Waiting for the Next Fred Kahn

It is unlikely there has ever been a more important figure in the history of regulatory policy than Alfred Kahn. As I noted in this appreciation upon his passing in December 2010, his achievements as both an academic and a policymaker in this arena where monumental. His life was the very embodiment of the phrase “ideas have consequences.” His ideas changed the world profoundly and all consumers owe him a massive debt of gratitude for reversing the anti-consumer regulatory policies that stifled competition, choice, and innovation. It was also my profound pleasure to get to know Fred personally over the last two decades of his life and to enjoy his spectacular wit and unparalleled charm. He was the most gracious and entertaining intellectual I have ever interacted with and I miss him dearly.

As I noted in my earlier appreciation, Fred was a self-described “good liberal Democrat” who was appointed by President Jimmy Carter to serve as Chairman of the Civil Aeronautics Board in the mid-1970s and promptly set to work with other liberals, such as Sen. Ted Kennedy, Stephen Breyer, and Ralph Nader, to dismantle anti-consumer airline cartels that had been sustained by government regulation. These men achieved a veritable public policy revolution in just a few short years. Not only did they comprehensively deregulate airline markets but they also got rid of the entire regulatory agency in the process. Folks, that is how you end crony capitalism once and for all!

Who could imagine such a thing happening today? It’s getting hard for me to believe it could. The cronyist cesspool of entrenched Washington special interests don’t want it. Neither do the regulators, of course. Nor do any Democrats or Republicans on the Hill. And all those self-anointed “consumer advocates” running around D.C. scream bloody murder at the very thought. All these people are happy with the regulatory status quo because it guarantees them power and influence–even if it screws consumers and stifles innovation in the process.

And so, when I reach my most pessimistic depths of despair like this, I go back and read Fred. I remember what one man accomplished through the power of ideas and I hope to myself that there’s another Fred out there ready to come to Beltway, shake things up, and start clearing out the morass of anti-consumer, anti-innovation regulations that pervade so many fields–but especially communications and technology.

I could cite endless wisdom from his 2-volume masterwork, The Economics of Regulation, but instead I will encourage you to pick that up if it’s not already on your shelf. It will forever change the way you think about economic regulation. Instead, I will leave you with a few things from Fred that you might not have seen before since they appeared in two obscure speeches delivered just a year apart to the American Bar Association. Just imagine being in the crowd when a sitting regulator delivered these remarks to a bunch of bureaucrats, regulatory lawyers, and industry fat cats. Oh my, how they must have all cringed!

Remarks before the American Bar Association, New York, August 8, 1978:

I believe that one substantive regulatory principle on which we can all agree is the principle of minimizing coercion: that when the government presumes to interfere with peoples’ freedom of action, it should bear a heavy burden of proof that the restriction is genuinely necessary…

Remarks before the American Bar Association, Dallas, TX, August 15, 1979: