Yet another very nice piece by Megan McArdle.
Oh, come on, isn’t this just that old right-wing cliché that markets always produce the best outcome? People acting in their own personal self-interest can often make everyone worse off, including themselves.
Collective action problems certainly exist, and that’s one reason we have government. But a collective action problem is not just “something that makes a minority unhappy”; no system makes every single person better off. A true collective action problem is one in which collectively restraining destructive individual instincts can make everyone -- or at least, a substantial majority of people -- better off.
In the airline market, I see no evidence that there is even a large minority of customers who are willing to bear substantially higher costs for the sake of substantially better service.