots did not report problems beyond “maintenance” issues because of “unintented” consequences, getting fired, causing panic, cause airline bankruptcy, …
The problem is Boeing was trying to avoid competition from Airbus so they kludged the ancient 737 to compete with newer designs (I think the Bombardier something). The crashes are the intended consequence of the kludge to avoid losing market share.
The 737 was designed when not even deep pocket government funded planes were computer controlled to compensate for unstable aerodynamics. The 737 was designed to be inherently stable in a wide rangee of conditions. Ie, it will normally fly corrently if you have no pilot, unless “landing”.
The MAX destablized the 737 design. To restore the stability, Boeing added computer compensation, so the 737 stability could be sold as a feature of the MAX which required no costly pilot retaining of existing 737 pilots. Months ago, the FAA ordered Boeing to require reetraining, but it and the airlines have tried to avoid the costs. The MAX retraining costs are the unintended consequence of Boeing trying to avoid costly retraining for the MAX.
And the FAA deferring to the aircraft makers based on the cost of educating the FAA on advanced designs of fly by wire because gthey only know about designs like the 737, led to the unintended consequence of FAA design inspectors being bypassed on a plane that was being sold as an old aircraft design which old FAA inspectors would reject.
And cutting the costs of approving the MAX, the cost to Boeing of the MAX is certainly much higher than the approval cost savings, certainly an unintended consequence.
The MAX reminds me of repairs to SONGS, where the NRC deferred to the utility and its Japanese contractor, out of fear that a safety review would lead to the plant shutdown by blocking spending a billion on repairs. The unitended consequence of no NRC review for safety was a billion was spent fix a design problem causing needed repairs that produced a worse design needing more repairs than the original. Thus SONGS was shutdown, the Japanese contractor sued and losing money big time. A worse outcome than the feared outcome if regulation had not been cut, clearly an unintended consequence.
Note, it was clearly intended to kill the nuclear power industry when electric utilities were “deregulated” by forcing a split between power generation and delivery. As a Friedman Newsweek reader and citizen following that debate, its clear PURPA got bipartisan support to kill nuclear power. Some consequences are intended.
Jeremy Arkes
Mar 20 2019 at 11:19pm
Grounding the planes could save lives if people would have been dissuaded from flying (and driving instead) if Max 8’s were still out there in the fleets. Kind of difficult to know whether this effect or the main effect you discuss, David, is larger.
Mark Z
Mar 21 2019 at 3:09am
The fatality rate for flying, in terms of deaths per mile traveled, is about three orders of magnitude lower for flying than than for driving. So about 1/1000. So, even if for a relatively dysfunctional plane, substituting driving in its place still very likely increases likelihood of fatality.
It’s difficult to appreciate just how much enormously safer commercial flying is than driving, and just how bad a plane would have to be to be more dangerous than driving.
David Henderson
Mar 21 2019 at 9:43am
Jeremy,
If the issue is government grounding in the situation where the airlines had chosen not to (which is the issue at hand), then I think you’re wrong. The airlines have no desire to freak people out about flying. So if they judge that it’s still worth it to fly the 737 Maxs, then they are judging that they’ll gain more by flying them than by not flying them.
If, however, the airlines would have grounded them anyway and just were using a little more diligence than the FAA used but would have taken a couple of more days, then you have a point.
Note also, though, Mark Z’s response to you.
Benjamin Cole
Mar 21 2019 at 4:06am
I sure wish pundits would consider unintended consequences when the US decides to occupy an entire other nations, using complacent mercenary forces, financed by borrowed money.
David Henderson
Mar 21 2019 at 9:45am
So do I. Fortunately, I am one who always has.
Mike
Mar 21 2019 at 8:02am
An interesting and stimulating article, David. Here’s where I disagree: The private sector (airlines) may well know the risks of flying the airplane better than the public (or the government), but so should Boeing have known the risks inherent in their design better than anyone. If we had wanted to guard against “bad” government policy, under your argument, we would assign responsibility for certifying new aircraft to the company itself, because they have the financial exposure. And yet, that is exactly what happened — and is resulting in enormous criticism. The FAA (according to reports) got out of the business of regulating and delegated the responsibility to Boeing.
