The United Airlines debacle isn’t about customer service. It’s about the morality of capitalism.
Here is why United Airlines kicking off and countenancing the assault of a paying customer is a big deal: It helps to reveal how corporate America often puts rules before people and how capitalism often places profits before human dignity. (I am speaking not only as a Jesuit priest but as a graduate of the Wharton School of Business, someone who considers himself a capitalist and a veteran of several years in corporate America.)
Overbooking is a device that most airlines use to maximize their profits. Unfilled seats mean lost revenue. This means that some people will inevitably be bumped from flights. But in the airline’s economic calculus, this is deemed an acceptable trade-off. A customer’s inconvenience is subordinate to profits.
You can already see the inherent problem.
The man had purchased a ticket from United, so, as a consumer, he was justified in expecting that he would be able to use it. That is the essence of capitalism: a fair exchange of money for goods or services. But the airline decided they had “overbooked” when some airline employees needed last-minute seats on the flight, so they asked passengers (who had already paid) if they would be willing to relinquish their seats. They offered increasing levels of money to make it more palatable. Several took the offer.
No matter what the fine print said, the man had a right to expect to fly that day.
Not surprisingly, one person did not want to leave. Why should he? He paid for his seat and was anxious to reach his destination. The airline had also entered into a contract with him. And the argument that the airline had the right to eject him is, to me, fallacious. It was not any sort of emergency. No matter what the fine print said, the man had a right to expect to fly that day.
Likewise, the argument that overbooking reduces the price of tickets, and therefore actually helps the consumer, is also something a dodge, because the goal of the corporation is not to reduce the price of tickets but to maximize profits for shareholders. One reduces ticket prices to increase volume, which raises revenue. Airlines are not charities.
When the man was unwilling to give up what he had paid for, he was forcibly removed from his seat by security officers, who ended up bloodying him and dragging him along the floor of the plane.
When we watch the video of the event something in us says, “That’s not right.” Pay attention to that feeling. It is our conscience speaking. That is what prompted the widespread outrage online—not simply the fact that people who have been bumped from flights share in the man’s frustration but the immorality of a system that leads to a degradation of human dignity. If corporate rules and the laws of capitalism lead to this, then they are unjust rules and laws. The ends show that the means are not justified.
A toxic cocktail of capitalism and corporate culture led to a man being dragged along the floor.
Someone in authority—pilots, stewards, ground crew—might have realized that this was an assault on a person’s dignity. But no one stopped it. Why not? Not because they are bad people: They too probably looked on in horror. But because they have been conditioned to follow the rules.
Those rules said: First, we may sometimes overbook because we want to maximize our profits. Second, we can eject someone because we have overbooked, or if we decide that we want those seats back, no matter what a person can reasonably expect, and no matter how much of an inconvenience this is. And third, and most tragically, human dignity will not get in the way of the rules. A toxic cocktail of capitalism and corporate culture led to a man being dragged along the floor.
That is why bland “nothing to see here” defenses of the ills of corporate America and of the dictates of capitalism bother this capitalist and former corporate employee so much. They fail to see the victims of the system.Is this a “first-world problem”? Yes, of course. Most people in the developing world could not afford a ticket on that flight. But it is very much a “world problem” because the victims of a system that places profits before all else are everywhere. The same economic calculus that says profits are the most important metric in decision-making leads to victims being dragged along the floor of an airplane and eking out an existence on the floor of a hovel in the slums of Nairobi.
The privileging of profits over people leads to unjust wages, poor working conditions, the degradation of the environment and assaults on human dignity.
A day after the incident, Oscar Munoz, United’s chief executive, apologized for the treatment of the passenger, saying that “no one should ever be treated that way.”
He also said, tellingly, that employees “followed established procedures” and that he “emphatically” stood behind them.
What is the solution, then, to a system that gave rise to such treatment? To recognize that profits are not the sole measure of a good decision in the corporate world. To realize that human beings are more important than money, no matter how much a free-market economist might object. To act morally. And to respect human dignity.
