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Shared Suffering in Airports and in Bankruptcy

posted by Adam Levitin

Warning:  this is one of my odder posts.  Today I got a postcard in the mail encouraging me to sign up for Flyclear, a private service that for a mere $174 annual membership will provide me with a special ID card that will let me go through special airport security lines super fast.  The card works at almost 19 airports.  


I really dislike this product.  It bothers me in a visceral way because it is horrifically inegalitarian and undermines a basic civic value of shared suffering from war.  Airport security lines suck, but this is a national cost imposed by terrorism.  (I'll leave aside the issue of whether airport security lines are a sensible or the best response.)  And there is something really wrong about the costs of terrorism being borne disproportionately by American depending on their economic means.  We're all in this together and should have to shoulder the burdens alike.  It very much bothers me that TSA (or public airport administrations) is willing to countenance this sort of product.  

Flyclear is analogous to letting rich people pay to avoid the draft.  Sure, we did it in the Civil War.  For a few hundred dollars (a lot of money then), you could buy the life of a poor Irish or German immigrant who would go and live a miserable camp life and possibly be killed or maimed in your place.  In Vietnam we did it through the backdoor--rich, connected folks could get themselves places in higher education or seminaries and "Ho Chi Minh yeshivas" or fled abroad (or got into cushy air national guard units).  Maybe this doesn't bother you, but it really gets under my skin.    

I am aware of some of the counter arguments about why Flyclear is a good thing: the more people who are in Flyclear lines, the shorter the lines are for everyone else.  Flyclear lets people choose how they want to bear the burdens of terrorism, be it in their wallet or by waiting in a line.  And maybe Flyclear pays something to TSA, which thereby benefits all the rest of us.  There are responses to all of these arguments, but even if one were to concede their validity, none of them, to my mind, comes close to counterbalancing the erosion of the shared suffering principle.  

This is, of course, a bankruptcy blog, and don't worry, there's a connection with FlyClear.  Shared suffering is a key bankruptcy principle too, of course.  Unsecureds get paid pro rata.  But sophisticated creditors can opt out of this shared suffering by becoming secured or better yet entering into transactions that are not covered by the automatic stay.  

The problems that this creates in bankruptcy are the same that it creates with the "war on terror" (can we find a better phrase now for goodness sake?).  When some folks can opt out of the suffering of a war,but still have a voice in the politics of the war, it will affect how the war is prosecuted, and possibly not in a way that benefits the country overall.  Likewise, if a creditor is not bound by the stay or is secured, the creditor might not act in a way that maximizes value overall (Kaldor-Hicks efficiency) or even maximizes value in a way that doesn't make anyone worse off (Pareto efficiency).  

Let me be clear--I don't think Flyclear will destroy republican virtues.  But the sense of shared community, be it in bankruptcy or in airports, can undergo a death of a thousand cuts, and Flyclear is just another little cut.  

Comments

The Civil War draft was not enacted until 1864 and was optional. If a State could fulfill its enlistment goals without conscription, it did not have to use the draft. Less than 6% of the total number who served on both sides of the war were men who came as draftees or enlisted when conscription was in effect. If the Union had accepted all potential volunteers during the first year of the war, the draft would not have been required at all.

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