Furthermore, some analysts have said that Boeing has limited long-term financial exposure to this sequence of events because airlines have no alternatives to purchase. The production line for the competing Airbus plane is reportedly full for the rest of this decade. In the current duopoly, any airline seeking a short-to-medium haul aircraft will have to stick to the 737 Max despite their concerns. This seemingly can only be corrected by increasing competition to provide more options. (If there were 4-5 manufacturers offering similar planes, the financial incentive to maximize safety would be far greater.) Finally, I’m wondering what the “optimum” number of crashes would be acceptable under this safety argument before a total flight ban was warranted. If two is not enough to overcome the car safety compromise, would it be five, seven, ten?
john hare
Mar 21 2019 at 6:19pm
One of the factors involved is that there is so much paperwork in the certification process already that this slipped through the cracks. It is quite possible that it was the sheer mass of documentation required that forced the FAA to send some of it back to the manufacturer. At some critical mass, it is simply impossible to be aware of all the details.
Boeing is responsible of course. I think it likely that less documentation might have led to better attention to critical details by engineers and regulators.
Dustin
Mar 21 2019 at 1:44pm
The long-term consequences of putting an unholy smack down on Boeing will lead to increased flight safety in the future. Such aggressive regulatory action will also build faith in the institution of flights safety, and that will in-turn lead to increased use of air travel in the future.
The long term is what matters. You’re argument feels very ‘partial-equilibrium’.
Mark Z
Mar 21 2019 at 6:00pm
Empirical evidence shows precisely the opposite to be true. Airline deregulation in the late 70s 1) reduced airfares significantly, 2) the price reductions led to significantly more air travel, 3) saved lives by reducing road travel, and 4) was coincident with an increase in airline safety.
Some good papers on this:
Richard McKenzie and William Shighart II. “Deregulation and Air Travel Safety.”
Lance F. Bylow and Ian Savage. “The effect of airline deregulation on automobile fatalities.”
Seriously, people are, if anything, way way to paranoid about plane crashes, and vastly underestimate the value of their lives on the roads relative to the skies. The numbers are hard to argue with. The fatality rate from flying is so vanishingly small, I’m not sure how one find serious returns to be made in making it even safer without making it more expensive. It seems many people are just more interested in punishing Boeing than in doing the math and making the decision that minimizes the number of people that die.
Dustin
Mar 22 2019 at 9:59am
Are you claiming these papers show “deregulation, always and everywhere, is a good thing”? Because of course they don’t. They show that deregulation, in the specific context cited, had a generally beneficial consequence. Don’t extrapolate that with unjust logical leaps.
Seriously people, no need to be so ideologically rigid. Deregulation isn’t “good” or “bad”. Deregulation can be, good, bad, or somewhere in between, depending on the specific context. Much as with tax levels and revenues, there is a sweet spot for regulation that maximizes utility.
David Henderson
Mar 22 2019 at 11:11am
Dustin,
I’m not sure whom you’re addressing, but if it is I, I’m not claiming that these papers show deregulation always and everywhere is a good thing.” My article and post are on two specific issues.
Dustin
Mar 22 2019 at 12:11pm
Apologies, David. My comment was in reply to Mark Z. Having some difficulty with my web browser and inadvertently submitted a new comment.
Mark Z
Mar 22 2019 at 1:50pm
If the goal is to minimize fatalities and injuries, then I’m arguing that’s the airline industry is almost certainly over-regulated, not under-regulated. I think that’s a perfectly practical criterion, as opposed to pursuing regulation for its own sake.
Also, from a standpoint that is suspicious of paternalism and views voluntary transactions as generally mutually beneficial, it’s entirely justified to see the vast majority of possible state regulation of economic activity as net harmful, and therefore likely most actual regulation of economic activity. There’s no reason our default prior should favor needing state permission to engage in voluntary exchange.
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