Fr. Jim, it wouldn't surprise me in the least to see you take some heat for the *correct* stand you've taken here. I don't know how to do/encourage it, but we have to begin looking past our individual immediate needs and consider what God's calling us each to be... in each moment we experience.
Yes, that's why I'm Catholic.
A bit of balance on your part would have been a welcome addition to your essay
The sciences are neither moral nor immoral. But the application or practice of any of the sciences is subject to moral and immoral intentions, acts and uses.
It is your concluding statement that leaves me troubled and seeking balance .....
What to do " ...about a system that gave rise to such treatment ? "
It is abundantly clear that it is not " the system" which is at fault but individual actions. The real question about the value and utility of"the system " is whether it operates to ,initiates , permits and promotes a reaction to correct the individual actions you find immoral. Subsequent events such as : negative publicity including humiliating comedy parodies , corporate apologies and changes in policy , not to mention lost bookings and a pillorying of stock market value demonstrate the system is structured to self correct. The actual damage done to the individual can and will be compensated for in the court system but that is a matter quite distinct from your analysis and condemnation of "the system".
I have returned to add to this on Holy Saturday.
Had Father Martin waited "to get the facts" he probably would not have written or published this broad sweeping condemnation of "the system". The linchpin pin of his argument is that the greed of "overbooking" inherently created this problem and the absurd response.
BUT It turns out that the plane WAS NOT OVERBOOKED. In fact there was one empty seat but the airline needed 5 seats total to reposition a flight crew.
So the good Father starting with a false predicate concludes the system is inherently flawed.
But as noted above even if that predicate existed he conflates individual actions as those of "the system". Again had he but paused for the facts to develop he would have observed "the system" punishing the reprehensible actions of those individuals and their corporate employer/ sponsor.
There are multiple parties responsible for this fiasco, and the behavior of the crew (a Republic Airways crew) and the Chicago aviation police (who have been suspended) were outrageous. One could also blame the Department of Transportation (or the European Denied Boarding Regulation (Regulation 261/2004 EC) for permitting overbooking, or the voters for electing the politicians, or Environmental Laws that tax fuels, or... But, the biggest stretch is to blame Capitalism, if what is meant by that shorthand, the profit motive. Of all the actions open to the crew and police, this was the most unprofitable possible. Without Capitalism, there would not have been a flight. The people would have had to go by horseback from Chicago to Louisville (if either city existed).
I also think it crazy to put the blame on United Airlines, although they will be metaphorically burned in effigy because of our litigious and social media outrage culture. Poor United - they wouldn't have had to take responsibility for this if they hadn't entered into an agreement with Republic Airways after that carrier went into bankruptcy. Then again, if this was socialism, there wouldn't have been bankruptcy, since no one expects businesses to be profitable in socialist systems. And bad service is not expected either, since good and bad customer service is only a capitalist idea. Time to re-read Orwell's 1984. Their Treasury was called the Ministry of Plenty and everyone went without.
A few things,
First, to bring in capitalism is absurd. I would bet there would be worse conditions and behavior in non-capitalistic scenarios. A most interesting part of the story is that none of the 80 passengers felt it was worth their while to take the $800 bribe to get bumped. If anything that tells you how wealthy capitalism has made us. The United stock lost about $billion dollars today so capitalism is working just fine. Let's leave capitalism out of it no matter where Fr. Martin went to school.
Second, I asked several people what they thought and all were horrified by the scene. I cannot imagine anybody wanted to be treated that way But the person was asked to leave and he refused. An airline ticket has several proviso's that allow the airline to refuse travel to anyone as long as they are compensated. He refused to leave when legal authorities said he had to leave. He essentially resisted arrest. I know if I was the person in question, I would have been extremely mad but would not have resisted arrest and left probably with some choice words. Actually, I would have probably taken the money and flown the next day but the man in question was a doctor and said he had to work the next day.
Now everyone agreed that the airline should have done something differently, but what. If the alternative crew had not reached Louisville, would a plane be cancelled the next day and a hundred passengers been inconvienced. I do not know what would have happened since flights are cancelled all the time and there is time to react to find a new flight but it may ruin a whole day for many. So was this actually necessary or was there some thought that this was required to meet future flight obligations.
