How Immoral Are Laissez Faire Ideologues? Ask About Drones.

Yves here. The Politico European newsletter today confirms that drones are a flight safety risk that hasn’t been addressed in any systematic way:

UNLEASH THE EAGLES THIS CHRISTMAS: Here is some transport policy news that everyone traveling around Europe over the holiday should care about. Drone disruption is an increasing problem, and brought London’s Gatwick airport to a standstill this week. The Dutch police found one way to take these menaces out of the sky — take a look at this police video of an eagle wiping out a drone. Unfortunately, the Dutch ultimately decided against the bird-of-prey approach, deciding the raptors were a bit expensive and (perhaps unsurprisingly) did not do exactly what they were told. It’s definitely time to reconsider, however. One Australian drone operator notes that he needs to take evasive action about 40 percent of the time because of eagles. The birds work.

By Bill Black, the author of The Best Way to Rob a Bank is to Own One, an associate professor of economics and law at the University of Missouri-Kansas City, and co-founder of Bank Whistleblowers United. Jointly published with New Economic Perspectives

In 1983, Federal Home Loan Bank Board Chairman Richard (Dick) Pratt published his Agenda for Reform about how to deal with the savings and loan debacle.  He had just made that debacle inevitable by deregulating and desupervising the industry.  In his Agenda, he called for some protective steps (none of which he took or even proposed as rules), but overwhelmingly called for more deregulation and desupervision while promising that the raging fraud epidemic he had super-charged could not occur.

Pratt put three quotations on the front and back covers of his Agenda.  Two of the passages admitted his knowledge that deregulating and desupervising the industry at a time when it was endemically insolvent could greatly increase losses.  Both of those quotations went on to explain Pratt’s real concern about those increased losses to the public – they might discredit deregulation.  The greatly increased losses to the public did not horrify him.  The fact that that deregulation would trigger those losses did not horrify him.  The thing that horrified him was that the public might realize that deregulation and desupervision caused widespread fraud and losses and this could lead the public to block, or even roll back, dangerous deregulation and desupervision.

Pratt’s real concern for the vulnerability of laissez faire policies if the public learned that they were harmful, combined with his real unconcern for the damages he knew they could produce outraged me.  I saw how crippling laissez faire ideology was not simply to sound public policy, but also to its adherents’ morality.

Yesterday, I read a WSJ article on drones that demonstrated both points in a setting anyone can understand without knowledge of economics.  The title is “Possible Drone Collision Renews Focus on Safety Systems.”  A passenger jetliner suffered damage that a drone strike – or a bird strike – might have caused.  No one was injured.  The damage to the jetliner was material but did not produce any known flight risk.  Tests are being done that may be able to determine the cause of the damage to the aircraft.  Whether or not a drone strike caused the damage is not the issue I am discussing.  I write to discuss the industry reaction to the possible strike.

Drone use is expanding rapidly.  There is virtually no effective regulation of drone usage.

The article reported:

If the culprit was a drone, it would mark the first documented collision in North America between an unmanned aircraft and a large passenger jet. A military helicopter and regional turboprop previously have been involved in drone-related accidents in the region, and there have been dozens of close calls. There also are a number of unverified reports of collisions between drones and small planes in other countries, according to air-safety experts.

The FAA receives more than 1,000 reports annually of drone sightings close to aircraft. An agency-sponsored study last year concluded that, under worst-case scenarios, collisions between airliners and drones weighing between 4 pounds and 8 pounds could result in significant damage to manned aircraft.

The obvious point is that the status quo is insane.  We have no effective protection against something that can cause mass deaths even when used accidentally, and ISIS has shown that minimal tech is required to weaponize drones.  Planes are most vulnerable to fatal damage at low altitudes and lower speeds when landing or taking off, which is the most common altitude for drone operation.

Worse, there is no imminent fix scheduled for adoption and no adequate sense of urgency to devise and implement a fix against accidental and deliberate drone collisions.  (Drones can also collide accidentally or deliberately with vehicles, structures, and pedestrians.)

More work needs to be done before there is an industry consensus, and the Federal Aviation Administration is years from finalizing regulations spelling out performance requirements.

The only question is when our luck will run out and drones will cause mass deaths.  So what do private sector manufacturers fear?

But already, there is widespread industry agreement that a fatal airliner-drone collision could instantly set back the fast-growing industry—and likely prompt knee-jerk reactions from regulators and lawmakers. “That’s always been the big fear,” according to Kenji Sugahara, a consultant and drone pilot. “If something like that happens, it’s a disaster for all of us.”

