Sunday, January 02, 2011

Alfred E. Kahn, RIP

Alfred Kahn passed away on December 27. His Washington Post obituary is here.

Fred, a lifelong Democrat, was, of course, the person most responsible, as President Carter's Civil Aeronautics Board Chairman, for deregulating the airlines in the late 1970s. He also served as President Carter's anti-inflation czar, as well as Chairman of the New York Public Service Commission.

Professor Kahn was also an eminent scholar, especially of public utility regulation. His two volume treatise, The Economics of Regulation: Principles and Institutions, published in 1970-1971, remains a classic in the field of regulatory economics.

Much more could be said about Fred's contributions to economics, his honors, and his positions. Here I just want to note - very proudly – that, from its inception, Fred served as a member of the Free State Foundation's Board of Academic Advisors. And, for Fred, it was not just an honorific title. He took the role of "academic advisor" seriously. He would often react to drafts and pieces published by me with cogent comments, always offered constructively. I will be forever grateful for what I learned from him, and for his willingness to serve on FSF's Board of Academic Advisors.

Tempting as it might be, this is not the place to use Fred's vast knowledge and writings to argue for or against any particular current public policy issue. But it is not out of place - and I think Fred would wholeheartedly approve – to remind ourselves of a central tenet of Fred's teaching, one that became engrained in him through his experience with airline deregulation and as a telecom regulator. In a famous 1984 article in Telematics entitled The Uneasy Marriage of Regulation and Competition, Professor Kahn stated there is "no rational half-way house between thorough regulation and free competition." And, then, he enjoined: "Between regulated monopoly and unregulated competition, regulated competition represents the worst of both possible words."

As they undertake their duties as "regulators" in today's technologically dynamic, increasingly competitive communications marketplace, FCC commissioners and state public utility commissioners could benefit greatly from taking Fred's teaching on this score to heart. As he put it in a1998 book, Letting Go: Deregulating the Process of Deregulation, to avoid the above-described "worst of all possible worlds," it is absolutely necessary for regulators to "let go" as competition emerges. Federal and state regulators should be handed a copy of Letting Go at the same time they remove their hands from the Bibles upon which they swear their oaths of office.

For those who want to know more about Professor Kahn's impact and influence on regulatory economics, and communications policy, but who don't have time to read his original works, I commend to you the first chapter in FSF's 2009 book, New Directions in Communications Policy. In Lessons for Modern Regulators from Hippocrates, Schumpeter and Kahn, Professors Dennis Weisman and Glen Robinson explain the relevance Professor Kahn's teaching to proper resolution of today's top communications policy issues. Suffice it to say here that, in no way, is Fred out of place in such exalted company.

I know in the not too distant future I will have to remove Fred's name from the list of FSF's Board of Academic Advisors. But, for now, I am going to leave it there as I remember Fred and his contributions to the economics profession, to the field of public utility regulation, and, most of all, to the country.

For now, Alfred E. Kahn, RIP.