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How the Stewardess Lost Her Stripes

Mises Daily: Wednesday, January 04, 2006 by

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Taking up the study of economics can help unravel many mysteries of history, among which the pressing issue: Whatever happened to sexy stewardesses? I don't mean as individuals, but as an institution, as a cultural icon, as a persistent commercial expectation.

There was a time when a jetsetting playboy was pictured as having a stewardess or two on his arm. On TV, one guy would be trying to get some other guy to be the necessary second guy for a double date: "They're stewardesses, Bob ... stewardesses!"

Today? To be a "flight attendant" is just a profession like any other, sexless and devoid of meaning beyond passenger management.

Several theories immediately come to mind, such as the observation that everything is in decline, due in part to the campaign to eradicate conspicuous signs of sex differences from mainstream commercial culture (thereby forcing it all into the red-light district).

Or we might come up with a more economically sophisticated answer, such as: Supply and Demand. More passengers means more stewardesses means less exacting selection standards means moving lower toward the hump of the bell curve.

Here's an answer that most people would never think of: Price Fixing

Yes, it's possible that there are fewer attractive stewardesses for similar reasons to there being fewer nuts in a Baby Ruth, or rip-off "toy" "surprises" in my childhood box of Cracker Jack: namely that the inflation of the money supply, in addition to raising prices, has reduced quality available per dollar.

Let's review the basics.

A price ceiling, when legal prices are not allowed to rise to their market-clearing level, causes shortages. There are more buyers at the legal price than there are sellers. Only the most efficient producers can afford to produce the controlled goods, because only they still have a margin between their costs and the legal price. Less efficient producers stop producing the controlled goods, steering those resources where there's more profit, or at least less risk of loss. Price ceilings explain bread riots and the so-called oil crisis of the 1970s. (No, it wasn't French aristocrats or Arab sheiks at fault.)

A price floor, when legal prices are not allowed to fall to their market level, causes gluts. There are fewer willing buyers than there are willing producers at the inflated prices. For agricultural goods, the result is that the government buys up all the surplus with coercively acquired funds. This hurts domestic taxpayers and foreign farmers. It also steers resources away from the goods people actually want, thereby hurting consumers as a whole. A too-seldom recognized form of price-floor-fixing is minimum wage law. Unemployment is a labor glut. Same economic laws apply.

So that's the review of basic price fixing, but the above summary assumes uniform goods at established quantity and quality.

With many goods, quality can vary significantly, not always in easy-to-measure ways. If people are used to paying 25¢ for a Baby Ruth, to use Rothbard's example, then the Baby Ruth company is going to be loath to raise the price to 50¢, even if inflation has doubled all their input costs.

What they do instead is cut whatever costs they can to keep the price at a quarter. Maybe they cut the number of peanuts in half, dilute the chocolate with cheaper vegetable oil, and make the candy bar 10% smaller. The product looks the same on the outside, and many people won't notice the difference on the inside. But fans of the Baby Ruth chocolate bar will notice that the quality has fallen.

In my case, it wasn't the falling quality of the candy I noticed, but the ever-crummier toy surprise in a box of Cracker Jack. Grownups would tell me about the whistles and decoder rings their childhood boxes of Cracker Jack had contained. Meanwhile, I watched plastic toys become cardboard-and-plastic toys become pure cardboard crapola.

Those are inflation examples, but similar dynamics are at work under a legislated cost ceiling of 25¢ for candy.

If price ceilings drive quality down, do price floors drive quality up?

In a sense, yes.

Suppose you used to be able to employ 3 unskilled, fresh-off-the-boat immigrants to perform a job at $1/hour each. And suppose a skilled craftsman for that job can do the same work as 3 unskilled men, but he charges $5/hour. Some people will employ the more expensive, higher quality craftsman, and others will employ the 3 less expensive, lower quality unskilled workers. Historically, the craftsmen don't like the unskilled competition, so they launch a minimum wage campaign: how dare anyone pay less than $4/hour?!

With the new price floor on labor, the 3 marginal workers are all unemployed while the demand rises for the "higher quality" labor product of the craftsmen.

It's not exactly the same thing with sexy stewardesses, but very close. According to Tom DiLorenzo's Mises U 2005 lecture on monopoly and competition, when the airlines were all cartelized, it was illegal for them to compete with each other on price.

The result was that (1) only a certain jet set could afford to fly with any regularity, and (2) the airlines competed for these wealthier passengers not by cutting costs and lowering prices, but with comfy seats, free booze, and stews who looked like fashion models.


  The many depredations of the state: $10

Once the industry was deregulated, however, the inefficient giants went out of business and the survivors found that they had to compete by cutting costs and lowering prices. At cheaper airfares, we unwashed masses started to fly more often, and airline flights became commoditized. Get me from here to there. I'll pack my own lunch and bring my own booze, thank you very much. If I want to stare at unattainable fashion models, I can bring a magazine.

There are plenty of people who will see this as an inherent failure on the part of the market -- Just look at how small the bag of peanuts is! Can you believe they charged me for that tiny bottle of scotch? -- but more people can travel more conveniently for less money.

If you want something fancier, you can pay for a first-class ticket. The fact that so many people don't fly first class tells us those dollars are better spent elsewhere.

I guess that leaves us free marketeers leading a lonely cheer for average-looking flight attendants.


BK Marcus is an editorial assistant at the Mises Institute. Send him mail. His blog is lowercase liberty. Comment on the Mises blog.