A Conversation With Alfred Kahn

This program is the second event in the Institute's "Conversations with Aviation Leaders" oral history project on the airline industry and was recorded at the Cornell University Media Center in Ithaca, New York. We hope eventually to cover all phases of the industry's history after the 1960s, which is where a prior Columbia University project ended some years ago, but we are continuing the first phase of the program with a focus on the events, law, and public policy issues surrounding the emergence of U.S. airline deregulation in the 1970s.

We are delighted to have two distinguished guests as interlocutor and interviewee respectively. Our interlocutor, as she was during our first interview with Professor Michael Levine, is Dr. Dorothy Robyn, Principal of The Brattle Group Consultancy in Washington DC.

Our interviewee, Professor Alfred E. Kahn, is widely regarded as the father of U.S. airline deregulation. He is currently the Robert Julius Thorne Professor of Political Economy, Emeritus, at Cornell University. Back in the late 1970s, he was Chairman of the Civil Aeronautics Board as deregulation dawned, and the story of how he steered this classic instrumentality of regulation toward a path to its own oblivion is a central focus of this interview.

Professor Kahn received his bachelor's degree, summa cum laude, and his master's degree from New York University, and earned his doctorate in economics from Yale University. Following service in the US Army, he served as Chairman of the Department of Economics at Ripon College in Wisconsin, and then moved to the Department of Economics at Cornell, where he also served as Dean of the College of Arts and Sciences.

Professor Kahn's range of public service is staggering, and indeed one rarely if ever hears any more of the kind of individual that he is and was, a private man who many, many times stepped into the public service for periods of time to serve on boards, agencies, and commissions that promoted some aspect of the public welfare in a market economy. From the President's Council of Economic Advisors to the National Commission for Review of Antitrust Laws and Procedures, from the Governor of New York's Fact-Finding Panel on Long Island Lighting Company's Nuclear Power Plant at Shoreham, Long Island to the New York State Council on Fiscal and Economic Priorities, from the National Governing Board of Common Cause to the Chair of the Blue Ribbon Panel to Study Pricing in the California Electricity Market, Fred Kahn has been busy critiquing and shaping how government can and ought to regulate the marketplace.

He is the recipient of six honorary degrees and numerous awards, including Yale University's Wilbur Cross Medal for Outstanding Achievement, the J. Rhoads Foster Award for achievements in economic regulation, and, in the field we focused on in this conversation, the L. Welch Pogue Medal for Lifetime Contributions to Aviation, which he received in 1997.

Professor Kahn has published widely in the field of economic regulation and deregulation, including works with mischievous titles such as Whom the Good Would Destroy, or How Not to Regulate, and such seminal studies as The Law and Economics of Antitrust Policy and The Economics of Regulation. He has contributed his share of aphorisms to the airline industry which, along with telecommunications, has been one of his driving passions as an economist. When Airline Business, the industry's version of Fortune magazine, culled its great aviation quotations, it had several Kahnisms, including the preternaturally optimistic:

"People Express is clearly the archetypal deregulation success story and the most spectacular of my babies. It is the case that makes me the proudest."

And the transcendent:

"I really don't know one plane from the other. To me they are just marginal costs with wings."

Alfred Kahn is a legend in the airline industry and for the next few hours, he will be speaking with us about how he played an historic role in changing that industry forever.​