14A064 Boneyards by Jim Davies, 12/16/2014    

The movie Con Air approaches its climax in the aircraft graveyard at a desert airport, where convicts under transport had a fine old battle with marshals out to recapture them, and the scene reminds viewers that when an airplane has reached the end of its useful economic life, it's often placed cheek by jowl with others in such a place, awaiting breakup.

That's rational; the craft have earned their keep, but when demand for them ceases, their price falls to scrap value only and some entrepreneur may be able to make a buck or two.

My first encounter with the trade was in England in 1946. My father was driving us out of Chester past a wartime airfield, and there appeared the astonishing sight of many hundreds of bombers, packed close like sardines on the tarmac and grass, wings overlapping; Liberators, Manchesters, Lancasters, Wellingtons, the lot. After having devastated much of Germany, each member of this amazing fleet had made its final flight. During the next few years they were broken up, and hundreds of small stores throughout the country, a bit like Radio Shacks, retailed all manner of electric and electronic marvels for enthusiasts to cannibalize into something useful.

More recently, free enterprise has done something even more imaginative in Sweden, with a Boeing 747 that had become too expensive to fly in the usual way, more recent models being cheaper to fuel and maintain: the new owner turned it into an hotel. Engines were removed along with much of the control electronics, and the whole cabin interior was given a complete makeover, and the result is the Jumbo Hostel. It has 79 beds in various room combinations and prices compete well with motels nearby; none is nearer to Arlanda airport, which serves Stockholm. Its cafeteria is open to non-residents. The only glitch was that permission had to be obtained from the government of Sigtuna, the town on whose land it sits; there's long been a shortage of motels near the airport so those tin gods graciously agreed.

So the principle and practice are plain; as the market value of something approaches zero, it is dismantled in some way so as to optimize use of its components. Nothing unfamiliar there. This applies also to companies, enterprises that have for some reason ceased to yield a return to shareholders. Perhaps technology overtook it; the carriage trade could not compete with the motor car for long. Or perhaps a company is just badly managed. But such assets as it does have can be bought up by someone smart enough to see a value in them, and a final profit is made; as Maître Cuisine Jacques Pépin often says, he "never lets anything go to waste."

However, sometimes this happens in the teeth of scorn and hostility from government and its junkies, for when giving a failing firm a decent burial, its employees may have to be let go; and ex-employees vote. There's the problem. The healthy process of weeding out waste is interrupted or even prevented, by voters. Example: the USPS.

In the coming zero government society this will be impossible, for there will be nobody for voters to vote for, who could interfere with such voluntary exchanges; and there will as it begins be a massive number of wasteful entities to be dismantled for their scrap value. In A Vision of Liberty I imagine myself the elderly owner of a recycling company that acquires land on which poison gas has been stored by the former government; nobody else wanted it so I got it for free. There was then the cost of disposing of the WMDs, after which we had some prime real estate ready to develop as housing, for a very satisfactory profit.

The biggest upheaval will be that of people. I reckon there are about 40 million working for the government directly or indirectly (as employees of contractors, mostly engaged in government work.) All of them will need to change jobs. The easiest move will be for those doing work that is taken over directly by an honest firm; road maintenance for example, will still need to be done in the free society and competing companies will take over that function from Departments of Transportation. At the other extreme are military occupations, which will have no private equivalent. In between are the bulk of them, and my Transition to Liberty offers some ideas on how that will work out.

Then there are the buildings, vast numbers of them at Federal, State and local levels, and many unfortunately purpose built for government use. Who, for example, would want to buy a prison? However they will clear some price in the market, even if it's zero, and only imagination will limit the uses to which they can be put. (Prisons have bars, right? - so use a different meaning of "bar" and see what comes up!)

The massive waste of resources in the parasite sector today will be recycled into something economically useful, and the more I reflect on it the more I'm convinced that the action of doing so will provide probably the biggest business opportunity of all time. Some boneyard!