The Inflation of Airline Frequent Flyer Miles

In response to the Fed policies, Airline companies in the US have been giving away less services by inflating frequent flyer miles. Or simply put; indirect price increases.

Simon Black of the Sovereign Man explains

Today, millions of passengers in the Land of the Free will take off their shoes and assume the “I surrender” pose inside a radiation machine that provides negligible benefit and maximal cost to taxpayers.

Our modern security theater is a stark contrast to the past. But there’s been something else happening over the last several decades that is even more insidious… and far less obvious.

In 1979, Texas International Airlines (the precursor to Continental) introduced the first modern frequent flier program. American Airlines soon followed, launching their AAdvantage frequent flier program in 1981.

When the program launched, you could upgrade to a first class seat on the Concorde for 20,000 miles (something that you couldn’t even do today). Today, an upgrade to first class between the US and Europe would set you back 50,000 miles, plus $900 in fees.

In fact, just about every mileage award category has been getting more ‘expensive’, particularly among the major US carriers. The majority of the increases have taken place in the last several years.

United Airlines, for example, is raising the number of miles required for most of its awards starting February 1st. The steepest is an 87% increase for first class award seats on United’s partner airlines flights to the Middle East.

A United economy class ticket to Hawaii will increase by ‘only’ 12%. And business class to Europe and Japan will increase 20%.

Just like central bankers with paper currencies, airlines are devaluing their miles.

They have created trillions of miles in the system, many of these through special gimmick promotional giveaways. We’ve probably all seen the ‘sign up for the new credit card and receive 25,000 bonus miles’.

But just like the real economy, rapidly increasing the money supply (airline miles) devalues the currency and creates inflation.

That’s exactly what’s happening here. Airline miles are worth less and less.

Read the rest here

Celebrating Capitalism: Travel: From Torture to Joy

One of the benefits of capitalism can be seen through the lens of the transformation of travel.

Writes Jeffrey Tucker at the Laissez Faire Books:

The nature of travel is one of the most changed by the advent of the capitalist economy. For most of the human history, travel was something to dread and even avoid at all cost.

Just look at the term itself. The word travel shares the same Middle English root as the word travail, which means to toil or labor. The word in Middle English was travailen, which meant something deeply unpleasant. Looking even further back in time, we find the Latin slang word travailler, which means… to torture!

Indeed, through human history, traveling has usually been torture. If you see a movie set in the Middle Ages in which one person is traveling on his own and is not being forced to do so, you can pretty much assume it is untrue. No one traveled alone. If you did, you would certainly be robbed, beaten, enslaved, or killed. You always traveled in groups, and these groups had to include people who could protect you. There was no other way. Most people stayed put.

What about modern times? Everything has changed. As usual, we take it for granted.

Michael Graham Richard did some interesting research on travel times in the United States, based on the 1932Atlas of Historical Geography of the United States. What he found is quite revealing. It took people an entire day just to get out of New York. Going from New York to Georgia or Ohio took two weeks. If you wanted to get to Louisiana or Illinois, you had to set aside a full five weeks! That’s just to get from here to there.

But thanks to railways, all this changed half a century later. What used to take two weeks in 1800 took only a day or two by 1857. If you set aside a week, you could get to Texas — the travel time sliced to about 20% of what it was 50 years earlier. In a month, you could get to California, which was rather amazing by historical standards. Also, you wouldn’t typically be beaten, robbed, or killed, which was pretty great.

By 1932, modernity had arrived. You could go coast to coast in four days!

Of course, now you can do all of this in a few hours, thanks to planes and cars. And driving itself became more fun than ever. It’s one of the great changes in the history of the world: Travel went from torture to joy. And it happened because of technological advances working through a market system that serves people in their daily needs. Getting from here to there is one of the strongest needs that we humans have. It is what gets us all the things we rely on for the good life.