High Prices At Airports Aren’t The Fault of Capitalism
Jordan J. Ballor
By

On a trip back from a conference last week, I heard a snippet of an intriguing conversation in the airport. A man and a woman were talking about the price of things in the airport. The woman complained that things were so expensive. “Five dollars for a piece of fruit?” she exclaimed. The man sympathized with this concern, then uttered an explanation: “That’s capitalism!”

That’s about all I heard of the conversation, but it was enough to stick with me. Defenders of the market economy will often rush to defend capitalism in such moments, and I some people I know might be evangelistic and extroverted enough to interject a clarifying point or two into such conversations. I declined to do so, however. After all, I had a plane to catch, and even when I overhear something like this, I try to not be a busybody. (I prefer to write essays afterward instead.)

Airports Aren’t Anything Like Free Markets

One could certainly point to all the ways in which the airport economy does not conform to any capitalistic ideals, and this would be an entirely valid and relevant response to such dismissive conclusions as, “That’s just capitalism!” Among the many complex realities of the economics of airport retail sales is the heavy regulation involved. Stores in the airport are often protected from competition, since there are strict limitations on what people can bring into the airport through security. If you buy a coffee from Starbucks on your way to the airport, you have to drink it or dump it before you can proceed to your gate.

Very few people, if any, are inclined to leave the secure areas of an airport so they can buy a piece of fruit at a cheaper price only to have to go back through security to catch a plane.

But even where there are not strict limits on items that can be brought through security, the Transportation Security Administration screening process itself presents a real barrier. Very few people, if any, are inclined to leave the secure areas of an airport so they can buy a piece of fruit at a cheaper price only to have to go back through security to catch a plane. It’s just not worth it. So even where there’s not a direct regulatory ban on certain items, this inconvenience insulates stores in the terminals from competition.

So one might reasonably expect to pay a premium for convenience or access to goods and services that are otherwise unavailable or difficult to acquire outside the airport’s secured zones. The limited space available for retail outlets also means that rent is going to be relatively high, and the outlets will pass these costs along to customers. There are dozens, if not hundreds, of other factors that also could contribute to making items in airports more costly, including tariffs, taxes, regulations, background checks, and delivery costs. No doubt in many cases there are deals cut for developers with connections at the relevant governmental or regulatory authority. The reality is that governmental regulatory agencies and authorities of various kinds are wrapped up in the way airports are run, including how things are bought and sold within the confines of the terminals. So a very valid response to a dismissal of capitalism in this context would be to point out these complications. In a very real sense, this is in fact not capitalism at all.

As any traveler knows, there are a thousand inconveniences to encounter at airports, and from this perspective one might rightly be grateful to even have the opportunity to buy a piece of fruit, much less an extra phone charger, a new book, or a back massage, even at elevated prices. The man might have just responded to the woman’s complaint about fruit prices that such is the price one pays for not having the foresight to pack an apple or an orange for the trip.

Why Capitalism, as a Term, May Be Outdated

Yet the man’s statement may have had at least an element of pure explanation in it without moral condemnation. By “that’s capitalism” he may have simply meant “that’s economics.” That is, the laws of supply and demand, along with some of the other factors like the competitive advantage outlined above would naturally lead to higher prices than in other, more open and free settings. Capitalism is a term that has become so ubiquitous as to, in many contexts, be used as simply synonymous with economics itself.

When capitalism becomes so closely identified with oppression, the need for clarification and correction becomes monumentally more and more difficult.

But there was, I think, a sense of resignation, if not indignance, in the man’s claim. “That’s capitalism for ya!” he might have said. Here there’s an identification of capitalism with an economic system that takes advantage of those with less power. It is a system that favors centralized interests and powers against the common man. Here capitalism is by definition that which oppresses.

It’s in this confusion of capitalism with oppression that defenders of the market economy encounter the greatest challenge. It’s relatively easy to point out the complexities of airport economics, or the difference between economics as a discipline and capitalism or the free market economy as a particular kind of system. But when capitalism becomes so closely identified with oppression, the need for clarification and correction becomes monumentally more and more difficult.

One response is to abandon the term itself and prefer others, like some that I have used here, such as free market, market economy, or free economy. Let capitalism be that which oppresses, as long as we can distinguish it from genuinely free markets. Another response is to try to reclaim capitalism, or at least a form of it, from the hangman’s noose. Here one would distinguish between forms of capitalism, or between better and worse instantiations, or between more ideal and more corrupt versions (e.g., democratic versus crony capitalism).

Different circumstances will call for different responses to challenges against a moral and productive economic system, and against a society characterized both by virtue and by freedom. In some cases, the best we can do is shake our heads and catch a plane. In others, we have a chance for more sustained and substantive reflection. In all cases, however, definitions matter. We should try to understand the words people are using, the way they are using them, and the assumptions underlying such uses. And in all things we should pursue a true vision of economic good, which relates people to their created purposes and seeks human flourishing in its fullest and most comprehensive sense.

Dr. Jordan J. Ballor is a research fellow at the Acton Institute for the Study of Religion & Liberty, and author most recently of "Get Your Hands Dirty: Essays on Christian Social Thought (and Action)." You can follow him on Twitter @JordanBallor.
Photo Gabriela Pinto / Flickr

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