It’s not for nothing that in David Henderson’s Ten Pillars of Economic Wisdom we find the following observation, coming in at number one: “TANSTAAFL: There ain’t no such thing as a free lunch.” Everything comes with a cost. When people say something to the effect of “Healthcare should be free” (or swap out “healthcare” with anything else you like), they are making an impossible demand. The only thing this demand could mean is “when I receive healthcare, I shouldn’t have to pay for it.” But health care doesn’t become “free” just because you, personally, didn’t receive a bill. Someone else will end up bearing the cost. So what this statement necessarily entails is “when I receive healthcare, it should be paid for by someone else.” Now, very few people would be willing to openly say “When I receive [insert good or service here], other people should have to pay for it, not me.” But advocates of free healthcare, free college, free childcare, etc, are in fact making that claim.
Or at least some of them are. I’d say the “such-and-such should be free” crowd probably falls into two camps. The first camp is made up of people who understand perfectly well that what they’re actually saying is “other people should pay my bills,” but know better than to say that openly. So, they use language like “free”, or perhaps declare the good or service in question to be a “human right,” as a means of sidestepping the no-free-lunch issue. But I also suspect that there are a lot of people who genuinely do think that as long as no bill is received, then something really was “free” in some grand metaphysical sense – manna falling from heaven.
I recently got the impression of someone falling into the second camp when I saw a news story about how Southwest Airlines handles situations with customers who, due to their size, physically occupy more than one seat. Southwest’s policy is to grant the traveler an extra seat or, if need be, an entire row, without an additional charge. This is, as you might imagine, a very popular policy with people who find that they might need the extra space, particularly since with most other airlines if you use two seats, you have to pay for two seats. In the news story, it shows a picture one such traveler posted to her Instagram account, and on that post she included the following caption:
She also gave an interview with Fox Business where she said the following:
“The Southwest customer size policy helps many travelers offset the disproportionate costs that we incur because of needing extra room,” she said.
“And so, it’s not just about physical accessibility. It’s also about financial accessibility.”
I get the feeling this is someone who engages in magical thinking, and really does think the second seat actually is “free.” But, there ain’t no such thing as a free lunch. Just because she’s not paying for the second seat doesn’t make the second seat free – it’s just a question of how the second seat gets paid for.
First, there’s the opportunity cost – the extra seat used by this traveler is now a seat that cannot be used by someone else who also had travel plans. And this runs into another Southwest policy – the fact that Southwest Airlines uses open rather than assigned seating. Because heavyset travelers are able to buy just one ticket but use multiple seats, in cases where flights are full (or multiple passengers use this policy), Southwest simply removes other ticketed passengers from the plane to free up the necessary seats. The story also interviews a mother who, along with her two teen daughters, were bumped from a flight for just this reason:
But during their layover, Southwest Airlines officials informed her that the flight was “overbooked” and they could not board the plane — despite spending $620.72 on tickets.
“Please help me understand why do I have to spend the night without any accommodations in Baltimore because an oversized person didn’t purchase a second ticket,” the exasperated mother said, claiming all of her and the teenagers’ luggage was sent to their final destination in Denver.
She said airline officials told her “It is their right to kick a person out of the plane for the oversized person,” and shared a video of a conversation she had with an airline manager who said, “Even if there are not enough seats, we have to accommodate that customer of size.
“If they need an extra seat, we don’t charge for extra seats,” the manager could be heard telling the woman.
So that’s one way the extra seats being called “free” are actually not free, and how the costs are simply passed onto others. Money is, of course, another way costs can be passed along. Airlines can attempt to work out how often there will be cases of passengers who use two seats but only pay for one and make up the cost of the lost ticket sales by increasing the prices of everyone else’s tickets. In this case as well, the additional seat isn’t “free” – it’ s simply being subsidized by everyone else on the plane.
The caption in the above Instagram post would be more accurate if it said:
Because one way or another, the costs of those extra seats must be paid for. If it’s not paid for by the person using it, the costs must be passed on to someone else. We can’t make this fact go away by simply declaring that things “should” be “free.” There ain’t no such thing as a free lunch, on airplanes or anywhere else.
READER COMMENTS
David Henderson
Dec 20 2023 at 12:41pm
Short version: this sucks.
David Henderson
Dec 20 2023 at 1:42pm
Clarification: the policy sucks. Kevin’s post is spot on.
Matthias
Dec 20 2023 at 10:33pm
The policy seems perfectly fine to me.
It’s not the only possible policy, nor do I know whether it’s an optimal policy or even just a good one? But I’m glad there’s an airline on the market that experiments with it.
The policy is well advertised, so customers can take it into account when they make their purchasing decisions.
Many airlines also allow strollers and children’s car seats for ‘free’. It’s exactly the same situation here.
Or even more extreme, an airline could decide to charge you extra by the kg of bodyweight, or for each bathroom visit (that water that goes down the drain to flush ain’t free to haul around). But they typically don’t do that.
