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Comment by pmg | Hacker News Reader

It’s a spectrum not a binary.

1970’s Airline breakups were very beneficial to customers with lower prices and more routes popping up virtually overnight (though read “Hard Landing” if you want a more nuanced take), 1980’s AT&T breakup was somewhat beneficial in that long distance and cell rates went down but local rates went up (see “The Deal of the Century”), 1990’s California Energy breakups were basically a net negative for customers allowing energy market speculation and manipulation (“Smartest Guys in the Room”), and in a handful of examples like the Soviet Union or South Africa, deregulation lead to outright collapse of essential sectors in banking, agriculture, and energy and set society/customers back decades (“Sale of the Century”/“After the Party”).

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The airlines weren't broken up in the 70s. They were deregulated and allowed to add or remove routes and set fares as they saw fit. Less government oversight in this case turned out to be a good thing for consumers.

That’s a literal interpretation, but it misses the point of “Hard Landing”. The book argues that while the airlines weren’t monopolies in name, they acted like a government-sanctioned monopoly under the Civil Aviation Board. The Airline Deregulation Act was essentially meant to break up this cartel, and was pushed through despite heavy resistance from those same airlines.

They didn’t want the Civil Aeronautics Board dismantled because it protected their monopolies over routes and guaranteed income, and they feared new entrants would disrupt their control.

So, while the airlines weren’t formally ‘broken up,’ the airline business, the route monopolies, and CAB were which directly led to the dissolution of companies like Eastern and Pan Am, and the creation or expansion of new entrants like Frontier, JetBlue, and Southwest which were previously prohibited from competing in these markets.

In the short term? The flying experience is less than miserable now and the costs are going up. I see a lot of articles out there talking about how prices have fallen, but I haven't actually seen the data. The one article that actually cited prices as examples was obviously wrong about those prices, had cherry-picked them or used the laughable quoted prices you see to sucker you into clicking (which then triple as you go through the actual process of getting the ticket). Looking at BTS stats [1] the price appears to be going down somewhat since 1995, but it then goes on to say that the price only covers the base fare, not extras like baggage and the like. We all know by the time you actually fly the cost has gone up considerably. I was forced to pay 150$ for a bag on a recent flight (not even over-weight), that price isn't listed in the base fare anymore but it used to be part of the ticket. Looking at the BTS numbers I see an industry that has had 30 years of technology improvements and customers that aren't seeing that benefit.

[1] https://www.bts.gov/air-fares

(edit) I said 'DOT' when I meant 'BTS' Bureau of transportation Statistics

i'd argue most of the annoyance is tsa type things... no water of x amount... stuck in security line arrive an hour early... disrobe and pull everything out now put it back on...

this is all gov regulation

This is the natural result of businesses only fighting the regulations that actually hurt them and quietly letting the bad ones that help them stay. They have no incentive to lobby to get rid of that silliness. In fact, the worse the airport experience is because of someone other than them the easier it is to give us the worst experiences of our life and charge us for it. It shows who actually has representation, and who doesn't. We don't need less govt regulation, we need better representation.

If enough people care about a thing, it will filter up to representation. If not, it won't. It's not bad representation if no one knows about it.

The phrase "jet set" referred to the elite able to afford airfare. Now everyone can

Looking at 1995 prices is not relevant to the question: those are post deregulation prices

I believed you missed my point about 'in the short term'. My argument, backed by the linked data, was that for the last 30 years the prices actually look flat when you factor in the lost services like luggage. (is that actually a service?) Combine that with the completely horrific experience and there is a clear argument that the overall value proposition for consumers is tanking, badly. Deregulation happened in 1978. The trends I pointed out are lined back to 1995. the consumer benefit looks like it is lasting less time than the detractors to me so 'in the short term' is, I think, a good discussion point.

>Soviet Union … deregulation lead to outright collapse of essential sectors in banking, agriculture, and energy

You literally named one of the most successful sectors of economy in ex-USSR. Banking sector in most former republics did effectively a greenfield start becoming the most technologically advanced in Europe - if they were able to expand to Europe, they would crush it.

Agriculture? Changed hands from state to private, productivity and yield increased, pre-war exports are all-time high.

Energy? 1990s weren’t great in some republics like Kazakhstan, but having some private companies in the business definitely helped. Not enough is being done on green energy, but that is a different story.

