Ayn, Airplanes, and the Profit Motive
I promise that those of you who love Ayn Rand are going to like this one.
Atlas Shrugged, Ayn Rand’s magnum opus, was published at the height of the American Soviet conflict- a conflict stemming from the two country’s vastly different outlooks: one characterized by strict regulation of the economy, state subsidy, government intervention, and quotas; the other, characterized by the laissez faire, low regulation, competition, and the profit motive.
Offering a harsh critique of Soviet political and economic philosophy, Atlas Shrugged tells the story of Dagny Taggart, head of Taggart Transcontinental (railway company), who held the success of her company of utmost priority. For Dagny- who loved money as much as any man or woman- Taggart Transcontinental was about more than making a profit- it was about more than the fact that Taggart Transcontinental was the lifeblood of America, helping to facilitate greatness. What Dagny loved was what the railway represented: a testament to human will; a tribute to what human beings were capable of through steely resolve and commitment rational thought.
With every new line constructed, every shipment of iron ordered, every speed record that the company’s trains broke, Dagny felt a swelling pride in the fact that what Taggart represented human potential in its purest form. Thus, you can imagine her horror when the government proclaimed that her trains were going too fast, and were too efficient, and as a result, were crushing smaller competitors - she was ordered to slow down her train’s speed by half in order to meet the quota. Of course, this doesn’t sound so bad- until you remember that for Dagny, Taggart was a symbol for human potential- she saw this mandate to be crippling to human greatness.
Once upon a time, flights from Denver to New York took three hours and ten minutes- today they take three and a half. A similar story has occurred elsewhere, as flights from Washington D.C. to Miami used to take just over two hours- they now take forty five minutes. Most stunning about this phenomenon isn’t the fact that planes have failed to fly any faster than they did forty years ago, but that they’re actually less efficient now than they were in the past. What happened?
In the 80s, airline executives realized that by making planes go faster, they were actually spending more on gasoline than they wanted to. In order to remedy the loss, they found that if they slowed down the airplanes, the planes would be able to ride forward on the force of inertia, rather than use fuel that would have otherwise sped it up. While this would make the journeys longer, they decided that shifting the inefficiency from profits to customers would ultimately yield better results. In this case, there was no sinister plot on the part of the government to try and curb the performance of strong companies- the companies came to this conclusion all on their own. However, is slowing down planes all that they did? Or did they slow down the rate at which human potential would be realized? The answer ultimately depends on the degree of conviction one believes Ayn Rand’s words to hold.
Optimizing revenue and minimizing costs are necessary in making any business successful, no matter the industry- Dagny herself probably made many business decisions which involved reducing costs- after all, she ran a business. But one can only wonder: if Dagny Taggart had been CEO of United, Southwest or Jetblue, and her analyst came up to her and said:
“ma’am, we’re going to have to make the planes go slower if we want to make more money”
What would Dagny Taggart do?
Her head would explode and Ayn Rand would melt into oblivion like the witch of the West. Rand was a propogandist in her public life and a hyppocrite in her personal life. Her conceptualized astatism where market forces create utopia neglected the iron triangle of public/private/individual synergies (as well as the ingrained nature of those associations)
At the time, she helped sway public opinion in the direction necessary, and did make valuable contributions to the literary and political discourse. At this point, she's been discredited both by the left, the right, academia, and common sense. She's a good read, but remember that she was a polemicist with no real world responsibility, and thus could not speak to real world application of her concepts.
Think of it this way: in grammar school, you are told a highly simplified verson of reality to get a basic understanding. Then in high school they go into more detail. If your brain forms correctly and you go through college, you then learn that economics and the world in general are far more complex with layers of understanding that the grammar school framework simply could not explain.....Ayn is that basic level of "why America is good", but not a realistic guide to much of anything.
interesting thanks for your input dooder!
If Ayn Rand had her way, every industry would be a monopoly and we'd have a 50% unemployment rate as companies blindly chased their profit maximization. As far as the question, I think as CEO she'd first crush the competition and then slow the planes down to maximize profits when there was no one left to compete. Anyone re-enters the market -> speed up planes -> re-crush competition -> slow them down again -> rinse and repeat.
This is the logic for why lots of people invest in Amazon. Aside from their weird accounting that makes their margins look smaller than they actually are - imo investors believe Amazon is pursuing their strategy to essentially crush the competition and produce a near monopoly. Then, investors hope, they will turn on the profit switch and money will flow forever!
The Ayn Rand debates on WSO are my favorites. I missed the last big one here, I hope this turns brutal.
So slower airplane are more fuel efficient because they have more inertia? Huh?
An interesting post (despite my not having read the book - it's on my list, don't worry). Reading this has made me want to take up blogging, maybe later.
On planes and efficiency, it would be most unfair to measure an airplane's efficiency just by its speed of getting from A to B (though I'm not suggesting that's all you are measuring it by, it's just what I inferred from the fifth paragraph since you've only mentioned flight times). Efficiency is about maximizing gains and minimizing losses (as you've alluded to in the final paragraph). So while the flights are taking longer than they used to, it is not evident that efficiency has decreased. Moreover, I would argue that efficiency has increased since fuel costs have fallen and the flights are only minutes longer and cheaper in real terms.There are perhaps more arguments such as the increased capacity of commercial airplanes (I can't say for certain that the airplanes of the 80's carried fewer passengers but it's a reasonable guess), the decreased risk of crashes (I'm mostly thinking of the Concorde) and so on. All of these should be considered before making the judgement of efficiency.
I also have an issue with "shifting the inefficiency from profits to customers" (it's quite a misleading statement). While that is technically true in the short term (where the same planes are being used and assuming the prices of the flights haven't fallen to reflect costs) it's obviously not the case in the long run. The skies were once the domain of the upperclass but now air travel is accessible to almost everyone (a flight from Washington DC to Miami now costs a little over $100). Clearly, over time customers have benefitted from the airlines' decision to slow planes down for (short-run) increased profit (which has since been used to further lower costs and thus prices).
Too often, people concern themselves with what is seen and not what must be foreseen (throwing a bit of Frederic Bastiat around). It is a simple matter to see that airlines stand to profit at the customers' expense but it does not mean the customers lose out.
So, the problem that Dagny faces is a relatively simple one; slow the planes for now to achieve the greater profit (in line with the profit seeking motive) and develop ever faster planes (in line with her desire to strive for greatness).
HAHAHA BASTIAT not agen mang
but you know justin, the lost time that the passengers have accepted may have left them with a bit more money in their pockets, but ultimately they've lost something much more valuable: time
while this is subject, i think one can definitely make the claim that saved time is more valuable to humanity than the few dollars you save from buying a ticket on a slow airplane
Sorry if this is a completely incoherent statement, but:
You're assuming that people would actually utilize that time for some potential good or value. Also, many people are actually given the option of spending more for expedited plane rides (non-stop), or cheaper and somewhat longer rides. The people have the option to decide; what is more valuable? Time, or money? Most choose money, because for the recreational flier, the time it'd take to earn the marginal difference in faster plane rides back, is greater than the extra time they'd spend on the plane.
And saved time is more valuable for humanity?? Come on man. Do you know how many hours a year Americans spend watching TV?
Pretty fucking simple. She'd fly two planes: one plane that's expensive, but goes faster than all her competitors' and one plane that's slower, but is cheaper than all her competitors'. In this way, the value judgement of time and money would rise to the forefront and you would not have to impart the value judgement onto the consumer; making one fast and one cheap gives people optionality not found in the singular "sorta fast and sorta cheap" option. She'd also spend her money investing in R&D to solve the problem of said speed/efficiency trade-off rather just throwing it to DC lobbyists.