Third, the individual involved had been found guilty of trafficking drugs for sex and only recently was admitted back to practice medicine again after being suspended for several years. So my guess is that he was not your usual reasonable person. He apparently had anger management problems and is only allowed to practice medicine one day a week in an out patient clinic,
About 500,000 people a year are bumped from flights in the US. Of those most voluntarily give up their seat usually for compensation. But about 60 thousand people a year are involuntary bumped from an plane. This passenger was one of those 60,000 people but we have not heard much about these other passengers. Why was this particular person a problem. There are about 630,000,000 passenger totals a year. So a few incidents out of 600 million travelers each year is indicative of generally orderly behavior not a lack of it.
The past history of the individual involved has nothing to do with the situation at hand. It was handled poorly from beginning to end by United and is, I fear, reflective of a mentality that puts the interests of the company above the people it serves.
Your comment shows how easy it is for authoritarianism to be accepted by citizens ...
Why? Why leave capitalism out of it? Your premise that other "systems" are "even worse" is so lame the rest of your comment is not even worth reading.
Father Martin drills down to core of the sickness in our society and Mr. Cosgrove here tries to dismiss it out of hand. Clearly, the secular world has a hold on his soul.
I'm grateful for this man's act of civil disobedience. Can you imagine how this would have been treated in China or Russia. Everything else you say, the absurdity of blaming capitalism for this, the adjustment to behavior because of the sharp drop in the price of the stock, and the value to the consumer of the practice of overbooking, I very much agree with as any rational decision maker would.
The problem is the allure of power to the elite, and the cooperation of their dupes who are easily convinced to blame the economic system rather than their own choices and the choices of their family for their current lack of financial success, in my opinion.
Fr Martin have you ever calculated what your net worth would be today if you had benefitted financially from your best selling books and the public speaking you do? I urge you to carefully consider your motives in writing this.
You seem more eager to defend an economic system and money than you do the passenger on the flight. The last two sentences especially left a bitter taste in my mouth.
WWJD? I don't know but I may have to reevaluate his sermons and parables on account of that class warfare and envy of the rich that he constantly espoused. Must have been easier to do than to look at his lack of financial success, or even lack of anywhere to lay his head at night.
The passenger's prior bad acts are not at issue. What his temperament may or may not be and how he behaved in the moments preceding the incident are not known to those of us who are "arm chair quarterbacks" here.
Father Jim - you bet this is about the money. Contact your congressmen and see what stance they take about "overbooking." I'll bet you will be disappointed. This just goes along with our "disposable" culture. To quote another American, "Sad."
Blather, blather, blather, J Cosgrove. A great regimen for maintaining the status quo, and of blaming the victim. It is often effective to bring up someone's sins to discredit them. Jesus gave us great examples with the woman at the well, and the woman caught in adultry, among others. it is difficult to forgive and move on when profit is at risk.
Hear1 Hear` Mr Huber. Cosgrove has no interest in making the world a more humane place. Clearly, he wants us all to sign up for Hunger Games.
This clearly is a topic in need of prayer and open minded discussion. I suggest a discussion between Pope Francis and President Trump behind closed doors that does not stop until they can together publish a book like the one Pope Francis published with a Jewish Rabbi. Why not? If not the two of them, who? And we each need to prayerfully and thoughtfully consider our own opinions. I suggest Socrates Cafe. In Colorado, whether you live here or traveling, check out http://Meetup.com/Colorado-Socrates-Cafe-Society
Thank you, Fr. Martin, for using this incident to provide a clear example of the inhuman nature of capitalism. Pure capitalism is always about profit. Its many benefits, which I believe to be quite substantial, are just coincidental, not purposeful. It is so pathetic to see Mr. Cosgrove’s comments become more and more nonsense and ludicrous on so many topics. Mr. Cosgrove seems to be on a personal campaign to discredit and attack all things non-religious shared by many good and smart authors from this magazine, especially the articles by Fr. Martin. This incident also shows a clear racist bias from a big American corporation. Obviously, Mr. Cosgrove can never understand this as he did state that multicultural was something of a moron in his past comment.