Jon Murphy
Dec 21 2023 at 11:22am
No. They are not the same. Strollers get checked and stored beneith the plane. They are not occupying a seat. Further, if a child is in a car seat and that car seat occupies a seat on the plane, they have to buy a ticket.
gwern
Dec 21 2023 at 1:19pm
It’s a terrible policy because it shifts the fixed cost of an additional seat from the minimum-cost person (with the most control & information over both their travel plans & body weight) to a random person while practically maximizing the cost (by making it unpredictable, nearly impossible to plan for, happening at the very last minute possible, where options to recover are the least, and where additional disasters like lost luggage are most). None of this applies to your other examples like ‘gaining a kg of water weight’ (which would add like pennies of marginal cost).
The example brings this out: they could lose that weight (in the age of semaglutide, tirzepatide, and retratrutide, there is less excuse every day to not do so) so it wasn’t necessary to buy extra seats for their trips; if the fat person had to pay for the extra seats on both trips, they might not have gone at all because the cost exceeded the benefits; if they did go, they could have chosen a cheaper flight or a different mode of transport; if they paid for the seat on the same flight that they did, then the displaced passenger on net would have simply booked a different flight at slightly higher expense and this would have been the passenger who least needed or wanted to be on that flight and could most easily take a different flight.
Now, through absolutely no fault of her own, her plans are all completely screwed up, she may well miss a major event like a funeral or wedding, she will have to pay the highest rates for a last-minute hotel, she may lose her luggage, she is suffering a completely unnecessary level of stress, her next plane ticket will also be extremely high (I hope Southwest at least comped her ticket…), and so on and so forth.
It would be difficult to devise a seating policy for fat people which did more harm.
steve
Dec 20 2023 at 2:52pm
Totally agree with you. I know you didnt want to write War and Peace but the policy is worse than you describe. The big person has the option of notifying Southwest ahead of time they need 2 seats or they can wait until the day of the flight. At the very least you would think they require advance notice so people dont get bumped. Also, think of the possible gaming here. If you are chubby but can live with one seat what stops you from claiming you need two seats ahead of time? The airline then sells fewer tickets. (The wicked part of me wonders if these same people also claim they are entitled to two meals?) It’s their business so they can do whatever they want but it doesnt make much sense. Maybe they know something we dont? (In medicine these massively large patients soak up much more attention and lead to increased costs but we dont charge them extra either.)
Steve
Mathias
Dec 20 2023 at 10:36pm
Even funnier: you are of healthy weight or even skinny, but just claim that you need two seats. How are they policing whether you are actually fat?
(I assume they probably have solved that particular problem, or it just doesn’t occur very often. Not many people like to self identify as fat when they don’t need to.)
MarkW
Dec 20 2023 at 3:54pm
Wow! That’s crazy. We haven’t flown Southwest for many years, and I guess that’s going to continue to be OUR policy.
johnson85
Dec 21 2023 at 11:03am
I might get put on the no flight list if I got stranded in baltimore because a fat person didn’t at least book their extra seat ahead of time.
I’m actually developing an unhealthy dislike of fat people the more I am involved with insurance. It sucks seeing young people struggle to pay for insurance for their whole family and then looking at what’s driving the costs and realizing a huge portion of the costs are driven by people just being obese, often morbidly so, and making no effort to change. Doesn’t matter what resources are offered to them, they’re not interested and don’t seem to care what it costs other people.
It’s lifestyle disease, cancer, and then a smattering of chronic diseases that aren’t lifestyle driven. Most years everything else is a rounding error. Obviously not much to be done about the latter two, but would be nice if the people driving costs through their choices had to bear some of the costs they are shifting to other people.
Ahmed Fares
Dec 21 2023 at 5:59pm
Thomas L Hutcheson
Dec 23 2023 at 8:25am
The question is CBA. Are there tweeks to insurance premia that increase net benefits? And how do we tweak the insurer/provider system to get more CBA into the treatment process?
Ahmed Fares
Dec 21 2023 at 6:15pm
Obese people have lower life expectancy. Public and private pension plans pool obese and thin people together, which means the obese are subsidizing the thin. A few “free” plane seats is not doing much to offset that.
Thomas L Hutcheson
Dec 23 2023 at 8:32am
More generally, I’m not sympathetic to the TANSTAAFL framing.
That is true only if we start from an optimal system. If TANSTAAFL means that absolutely no individual can be harmed by a change then no change from any arbitrary status quo is possible. But if we consider net positive changes, then TISATAAFL.
Jon Murphy
Dec 23 2023 at 12:06pm
No. The fact there are costs in cost-benefit analysis means there is no free lunch. Costs do not exist only at Pareto optimality.
You always, always, always have to give up something to get something. If not, there is no economic problem and no need for cost benefit analysis. The fact the benefit exceeds the cost doesn’t imply the lunch is free. You still have to give something up.
Thomas L Hutcheson
Dec 24 2023 at 7:43am
Sure but that means that “TANSTAAFL” to any change in the state of the world, hardly worth such a long acronym. 🙂
Jon Murphy
Dec 24 2023 at 12:10pm
Correct. Thus the importance of economic understanding. Since that unfortunate event in the Garden of Eden, humans have had to deal with scarcity.
Dick King
Dec 23 2023 at 3:30pm
Okay …
If the flight is overbooked, why not bump people who need two seats first? You can inconvenience one person, or two people who need one seat each.
-dk
Comments are closed.