> most successful sectors of economy in ex-USSR. Banking sector in most former republics did effectively a greenfield start becoming the most technologically

Wasn’t it mostly controlled by foreign banks, though?

Of course not. You can find the list of top banks yourself. Russia, Ukraine - there are just few of them in the top.

> and in a handful of examples like the Soviet Union or South Africa, deregulation lead to outright collapse of essential sectors in banking

That sounds more like due to corruption. Also we are talking about breakups not deregulation.

> Also we are talking about breakups not deregulation.

In a way they were breakups, in the USSR at least, since all almost all sectors of the economy were fully controlled by government monopolies.

Not exactly. There was central planning, of course, but it was not one big corporation - it was extremely heavy regulation, basically telling different state-owned businesses what to produce, how much, where to sell it and where to get supplies. This is the reason why after privatization there were many companies in most sectors, not just one big monopoly. They were privatized independently.

Well, yes, they were effectively subsidiaries of that one big corporation.

I wouldn’t be surprised at all if some divisions of a a company like Stellantis have significantly more autonomy than any of the car companies in the USSR.

No, you are wrong, they were not. Centralized strategic planning did exist in USSR between 1930s (end of NEP) and 1950s (death of Stalin). The economic reforms of Kosygin shifted planning to enterprise level and the central planning authority - Gosplan - only coordinated the plans of each enterprise. In the last 30 years of its existence USSR was neither planned nor market economy, but rather something in between. They got incentives wrong, focusing on volume and revenue rather than on quality, innovation and profits.

Weren’t Kosygin’s reforms mostly reversed after a few years?

Could consumers goods companies adapt to consumer demand by freely increasing/decreasing production? Production targets were still a thing, weren’t they?

e.g. if the production target for the Lada factory was 1000 cars and they were allocated enough supplies for that (but there was enough demand so that 10000 could be sold profitably in the same period) would they be able to freely scale demand or would they be stuck with plan enforced on them by the central “corporate” office?

Again, plenty of modern companies have more control of their production targets, pricing, expansion etc. while being subsidiaries of major corporations than most Soviet “companies” generally did.

> 1990’s California Energy breakups were basically a net negative for customers allowing energy market speculation and manipulation

This was basically a regulatory failure. They broke up the energy market on paper but without making it feasible for new entrants to actually enter the market, which is the sine qua non of making this work. So then the incumbents purposely constrained generating capacity to spike the prices.

You didn't mention the biggest US breakups, Standard oil, Bell Systems (ATT) and the railways

That sounds exactly like a binary, as hinted at by a sibling comment: Breakup of a company monopoly (always good for the consumer) vs. Breakup of a government monopoly (potentially bad for the consumer)

No, because of the part on how local phone rates went up when AT&T was broken up.

There's no "always" here, the world is not that simple.

Breaking up a large company is often going to be good for some sets of customers, bad for others.

In that case, it mostly just created local monopolies. You still didn’t have a choice for local service unless you moved several hundred miles away. From the consumer’s perspective, we just replaced one monopoly with another.

> because of the part on how local phone rates went up when AT&T was broken up.

Isn't that caused by the "last mile" problem? Even with the split there was always only one company in control of local infrastructure and from what I understand they could even block newcomers from installing their own, citing concerns over possible service interuptions and various kinds of interference. I think Google Fibre even went through several experimental ways to get its infrastructure in place just so it could avoid dealing with any of that.

deregulation and breaking monopolies are not the same things though

> Soviet Union [..] essential sectors in banking, agriculture, and energy and set society/customers back decades

That was pretty much unavoidable though. The old Soviet system and institutions were unsustainable and couldn’t coexist with “capitalist” institutions. There was no banking sector (at least how we understand it) to begin with, any company producing consumer goods, electronics, cars etc. collapsed overnight because they were producing garbage products that nobody needed after foreign substitutes became available.

Basically there were only two choices, sell off everything remotely useful to foreign companies and hope that they modernize/fix it or allow the local oligarchs to privatize/steal everything. Arguably the countries that picked the first option came out ahead (but are now stuck with entirely foreign owned banking, telecommunications. Retail sectors with much of their industry either directly foreign owned or incapable of doing anything but subcontracting)

e.g. Belarus tried to hold on much longer, instead it got stuck where it was for several decades with little progress. The Baltic countries crashed and were close to societal collapse for a few years but have been on an almost continuous upwards trend since they recovered.

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