Efficiency is by all means a logical, "Randian" value. Objectivism isn't about having the biggest dick, it's about being the best at fucking. Roark wasn't known for necessarily building the tallest buildings, but rather the smartest and most logical (see: efficient).
Stepping aside from the Rand for a moment, the very obvious oversight here is that we're comparing a 30+ year period with technology as a static and it's holding true, which should be fucking unacceptable in the world we live in. The thing to be outraged about is not that they're slowing our planes for an efficiency consideration, but that a technological problem we had before the 80s is something that still hasn't been innovated for yet.
Objectivism isn't about having the biggest dick, it's about being the best at fucking.
[/quote]
Classic!!
are you under the impression that americans spend their money on worthwhile investments or something? time imo is still more valuable
But that is why flying somewhere (among many other things), is called discretionary spending. It is at the discretion of the consumer to decide what is more valuable, time or money. There are two scenarios that I can think of:
A.) Business man/woman- flying somewhere non-stop, business or first class, going for a meeting/project/roadshow/w.e--> Time is more valuable than money since the time they spend on the plane is less valuable than what they could potentially be earning.
B.) Vacationer- You are going on a family vacation or with friends to either a near or far/exotic location. The money you spend on the flight is more valuable than the extra 30 minutes that you take to get to your destination.
I'll try to rationalize it again. I am going to Thailand or Florida. I honestly don't care if it takes an hour more or hour less to get where I am going. The most time consuming thing about the actual travel is layover time anyways (which of course is bound to happen on the trip to Thailand from NYC).
Yes, time is something you'll never have back, blah blah. But please explain to me what people would actually be doing with this valuable time saved from traveling? If I have an 8 hour flight or 6 hour flight, I can tell you, odds are I am not going to be doing anything "productive" for society after my plane lands; or for myself for that matter, regardless of how long my flight was.
You... should change your username...
but i think you're also not thinking about ayn rand would say for ayn, production in itself was glorious even if it yielded the maximum profit or efficiency, i'd say that she would hold accomplishments in production in higher regard than making a dollar don't you think that flying as fast as possible is analogous to being as productive as possible?
lol
This is possibly the most mindless post about Ayn Rand I've ever laid eyes on.
1) Everyone on this thread has missed the most glaringly obvious benefit of having more fuel efficient aircraft: increased range. Modern airliners are able to traverse far greater spans of the globe on a single tank of gasoline than ever before, connecting cities directly that once were multi-flight journeys.
2) By increasing fuel efficiency, you reduce the cost of air travel and thus make it accessible to a far grander cross-section of the global population. The number of aircraft in the world is multiples of what it was in the 80s, as is the number of worldwide ASMs and the proportion of global citizens who utilize air transit. Whereas flight was once a luxury reserved for the super-rich, it is now a commodity. Rand certainly would have preferred this state of affairs to a dystopian world where the ultra-wealthy take supersonic hops between countries while the populace remains chained to the ground.
3) The actual change in the average airspeed of airliners is microscopic. The changes in the flight times you listed reflects mostly differences in ATC procedures, the vastly increased amount of air traffic / congestion and route changes. In reality, we are dealing with a delta of a few percentage points.
4) The tradeoff between speed and cost reflects the very real cost of energy. Ideal allocation of our - obviously limited - energy resources is essential. The decrease in airspeed to achieve greater fuel efficiency merely reflects the consumer preference for lower energy costs over time loss. If we truly did value our time as much as you suggest, an existing airline would annihilate its peers by offering more expensive but faster air travel. In reality, study after study have demonstrated that the vast majority of airline customers shop based primarily on price. Hence the dearth of remaining luxury airlines vs. the 60s and 70s.
If this graph reflects your version of air travel suffering from penny-pinching executives, then let me be the first to welcome more frugal innovators.
Oh, and I don't even mention safety improvements, because that just feels too obvious. Nevertheless:
Sooo.... its graph time huh?
+1 SB Northsider.
I also fail to see any value in the OP, but in terms of answering the question what would Dagny Taggart do? She would do it, make the planes more efficient and use that money for additional planes to expand their routes, invest in R&D, create a better customer experience, or maybe use it to higher a skilled executive....all to increase future profits. It doesn't really matter what she would do with it because it would be HER CHOICE and HER CONSEQUENCES.
People talk about how valuable 'time' is and that she should increase the speed because our time is much more valuable than whatever her cost of fuel is. Who are you to force your value of time on me or this airline? If you don't like how fast the planes can get you to A to B, then you may use a competitor who has a faster flight time or find some other means of transportation. I have no right to force you to fly on this airline just as you have no right to force an airline to change it's flight times and schedule. Individual choices and consequences, the rest is just noise.
It is your perception that flying fast is the same as being productive and I disagree.Doing it is not the same as doing it well. (see first paragraph)
Similar to when Galt was talking with Mr. Thompson, this entire debate stems from a disagreement in value. You view the speed of the plane as the highest value, I don't. I view the cheaper price, more efficient and safer airplane as the highest value.
My god. What a beautiful explanation. If I had any silver bananas, I'd give them all to you.
I think most Rand readers take her way to seriously and do not understand that her simplified philosophy cannot really be applied to real life.
Randian ethics are by no means airtight, but that is wholly irrelevant to the lunacy of this post. This has very little to do with ethics and very much to do with simple economics, with which Rand doubtlessly would have agreed.
LOL Rand would have agreed to whatever helped her sell more books and be more 'famous'. She was not a serious intellectual, and agreeing with market economics lends her no credibility. If she understood market economics and their application, it's unlikely she would have been forced to spend her last years on welfare.
There once was a plane that travelled "faster"... the Concorde. Didn't catch on. People would rather go a little slower and pay less money.
And... you know... not die in a roaring conflagration shortly after takeoff.
hmmm, good call, death is a bummer
Then I submit to you that she was writing about entirely the wrong things. Rand was doubtlessly talented with prose, she chose to write on a topic about which she felt strongly. And I think the dozens of faculty at top universities who teach her work would beg to differ about her intellectualism.
I'm being a little harsh, I don't much value 'isms' and that includes objectivism. It was a good framework for thinking, and useful to illustrate some differences between capitalism and communism proper, but pretty much everything after that is very one dimensional.
Easy example of intellectual inconsistency: in Atlas Shrugged one of the central themes is how the tyranny of merit has been replaced by the tyranny of 'pull'....as if no every major industrialist had not exerted influence over the political landscape to shape the laws to their favor? Hardly. Many of the robber barons would not have been able to amass such concentrations of power without support, or at least non enforcement of rules. The easiest example is how John Rockefeller bribed his way out of military service. Love the guy, did great things, but I'm just calling a spade a spade. No one has ever operated completely within the parameters of Randian theory, and doing so (can you say lobbyist) would put them at a severe disadvantage. What she idealized was not realistic, and had no real world application.
Another example: all regulation is bad. Ok. Legalize cocaine and heroine laced baby formulas again. From the standpoint of turning a buck...sure, why not? In the interests of public health....no. Rand's way of thinking is that anyone imposing such restrictions was a communist or some other horror. In a democratic republic, which I'm not sure she understands, people pressured the government for many such laws. So this kills her theory.
The easiest hole in her reasoning is the assumption that violence is the last refuge of the incompetent, and should unly be used in defense. An ironic side note is how many pseudointellectual 'libertarians' who drool over Rand supported the preemptive war in 2003, if it wasn't so pathetic it would be funny. On a more serious note, Rand's only support for a just war becomes "do unto others before they do unto you", making clairvoyance a necessity in foreign affairs. Again, nice in theory, but not how the real world works. While the US has traditionally waited for the other guy to throw the first punch, there are plenty of instances where we've been the agressor, and the ethics support the move. But according to Rand, this did not fly. What about military action against drug lords? The CIA was recently killing off people down in Guatemala who've never interacted with an American, and I'm a huge fan of killing cartels, so I'm not sure what Rand would proscribe.
