Trends

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Most of Britain's major airports are owned and operated by the national government, and nearly all others by regional or local governmental units. Prime Minister Margaret Thatcher's Conservative administration, however, has proposed "to transfer as many as possible of Britain's airports to the private sector." But the government's current privatization plan envisions transfer of the airport system (or a good chunk of it) as a single entity to a single private operator. Such a scheme is flawed, Barrett argues, because it "would merely replace a public sector organization by a private sector one." Barrett instead proposes that airports be sold individually (or, in cases where an airport could not fetch a buyer, be contracted out to the lowest bidder), thus allowing for the possibility of multiple operators in the market.

Barrett points out that in Britain, airport charges (as a percentage of an airline's operating costs) are considerably higher than in the United States, where airports are run on a more commercial-like basis. He suggests, that under competitive pressures, these costs would be pushed downward, with the passenger enjoying the passed-on savings.

Barrett buttresses his case for competition with evidence from across the Atlantic. He notes that under US airline deregulation initiated in 1978, new carriers have developed separate operations in competition with main airports. In Chicago, for example, Midway Airlines operates out of the well-located Midway Airport rather than super-busy O'Hare, taking advantage of Midway Airport's lower congestion to offer briefer layovers for connecting flights. And People Express avoids the congestion of New York's La Guardia and JFK airports by operating out of Newark, instead, and the airline similarly avoids busy National and Dulles airports in the Washington, D.C., area by using the less-busy Baltimore-Washington International Airport.

It is ironic that in Britain, where the national government is considerably more involved in the airport business than is the US government, the focus of the debate over airport operation has already progressed to how best to privatize the nation's airports. Though US airports are increasingly recognized as viable commercial enterprises, full privatization has yet to be seriously considered within the mainstream debate.

SALINE SOLUTION

A recent finding in the medical arena illustrates the danger of government regulations freezing in place information that can change as we gain more knowledge. The subject is salt.

For some years the wisdom of such authorities as the American Heart Association has been that people, especially people with high blood pressure (hypertension), should cut back on salt consumption. Self-styled consumer groups like the Center for Science in the Public Interest (CSPI) have in turn used this wisdom to argue for government action to change consumers' seasoning habits. So far they've been unsuccessful, and it looks like consumers are the better for it.

What those who are sour on salt now have to contend with is new data casting doubt on the wisdom that the path to cardiovascular disease is paved with potato chips, soy sauce, and canned anchovies. Scientists recently analyzed data collected on over 10,000 adults, charting the relation between their blood-pressure profiles and 17 nutrients. As the scientists reported in Science magazine (June 29), regardless of the definition of hypertension and the demographic variables controlled for, those with hypertension tended to consume less sodium than their counterparts with normal blood pressure. In fact, they noted, "Subjects reporting low-sodium diets are at two or three times greater risk of being hypertensive than those who report a high sodium intake."

The authors of the study cautioned that "these findings do not prove causality." But the findings certainly undermine the arguments of the CSPI, which should (but probably won't) be embarrassed. Elizabeth Whelan of the American Council for Science and Health told Reason that the CSPI's logic is that if people ingest more salt than they need, that's inherently bad. Their campaign has even resulted in the Agriculture Department and the Food and Drug Administration issuing publications warning about salt and moving to impose mandatory sodium-content labeling requirements on producers of packaged foods. "It's typical of the logic of the public-health establishment," she noted.

For individuals, the study's findings should mean two things. The first is a healthy skepticism of the government's capacity to offer true consumer protection-if salt regulations were now in place, history tells us it would be mighty difficult to undo them in the face of new data linking higher salt consumption with lower blood pressure. The second is relief that, as our knowledge grows in this area, individuals are still free, at least here, to make their own choices and come to their own conclusions without depending on the ostensible kindness of strangers in Washington.

STATES OFFERING SECURITIES DEREGULATION

Deregulation's breezes are blowing not only in Washington but in some state capitals, as well. One by one, some state governments are relaxing-and, in some cases, ending altogether-their regulation of new stock offerings.

According to a recent article in Business Week, the rationale for much state regulation is the so-called merit review. At the federal level, the Securities and Exchange Commission (SEC) bases its regulation on a disclosure process that assumes investors can make their own decisions if they have sufficient information. The architects of state merit review, however, have not taken so optimistic a view of investors' savvy. They have given state officials the authority to pass judgment on whether securities offerings are "fair and equitable" by looking at conflicts of interest, the securities' proposed price, management's experience, and other factors.

This paternalistic idea has a growing number of critics. Norman Fosback, editor of New Issues, pointed out to Business Week that merit review, if it actually offers any protection of investors, protects buyers of new offerings-but not investors who want to buy the stock "two minutes after an offering has taken place," when the stock price "is likely to be higher."

Moreover, Fosback contends that merit review doesn't do much good even for investors purchasing new offerings. On the contrary, it often deprives them of some very good opportunities. For example, Massachusetts authorities initially forbade the sale of shares of Apple Computer, Inc., when it first went public in 1980, even though it was already an operating company and it had a product, revenues, and earnings. As Edward O'Brien, president of the Securities Industry Association, wrote last year in a letter to Illinois state senators, merit review "unjustifiably increases the cost of raising capital and provides little, if any, increase in investor protection."

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