Thank you for your always kind words.
Where is there any evidence of a ".....clear racist bias from a big American corporation" ?
The reqular and consistent attempt to find racial bias in every reprehensible act is a true disservice to incidents of real bias.
Mr. Fang, I have found Mr. Cosgrove's comments over the years to be highly intelligent and well informed. I find you to be crude and intolerant - a true progressive no doubt.
United described the forcible removal of the passenger as "reaccommodation." This kind of Orwellian thinking shows just how deep the problem goes.
The matter of considering money more important than people applies to much more than this incident. If the incident had not been filmed and the video posted on social media, I suspect that this would have been no more than "business as usual" for United.
Capitalism has positive qualities and provides benefits to many, but I see people talk about it as though it is a religion rather than an economic system. When we forget that it is merely an economic system, we are likely to overlook its faults. It can and should be criticized for its failures.
I think this analysis overlooks several salient facts that weakens its indictment of the "corporate rules & laws of capitalism." For one thing, I find it a glaring omission that this analysis makes no mention of the fact that federal regulations are applicable here & played a role in United's behavior. It seems strange not to mention, for example, that federal regulations impose a limit on the amount an airline can offer to entice passengers to give up a seat on an overbooked flight. Given the federal regulations in place, I don't think this case is one of unfettered, laissez faire capitalism at play. Airlines - like most common carriers - are not exactly lightly regulated entities.
Secondly, I think it certainly & rightly possible to criticize United's actions, but I don't think United's actions are exemplary of capitalism writ large. For one thing, it seems clear that even given the federally-imposed limitation, United stopped trying to monetarily incentivize passengers well before that limit. That's not to mention the clearly egregious decision to physically remove the passenger.
With respect to overbooking, I find it less a means of maximizing profit as it is covering costs. The cost of maintaining an airplane, fuel, replacing tires, parts, paying crew, etc. are the same regardless of the number of passengers who show up for the flight. Would it be preferable - both morally & economically - to assess those passengers who do purchase a seat a supplemental fee to cover the costs for those seats not sold or left empty? I doubt it. In a sense, overbooking is not that different in concept from that of risk-shifting in insurance. And one might have noticed that airlines are not exactly very good at making a profit.
Those are just some of the things I think are overlooked in this analysis.
The purpose of a company is to make a profit. It’s no surprise that 10,000 Washington corporate lobbyists would lobby for a low a limit on the amount an airline can offer to entice passengers to give up a seat on an overbooked flight.
admittedly i have no head for business, but i do travel quite a lot. can you explain to me why European airlines are able to operate so successfully while NOT charging exorbitant fees or overbooking? i also find that European airline staff are much more likely to treat their passengers with dignity and respect.
Everything is connected. Materialistic capitalism is literally turning the planet into a garbage dump, and for the same reason that the passenger was ejected: money is the only thing that really matters, and those at the service of capitalist institutions will use violence if necessary to protect their salaries. Materialistic communism, by the way, is no different; proletariat illusions notwithstanding, money is what matters. But why money? Because money leads to power, and this is the bottom line going back all the way to original sin. PATRIARCHY is the common denominator (Genesis 3:16), and RELIGIOUS PATRIARCHY is the most nefarious form of patriarchy -- the holy crusades, the holy inquisition, and now ISIS, come to mind. As long as religious patriarchy prevails in the Catholic ethos, and in the hierarchy of the Catholic Church, we are complicit and united, in word and action, with United Airlines.
Thanks for the everything is connected approach and the complicity of hardcore patriarchy in so many of the ills of our world including protection of the unborn of which our church is supposedly so concerned. Please keep up your good work Luis!
So, it's not the fault of capitalism, but patriarchy? Or, more specifically, it's religious patriarchy. And since Fr. Martin is a priestly father, it ends up being his fault! So, I think Fr. Martin should apologize :)
Fr. JIm, this situation had little or nothing to do with capitalism. It is simply a case of people behaving badly. Why do we sometimes behave badly? Because we are fallen and frequently fail to live up to the our own standards and far short of God's. This is a failure of all people involved to be generally courteous and respectful.