The virtues she espoused; hard work, honesty, innovation, personal accountability....these are things that have always been promoted in America. It's a good thing that she helped reinforce this. Thing is, she leaves out any concept of the good impact that family, good governance, and charity have. She also completely neglects organized crime, corruption of politics by moneyed interests, and basic psychology.
Think someone once wrote: "Rand would want to deregulate the laws of gravity"
I'm no Randian, but you're being pretty obscurantist here.
I think you and I both realize that people who make statements like "all regulation is bad", they aren't specifically targeting laws that prohibit poisoning infants. Even the most socially left-wing libertarian (outside of, perhaps, a handful of anarcho-capitalists) would favor the protection of basic property rights, which would obviously forbid poisoning children, especially pre-sentience.
A more realistic and reasonable version of this straw man would be: should we legalize hard drugs for voluntary adult users? To the extent that drug use is typically a victimless crime, supplied by underground retail networks with no standards of safety, purity, etc., there is certainly a reasonable argument to legalize drugs for adults.
You mention "public health", and in some ways purport to be the arbiter of the interests of public health. Issues like hard drug use might seem simple to toss out in favor of a basic principle (in this case, that the government should construct regulations "in the interests of public health"), but the principle of your argument is often obscured by the pseudo-tautologies. "Regulations in the interests of public health" sound good when you're outlawing hard drug use, but what about cigarettes? Certainly, smoking isn't in the interests of public health - ought the government intervene here? Overly caloric foods? Soft drinks? Unclear. How about plastic surgery? It's almost always elective and unnecessary, and one could reasonably advance the argument that it wastes skilled healthcare resources. Should we limit/prohibit elective plastic surgery? How about for burn victims? Sex changes? Etc. These issues are a lot more nuanced than your silly examples illustrate, what Rand and others (more eloquently/consistently) argue is that such issues are better left to the free, individualized choices of liberated citizens than by a central authoritarian regime, no matter how righteous or benevolent. Issues related to poisoning, recklessly endangering, murdering, etc. other citizens - especially those incapable of understanding the threats - are rarely a part of their deregulatory discussions. To suggest otherwise is, at best, obtuse.
Again, this is a total misinterpretation of Rand's views. The Randian has a very simple retort to your example: it is precisely central governmental power that permits robber barons or tycoons to lobby regulations in their favor. There can be no doubt that federal and local regulations artificially isolated industries from competition in the late 19th and early 20th centuries. Without the power to regulate autonomously, government wouldn't have the power to curry the favors of the wealthy. As for Rockefeller, compelling by force any individual to perform a job against his or her will is a violation of basic liberties. Conscription is egregious, and certainly no Randian government would require bribery to avoid military service.
That is something of a falsehood that gets propagated by her many detractors.
At the time of her death she had an estate worth approximately $500k. She took the Social Security and Medicare because she paid into it and thought that it was the only way she would ever recover what the government 'wrongfully' took from her. My old man did the same thing and most people would do it too.
Placeat non quo eos provident adipisci vel aspernatur. Molestiae consequatur enim aut. Illum nulla cumque hic mollitia. Laborum molestiae dicta sit ut laboriosam amet. Consectetur impedit rerum nisi et aperiam ad.
Et nobis veniam officia aut culpa fugiat tempora. Pariatur quis voluptas laborum culpa at. Quo earum ipsam sit similique dolor necessitatibus tempora.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Voluptatem cum necessitatibus sapiente sed ut inventore voluptatem. Quod tenetur animi deserunt alias consequuntur. Animi distinctio aliquam omnis unde unde. Nobis neque libero ex ipsum qui est. Voluptatem numquam voluptas itaque aperiam laborum consequatur perferendis.