Alfred Kahn, RIP
By David Henderson
Alfred Kahn, the Cornell University economist who, as head of the Civil Aeronautics Board, got airline deregulation moving, died yesterday. I won’t try to tell you what you can get from the various news stories today. Instead, I’ll tell you the highlights I remember from this man’s productive life.
. Fred (that’s what people called him) wrote the article on airline deregulation in the first edition of my encyclopedia.
. He had a great line when he became chairman of the now-defunct CAB: he said that he thought of airlines as “marginal costs with wings.”
. I remember reading him saying (I can’t remember where but I’m guessing it’s in Martha Derthick’s excellent Brookings book, The Politics of Deregulation), that when he came to the CAB, instead of thinking like a lawyer, he thought like an economist. Specifically, he didn’t ask, “What’s legal?” or “How do we enforce the law?” Instead, he said, “What’s the economically efficient thing to do?” and then, and only then, asked, “How can we do this within the law or, if we can’t, how close can we come within the law?”
. He was promoted from chairman of CAB to chair of President Carter’s Council on Wage and Price Stability. At one point, he wanted to warn of impending recession but Carter told him he couldn’t use the word. So he substituted the word “banana,” which, of course, brought even more publicity to his warning.
. He was a delight to work with. The first draft of his piece for my Encyclopedia, originally called The Fortune Encyclopedia of Economics, was good but was long-winded and too flowery. First, I, and second, my wife, an editor, “flattened” his piece, taking out a lot of the wordiness and a little bit of his personality. He complained but only a little (in those days, we did it by first-class mail) and seemed ultimately to like the result.
HT to Tyler Cowen.