You yourself are very respectful of the contractual right to fly that a passenger might have once he has purchased a ticket. But the passenger, by virtue of purchasing the ticket, has also agreed that it is possible that the airline will not be able to provide the service. The airline attempts to accommodate this problem with monetary awards. Everyone knows this.
Of course over-booking helps the airline maximize the number of seats sold. But it also ensures that the maximum number of people who truly want to fly are allowed to do so. The airline reserves 115 passengers for 100 seats, because their experience is that roughly 15-20 people fail to show up, or cancel their booking. But they do not know who those 15-20 people will be. If they only sold 100 tickets, 15 people could not get a ticket and definitely could not travel. This is beneficial to the passengers.
You are suspicious of the concept that ticket prices are lower because of over-booking. But look at the above example. Say the airline only sold 100 tickets and only 87 people showed up. The airline would have to raise ticket prices by 15% for those 87 people in order to achieve the same revenue. This is easy math. Apparently we are all happy to have our fares reduced by 15% for the risk that we might occasionally get bumped.
Finally, the airline is maximizing the number of people it can accommodate by bumping four people to get a flight crew to the correct city. Everyone in the next city would be bumped and re-booked if the flight crew does not arrive. The four people bumped were only a fraction of that number.
Yes - people behaved badly. This is a great article on the subject. http://www.nationalreview.com/article/446645/united-341-flight-reason-what-happened-golden-rule. UA, the security people, and the passenger all should have behaved better.
Finally, capitalism demands that customers are treated with respect. It is a good system for maximizing the proper treatment of customers, because profits do depend on customer satisfaction. I would wager that the behavior of the airline and security personnel in Socialist economies is much worse.
Please keep writing and challenging us choose lives filled with God's grace.
i keep reading this argument about the flight crew. was there REALLY no other way to get that flight crew to their destination? paying their fare on another airline, sending them by some other means? it seems to me that paying customers shouldn't be penalized for the shortcomings of the airline staffing schedulers.
Good article. I believe it is an and/both situation (about customer service AND the morality of capitalism), rather than simply an either/or proposition.
I am so glad that corporations are coming under greater scrutiny as a result of timely publicity that reveals their over-reactive nonsense and other negative trends in dealing with the public. Both Pepsi and United Airlines are among the latest that recently experienced a swift kick in the pants for mistreating different people and communities. And then there are the companies that harass people with daily phone calls to collect outstanding bills under $50 while someone like Trump can bankrupt multiple companies but still get access to major lines of credit.
As diverse consumers wise up and push back against rip-offs due to accumulated fees that primarily line the pockets of bank executives whose bonuses are larger than the base salaries of many employees stranded on the ledge of poverty due to stagnant wages, the slow-down in purchasing of discretionary products might finally send the message. Extreme income inequality costs not just individuals, families and communities, but impacts the bottom line of businesses as well. Do these corporations even consider the ultimate math if the masses end up struggling to pay for many things considered basics?
I cannot wait until these companies come to the realization that it is no fun being forced to push multiple buttons on the phone before reaching a real person, and that talking to computerized voices has major drawbacks -- including triggering a strong urge to want to simply hang up.
Human beings being allowed to think on the job and have flexibility to solve problems rather than forced to follow rigid scripts, might make a major difference in improving customer service. Technology truly has its limits when things like common sense and compassion are equally necessary as price, to complete a simple transaction.
Unfortunately, while blaming corporate greed, the writer left out one of the most important facts, which is just one more person was needed on that flight to volunteer to get bumped. Every other person on that flight chose to be selfish and stay on board. The airline probably offered free flights to get bumped and no one volunteered. When that happens the airline has to resort to forcing people off. The writer also says the passengers were forced off by airline employees who "decided" they needed to fly. That crew did not just "decide" to fly, but had to be transported to another plane so hundreds of other people would not miss their flight. Having once worked for an airline, I used to see Passenger s occasionally bumped. All it would have taken was one more volunteer and no one stepped up. That's the real story. And if the writer went to business school, he should also know how difficult it is for an airline to even make a profit. Airlines have to overcome multitudes of gov't regulations, volatile fuel costs, equipment and safety issues, and more, while at the same time trying to deliver thousands of passengers safely and on time. While the airlines perform all of these actions under extreme pressure and scrutiny, one person put their interest above all others.
