Charles Goyette has written a piece on the United Airlines debacle: The Small Print vs. The Big Issue.
I have been both surprised and disappointed to discover that so many of the people I esteem as great defenders of free people and free markets have written to defend United’s right to deny a seat to the holder of a paid ticket. The “involuntary denied boarding” clause is in the contract, they say, and it rules. It is in there fair and square, they say, and the passenger should have known it.
Nobody books a flight and pays for it and is then told by the airline that it will honor the ticket only when it deems it convenient. But that is the practical effect of the “contract of carriage” fine print.
Before getting to the big question, a couple of thoughts. First, United did not follow its own “small print” in this case, at least not from what I have read. Second, anyone who flies with any regularity knows that flights can be oversold and volunteers are requested. It isn’t merely a question of the “’contract of carriage’ fine print.” Fliers know this happens without ever reading the contract. Call it “custom.”
Goyette describes the overbooking practice:
Some explain in needless detail all the reasons that airlines overbook flights. Those reasons are compelling for airlines, but they are a needless and irrelevant sidebar.
Of course, this is also beneficial to the travelling public – as airlines can ensure full flights with this practice, tickets prices, on average, are lower than they otherwise would have been.
Now to the big question: if not the contract, what should govern? A contract represents an agreement between two individuals; it gets no more “libertarian” than this.
What should “great defenders of free people and free markets” suggest instead of the contract?
Of course, custom and culture can govern – and much of our lives are “governed” this way. Not perfectly libertarian, but beneficial if one wants to minimize or avoid the next possibility.
Alternatively, a government can govern: regulations, laws, legislation, etc. Completely non-libertarian.
My fellow free-marketeers are correct that United Airlines only hurt itself by its thuggish behavior.
Sure, some contracts are burdensome, onerous, etc.; some companies display thuggish behavior. If this is overly so, markets tend to resolve the issue. As has happened in this case.
What has happened to United is a huge victory for the free market – the discipline was swift and sure, and my guess is that it isn’t over.
In the meantime, my guess is that the bureaucrats are working on “regulations” to address this issue. Is this really preferred?
So I ask again, if not the market and contract providing regulation and feedback, what?