Note that the ‘disaster’ of killing several hundred people is not the drone industry’s “big fear.”  In the phrase “disaster for all of us,” the word “us” refers to the industry and drone users – not the hundreds of dead people and their thousands of loved ones.  The industry’s “big fear” is that the mass deaths would discredit laissez faire ideologies and policies.  The public would demand to know why the industry and anti-regulators stood by for over a decade while thousands of near misses occurred and never developed a sense of urgency to prevent the inevitable tragedy.  The “disaster” the industry fears is that the public will demand action – and Congress will respond with safety legislation.  The “disaster” is lost profits, not lost lives or lost loved ones.

Note that the industry derides any urgent action by Congress or regulators to prevent future mass deaths as “knee-jerk.”  The article does not condemn and directs no derisory rhetoric about the drone industry’s successful campaign to prevent the effective regulatory action that could prevent or reduce the otherwise inevitable fatal drone strikes.  Industry’s opposition to safety regulation is “knee-jerk.”  They increasingly oppose safety and environmental regulation even when it would help the industry.

Laissez faire ideology produces lethal policies and ethics.

Print Friendly, PDF & Email


  1. St Jacques

    I don’t think it will be too long before angry people start blasting, electromagnetically crashing and netting these noisy, intrusive and dangerous things.

  2. Geo

    About two years ago I was so a video shoot in San Diego and we had a drone operator for a few shots. We were on a boat and whenever we got within a certain distance of the military bases a warning would flash on the operator’s screen. He said if he flew any closer it would automatically shut down.

    I’m not experienced personally with operating drones, and I’m sure someone savvy could “hack” the drone so it couldn’t be shut down, but wouldn’t it be reasonable to have similar protections around airports and other sensitive areas?

    That said, I do think proper permitting and licensing of drones should be required. Beyond the safety concern for airliners, there’s also to use of them for spying/snooping on people, and other malicious uses. When I do a video shoot in public places I am required to get a permit from the city so it makes sense a drone would need the same permission in any public setting.

    There’s some really great uses that this may limit such as the person who used a drone to show the coal plants polluting local water ways or the ones used to show the massive police forces during the pipeline protests.

    It gets tricky how best to regulate. Definitely above my paygrade to figure it out. :)

    1. Carolinian

      GPS equipped drones can be programmed to avoid all restricted airspace (something that’s clearly marked on air maps such as the one issued by my state) and I believe many drones now are. The problem of course is that if someone wants to deliberately violate the rules with a little hacking that isn’t very hard. It’s likely that the safety violations mentioned above are almost never “accidental.”

  3. PlutoniumKun

    There are also of course other issues with drones – a year ago when walking along a cliff I saw a guy using a drone to get close up’s of nesting kittiwakes. Which sounds cute and nice, except this was a designated protected seabird nesting area and there is every possibility this could scare the parents into abandoning nests.

    There is also of course a privacy issue – last year a friend said that on Christmas Day they were having their dinner when a drone came up to their window – turned out it was their neighbour and best friend having a joke at their expense, but it could easily have been a stranger, they were momentarily freaked out by it.

    My work involves some land surveying – we were discussing internally about using drones – potentially it could make things much easier for us, but the legal and privacy implications were considered far too serious so it was quickly dropped as an idea.

    1. rd

      Drones with LiDAR are really useful for topographic surveying. You need a commercial license to do that. In general, you are doing this so that you can get good spatial coverage, so it is is up in the air a ways and shouldn’t be a privacy concern similar to aerial photographic surveying.

  4. McGardner

    Broadening the topic if I may:
    Laissez Faire capitalism, on a global scale, requires unimpeded labor mobility for maximum efficiencies of inputs. Therefore, LF capitalists must endorse full open borders worldwide to be consistent with the efficiency mantra. Therefore, Abolish ICE is a pro laissez faire capitalism movement. Logical?

      1. JBird4049

        There is also a choice other than xenophobic wall building and completely open borders.

        Much of the economic problems we have world wide is the the open borders, death to all unions, and the end of all laws because Freedom! will ostensibly bring prosperity to all; Economic systems like Bretton Woods are all about the balance between necessary trade and the internal desires of countries. The cry of Free Trade, Capital, and Labor is really about the destruction of the laws, rules, and customs and therefore of the societies around the world for the enrichment of a few through the economic, environmental, political, and social ruin of the many.

        Organizations like ICE must die, no mistake, but they should be replaced by ones like a recreated and reformed Customs and Immigration.

        But this requires nuance, so it probably will not happen.