I have now read several commentaries on this incident but am a little troubled by the fact that no one (except me apparently) seems at all surprised that nobody volunteered to take the man's place when they saw the escalation. Tweeting their indignation, they remained seated. Nobody said "Stop! He can have my seat". Am I the only one who thinks this strange? Am I stuck in a different era: an era of chivalry, of self sacrifice, of bearing wrongs patiently, of, in short, courage?
For the record, UAL could've sent the 4 employees to Chicago in a rent-a-car for less than $100. It's a straight shot and 5 hours if nobody has to relieve themselves or buy a BigMac. They could've hired an UBER for around $300 (yes, we checked that.)
Perhaps Fr. Martin has lifted the cassock too much and revealed his own bias, conflating a poor local management decision with the evils of capitalism. You might want to think about this when you go on retreat this summer.
Apparently the pilots' contracts don't allow them to be transported to their destination for the next day's travels by any form of transportation other than by flying on a United plane (according to a radio source).
It is not about capitalism per-se. It is about an abuse of earning practices that deprives us of what we rightfully expect from an honest marketplace.
If you don't like Capitalism, then go live somewhere more to your liking... Socialism would most likely be your preference.......The passenger was in the wrong. He refused to exit in accordance with the agreement he willingly entered into. He refused to obey when security arrived, and he was removed.
I agree with you completely. "The United Airlines "is a private company and can throw out everyone as they please, as long as they're not breaking the law. If anyone has an issue with that - stop using their services, there are dozens of airlines in the USA.
This incident exposes the fascism that exists in the US today. That this was legal shows that the interests of corporations are more valued then individuals. Where is the DOJ, that has allowed this practice of bumping people off of flights to make room for other people? How elitist, how blatantly unjust and unfair; how un American! Are we a nation of laws, undergirded by Constitutional protections where all are treated equally and due process exits? If you saw this in some futuristic movie about how far fascism can go, you would not believe this could happen here.
I also suspect racism was operating here. How many people who get bumped are people of color? How many Blacks, how many Latinos and how many Asians? I suspect, but I am not sure, that it happens rarely to Blacks or Latinos . Black -lives- Matter would be out demanding justice, and so would la Raza, to learn that a Black or Latino person was "randomly" picked to be forced off a plane!And rightly so. But Asians are not known to rock boats in our society. Do they get bumped off more often then others, I wonder.
I will venture to say that capitalism is an amoral system. It is the people who engage in it, whether as owners, board members, employees or patrons, who decide whether or not they will handle themselves and their influence in a way that is pleasing to God. Greed, disrespect, dishonesty, even not obeying authority come down to issues of the heart.
As one commenter already stated, there are federal regulations that had to be followed in regard to how much compensation UA could offer passengers in exchange for willingly giving up their seat. There were company rules in place on how the staff had to be transported to their destination the next day (apparently they HAD to fly on a UA plane based on their employment contracts). There were rules that the employees had to follow for removal of a passenger, which, incidentally, they did not follow completely. (When a passenger needs to be forcibly removed, the airline is supposed to have ALL passengers in front of that person being removed exit the plane first. Perhaps if that had happened, the person being removed might have reacted differently in response to seeing that things were getting even more serious. Who knows, but UA didn't follow their procedures.). There was a contract to which both UA and the passenger agreed when the passenger purchased the ticket. (Nobody forced the passenger to purchase the ticket; he willingly agreed to purchase it, knowing UA might not be able to honor the contract for certain reasons.)
Many players in this scenario were probably at fault: the passenger was unwilling to follow through with his end of the bargain, even though he didn't like it; UA didn't follow their procedures appropriately; UA probably could have offered a higher compensation to encourage someone to give up their seat voluntarily. But "capitalism" didn't cause the problem.
