Re: [Futurework] Italy and the Euro

[Ed Weick]

Harry, You said:   Perhaps we should look at the number of air carriers that are not under bankruptcy protection.   The free market (when it exists) tosses out the companies which fail to supply the best service at the cheapest price.   Either they must shape up, or they are discarded, thereby rewarding the companies that are providing good service. The large airlines enjoyed an ongoing monopoly until deregulation.   Then, instead of air travel being the choice of the privileged, whose trips were often paid for by their companies or by the government – the skies opened up to the great unwashed.   Ed (me): Let's look at the situation realistically, Harry.  Even with relatively low air fares, the number of people that will fly (the market) is limited.  The costs of providing the big machines that fly people and the human capital needed to operate those machines are enormous.  The advanced planning to provide those machines and people is often over decades.  I believe that the term applied by economists, at least when I was going to school, to that kind of situation is "natural monopoly".  There may be an allowance for a certain amount of competition, but whoever is in charge has to be careful not to allow too many competitors into the field.  If a large airline goes down the tube, huge capital and human costs go down with it.  It's not like medieval wool merchants competing against each other in adjacent stalls.   An example: Canada once had a single large national air carrier, a Crown corporation, Trans Canada Airlines which became, and still is, Air Canada, but now privatized.  At one time, back in the sixties, there was a lot of debate about whether a private carrier, CPAir, later simply 'Canadian', should be allowed to compete with Air Canada on national routes.  It was allowed to do so.  When I was doing a lot of flying all over Canada in the 70's and 80's, I flew Canadian whenever I could.  It was far more fun than stodgy old Air Canada.  But Canadian, as a national and international carrier, went belly-up.  I can still want to fly it, but it's no longer there.  Nor are the pilots and stewardesses who worked on it.  Oh sure, some got jobs on Canada 3000 which took my family and me to Britain and Ireland a very few years ago but is now defunct, and some got jobs on Westjet, the latest national upstart, but the point I'm making is that it's a limited market and the amounts of capital, physical and human, required to operate in it can be huge and can therefore be vulnerable to upstart competition.  It can't therefore be left to the same market forces that apply to people selling ducks, chickens or celery at the local farmers' market.  It's not the same kind of thing.  But God bless you for reminding us of the economics of the 19th Century.   Ed ----- Original Message ----- From: Harry Pollard To: 'Ed Weick' ; 'Brad McCormick, Ed.D.' Cc: 'FUTUREWORK (E-mail)' ; 'Cordell,Arthur: ECOM' Sent: Sunday, June 05, 2005 6:05 PM Subject: RE: [Futurework] Italy and the Euro Ed,   Perhaps we should look at the number of air carriers that are not under bankruptcy protection.   The free market (when it exists) tosses out the companies which fail to supply the best service at the cheapest price.   Either they must shape up, or they are discarded, thereby rewarding the companies that are providing good service. The large airlines enjoyed an ongoing monopoly until deregulation.   Then, instead of air travel being the choice of the privileged, whose trips were often paid for by their companies or by the government – the skies opened up to the great unwashed.   I still hear complaints by those favored people who wish the old days were back. It’s not “regulations” that deter crooks but the laws that punish them.   That’s why there is no crime.   However, the blame must really be attached to the owners of Enron who allowed their employees to play fast and loose with their property.   Just got back from Vegas where my #3 daughter Wendy (who won earlier the $25,000) is still winning – about $5,000 over the four days. Two of them were jackpots, so she had to fill out IRS forms. I watched her work from afar (she doesn’t like others watching her).   She played the quarter slots until she had about $120. She then went to the dollar machines and played herself down to about $30 whereupon she got a jackpot of $1,440. She signed the IRS form, collected her money and deposited it in her bank.   Anyone who comes to Vegas I would advise booking at the Orleans Hotel. The bedrooms all have a little living room attached compete with a sofa and armchairs. Cost - $59.00 a night.   The outside valet area is crowded with cars. Maybe 6-7 valets are busy parking them. We went to the Flamingo and had breakfast one day. One egg was $3.85, two eggs $5.85, a sausage another $3. We learned that the Flamingo (where I had stayed in the past) now charged $199 a night for their ordinary rooms.   Outside there were two bored valets and two cars.   I decided the market was operating well.   Harry   PS. I wish I knew how she does it!   ******************************* Henry George School of Social Science of Los Angeles Box 655  Tujunga  CA 91042 818 352-4141 *******************************     From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of Ed Weick Sent: Sunday, June 05, 2005 5:18 AM To: Brad McCormick, Ed.D. Cc: FUTUREWORK (E-mail); Cordell,Arthur: ECOM Subject: Re: [Futurework] Italy and the Euro   > Perhaps no idea is grand enough to > withstand the withering, relentless assault of  The New American Dream of > universal free-fall economic devolution aka deregulated free > or at least all-consuming markets. Not so sure of this.  I believe there is a growing skepticism about deregulation - witness the number of air carriers under bankruptcy protection and the Enron/Worldcom etc. messes.  Several countries, major economic players like China and Russia, are not buying into the "New American Dream", which isn't so new and has indeed been around long enough to develop a lot of tarnish.  And one has to wonder whether the "Dream" really is about free, open, deregulated markets.  What the Americans seem to be pushing is markets amenable to their control, and not something that arises out of some form of multinational consensual process.   Ed   > Ed Weick wrote: > > > Almost everything you read about the EU these days suggests a lot of > > disenchantment with the leadership and a fear of Turks and Polish > > plumbers.  The EU is a grand idea, but grand ideas don't always put > > bread on the table or protect your special interests. > >  > > [snip] > > I agree that the EU is "a grand idea".  I am reminded of > a certain definition of Europe: > >     "The struggle against everything whose only claim to >      dignity is its materiality, to refuse to be merely >      a passive and determined element in the order of Creation this >      seems to me the primordial virtue which transformed >      an Asian peninsula into Europe" - Carlo Schmid > > Perhaps no idea is grand enough to > withstand the withering, relentless assault of  The New American Dream of > universal free-fall economic devolution aka deregulated free > or at least all-consuming markets. > > In any case, even if the Euro banknotes are not as esthetically > appealing as some of the currency they replaced, the U.S. Treasury > would, I think, do well to try to imitate them.  America's > recent bank notes look like something seen thru a > distorting lens.  Our old banknote designs has no > esthetic merit, but at least all the parts of the design were > [size-wise] in a kind of balance. > <http://www.ellopos.net/politics/eu_schmid.html> > \brad mccormick

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