      2. McGardner

        You’re a good example of this effect, living in Dubai and questioning the value of community; I’m happy you replied, because, the other side of this coin is, as jbird4049 points out, that free trade at all costs actually destroys communities. If you’ll remember your thread, nearly everyone offered a full throated defense of the value of community. Community, as such, starts local, then expands in concentric rings to states, regions, nations and eventually the whole world as the community of nations. But what is a nation without borders?
        As a former diehard free trader, I’m really beginning to question the value of seamless labor mobility. There are societal costs that don’t show up on the balance sheets.
        But the prospect of the leftist abolish ICE mantra converging with the neolib laissez faire titans (koch) is puzzling. Leads me to believe there’s potential for the nationalist front to handshake with the centrist libs on borders and unions.

        1. Lynne

          Yes,plenty of potential. That’s why those carrying water for the oligarchs spend so much time demonizing and ridiculing the proles on the “other” side. They have to make the idea of finding common ground unthinkable.

  5. David

    I think the issue is actually broader than the author suggests. The real question is whether a person has the right to do whatever they want with their money, even if that inconveniences other people or ultimately puts them in danger. For the last generation or so, western societies have increasingly adopted the principle that individual economic freedom can always be exercised as long as you aren’t directly breaking any laws, or at least if you can find a way round those laws. This is the essentially adolescent principle of “I want, I can, therefore I will.” How would you go about explaining to a drone owner that they shouldn’t use their drone to take photographs of their neighbours sunbathing and post them on line, for example? What arguments could you employ that would resonate with our society today?

    1. Phacops


      One may think that in rural areas where one may safely use firearms they would encourage drone hunting. But then, I think the NRA’s default thinking is property over people.

      Hmmmm . . . at 50 yards out I can probably kill a drone with my Wingmaster but don’t think anybody would be foolish enough to fly a drone around houses up here. (No geese this year, but just put some nice antibiotic and hormone free, free-range doe, in the freezer – in orchard country doe licenses are plentiful)

    2. Ford Prefect

      They can be regulated unless arms are mounted on them, in which case the should be no regulations per the Second Amendment. So small air-to-air missiles or sniper rifles on them should be fine as no sensible person would do anything stupid with that because people are naturally self-regulating as proven in the gun violence statistics.

  6. Jack

    This issue is easily solvable. But, like Bill Black states in the article the drone industry would scream bloody murder. How? The regulatory agency is already in place. One, require registration of drones just like private aircraft. Two, require that all drone operators have to have a private pilots license and a medical certificate. Three, make the operation of an unregistered drone and/or operation by an unlicensed pilot a felony.

    1. Phacops

      Jack: also requiring all drones sold to have an always-on transponder transmitting the license and requiring that as a handshake to operate the controller would go a long way to proper regulation.

  7. rd

    We may have finally found a use for those British skeet and pheasant shooting aristocrats. They can practice their hobby protecting airports from drones.

    1. Tony Wright

      Perhaps drone skeet shooting could become a new Olympic sport – like all sports it would necessitate plenty of training and practice – problem solved.
      I am only half kidding here as I regard unregulated drones as a modern abomination.

  8. KLG

    If I ever get to blast one of those things out of the sky with a shotgun, I will have lived a good life. A load of rock salt should be sufficient.

    Still, Jack at 9:02 has the right idea…I wish him good luck with his proposal.

  9. Schtua

    I have the utmost respect for Bill Black, and for this fine blog, which I have to thank for introducing me to him. But for some time now I’ve been reading the in-passing complaints this site has been making about consumer drones with growing dismay.

    Let me first be clear I’m not a total apologist. Flying near airports is stupid, and should be illegal and regulated. Flying near full-size aircraft is really stupid, and should be illegal and regulated. Fine.

    But there’s more to what you see in the news about drones than that. Most of you, to some extent or another, have arguably been propagandized by the large commercial interests that want the airspace below 400 feet of altitude that’s currently reserved for hobbyists and amateurs. Companies like Amazon have been steadily lobbying to take this previously unwanted airspace, and regulation is the one major tool to keep out the hobbyists.

    The RC community has only one real industry group to represent them in Washington, the Academy of Model Aeronautics or AMA. They are an older group – let’s just say obituaries are a regular feature of their trade magazine. They haven’t done well opposing the lobbyists working for the commercial interests. Here’s a discussion of the repeal/replacement of Section 336 of the FAA reauthorization act, a section explicitly protecting RC hobbyists, where the AMA wasn’t even invited:
    (skip around for the C-Span clips)

    The RC (remote control) modelling community has been around since about 1932, and considering how many planes, pilots, and years are involved, it has a stellar safety record. You are reading about a rash of near-collisions at least in part because the commercial drone-lobbying arm wants you to read articles demonizing them.

    Yes, real collisions have happened. This one seems legit:

    But many of the “drone strike” incidents you read in the news, if you follow up on them closely beyond that first headline, get very fuzzy when you inspect them or follow them for a few days. Maybe it was a drone, maybe it was a bird, and maybe the pilot just thought he saw something. The evidence gets scanty on further examination, but by then everyone has moved off that headline and we are on to the next one.

    There are even outright fabrications:

    How many of you have already seen this video, but weren’t aware until now it was fake?

    Even if you hate drones, and would like them banned for the sky entirely, you should understand that the reason you are reading all this in the news is because Amazon and others want the airspace, and to get it they must evict the hobbyists. Voting for drone regulation at this juncture is voting for Amazon and its ilk – that’s who wins with more regulation, because that regulation will suit only the big players, and not the hobbyists. The AMA can’t even get their lobbyists in the room.

    Fortunately, I think commercial drone delivery is an even bigger pipe-dream than self-driving cars, absent some incredible leap in battery technology, and unlikely to be practical even if that major hurdle is overcome. I say fortunately because if you think Amazon’s PrimeCopter is going to be any safer than Uber’s self-driving cars, I have some we’ll-make-it-up-in-volume stock options to sell you. Given the choice between having a small handful of amateur hobbyists and swarms of commercial drones, trust me, even you drone despisers actually would prefer the hobbyists having that airspace.

    1. Carolinian

      Thanks for the very informed comment but surely you must concede that when it comes to airspace priorities hobbyists are quite justly at the very bottom of the list. When I was growing up–and balsa wood model airplanes all the rage–our town had the model flying field at the edge of town and these days it’s more like at the edge of the county. Drones or rc aircraft should be kept as far as possible away from actual aircraft and as you say most hobbyists are very respectful of these rules because the last thing they want is to smash their expensive model plane against somebody’s airplane. Unfortunately quadcopters have opened the hobby to the masses and onboard cameras make it very tempting to do what they shouldn’t. Doubtless it is becoming a problem even if the scaremongering is exaggerated.

      And yes delivery drones would be very impractical so that’s likely not the real issue.

  10. juliania

    I do think most comments here are missing the thrust of Bill Black’s article. His point is not that individual rights of hobbyists or consumers are being compromised because legislation isn’t adequate. It is that the safety of the public at large is not considered the most important factor in the consideration of any legislation or lack thereof. This reminds me of two problems – that of a ‘rule based’ legislative process, where the rules are determined by those whose financial interests are paramount, rather than public safety concerns; and that of considering corporations as persons. And I think Mr. Black is saying that not only are corporations persons, but people are not persons in the two instances he cites.

    This is also the problem I have with the Auerbach article about China – nowhere within it is the possibility discussed that ordinary Chinese people and their communities are better or worse off than they have been in the past. Yet I have seen elsewhere that this is a major concern of the Chinese leadership. And it is clear from most of the comments here that we are fast losing such concerns right here in the country whose founding document begins “We the people…” It doesn’t begin “We the corporations…”

    Sorry to be so late posting this comment.

  11. nobody

    Just a few minutes ago, I read a CDC article on Global Road Safety that anyone can understand without knowledge of economics:

    [E]ach year, [motor] vehicles are involved in crashes that are responsible for 1.25 million deaths and 20-50 million injuries.

    Bill Black’s apparent unconcern for the damages caused by motor vehicles vis-a-vis the comparatively infinitesimal and still completely hypothetical damages that will probably eventually be caused drones outrages me. I saw how crippling laissez-faire current-events commentary can be not simply to sound public policy debate, but also to… oh nevermind.

    Yesterday, (or was it the day before?), Bill Black read one single article on drones, and one single quote hit a nerve, and it apparently didn’t occur to him to do any further research whatsoever before going to press under his own name on a topic that he obviously doesn’t know anything about, from an industry he obviously doesn’t know anything about, and hasn’t bothered to do the most elementary research on.

    I’m a big fan of his, and seeing this public commentary blunder saddens me. Naked Capitalism has been my internet home since a few weeks after Lehman collapsed, and seeing the implied endorsement of this completely unresearched blunder saddens me. And nearly all the subsequent uniformed commentary in the peanut gallery… it saddens me.

    And speaking of airplanes motor vehicles and safety… a bit of classic dialogue from Fight Club:

    Narrator: A new car built by my company leaves somewhere traveling at 60 mph. The rear differential locks up. The car crashes and burns with everyone trapped inside. Now, should we initiate a recall? Take the number of vehicles in the field, A, multiply by the probable rate of failure, B, multiply by the average out-of-court settlement, C. A times B times C equals X. If X is less than the cost of a recall, we don’t do one.

    Woman on plane: Are there a lot of these kinds of accidents?

    Narrator: You wouldn’t believe.

    Woman on plane: Which car company do you work for?

    Narrator: A major one.

    But whatever.

Comments are closed.