You can be certain that many people won't fly United because of this. That is one of the benefits of capitalism. We can choose to whom we want to give our business. As another commenter has stated, customer satisfaction has a lot to do with whether or not a company is successful. Sure, companies can make rules that people don't like...but in many cases, those people can take their business elsewhere. They might not be able to do it with the current transaction, but they most likely can with the next one. And you know they'll let their friends and family know about their displeasure!
Capitalism isn't the issue. How each individual lives out their life, unselfishly or not, Christ-like or not, is the largest contributing factor in my opinion.
I would have expected someone from Wharton (though the business school is less focused on the deep fundamentals of economics) to understand that this has nothing to do with capitalism. This could just as easily happen in an economy run by the state. Blaming it on capitalism is a cop-out. As a proponent of free market capitalism from the University of Chicago, I understand that the very nature of this system will drive the markets to react proportionately. If United's stock and profits are impacted adversely, actions will be taken, not just within United, but across the airline industry. The nature of free market capitalism is based upon the satisfaction of customers. If customers are unhappy, they will shift to a competitor, and corporate profits will suffer. So, given the argument that capitalism pushes companies to focus on profit, then this is the very reason why they will always strive to satisfy customers. This particular incident had nothing to do with capitalism, but rather everything to do with (1) a rogue security officer and (2) a United staff (including the CEO) which did not handle the situation appropriately. Repeat - this has nothing to do with capitalism.
The nation’s top publicly traded companies in 2014 reinvested two percent of their profit into their business, down from seventy percent in the early 1980s. Two percent reinvestment perhaps doesn’t say much about corporate America’s vision of the future of America.
Ninety-eight percent of 2014 profits went to shareholders as dividends and stock buybacks.
Thank you Father for a wonderful column. We are blessed to have you to model for us a human being who has traversed the corporate, secular world and now the Church. Your perspective helps show us how me must think, believe and act as followers and disciples of Jesus Christ. So many of us get mired in the slime of the secular world, too many of us earning our livelihoods in the corporate world, that we never truly learn how to be In Christ.
The actions of the United Airlines employees and presumably some level(s) of supervisors were indeed reprehensible, whatever the ‘fine print’ terms of the ticket sale. But I wonder if the capitalist system is the real problem here, or is it just a case of very poor judgments? Capitalism, as practiced in America, actually offers both alternative approaches that should have been used, and a remedy for the abuse that actually occurred here.
A thinking capitalist with authority to act locally would have offered yet higher compensation to induce a passenger, in free market style, to voluntarily surrender of the needed seat. Paying a few thousand dollars to ‘buy back’ the needed seat would have proven less expensive than this incident will no doubt prove to be.
I agree with the solution Fr. Martin describe in his last paragraph. But actualizing these, building them into a corporate culture, will happen most quickly and reliably if capitalist methods, including better training and incentives, are invoked. Note that many corporations, including airlines, include customer satisfaction survey data in their evaluation and incentive programs. Quite a few successful corporations publish, and live by, mission statements or value propositions that include variations of Fr. Martin's words, “To act morally. And to respect human dignity.”
As Fr. Martin notes, “the goal of the corporation is not to reduce the price of tickets but to maximize profits for shareholders.” Shareholders obtain the benefit of maximized profits through higher share prices. The capitalist market worked its justice quickly, and the total share value dropped by one billion dollars as the incident and the CEO’s bungled responses became widely publicized. So shareholders, including managers and execs who are compensated with shares, already see the negative consequences. Let’s see how the rest of this plays out, before we blame a “system” for giving rise to such treatment.
The problem is corporatism, socialism in sheep skins. Capitalism created the gift of manned flight. For more see Edmund Phelps, Mass Florishing; EF Schumacher, Small is Beautiful; Adam Smith, Theory of Moral Sentiments and The Wealth of Nations. Fr Martin Jesus gave us the new economy Phelps and the others talk about, business education since 1912 (first MBA) has been trying to revert to the command and control economy that was overturned. I urge you to retract this misguided article. And I'll immediately read it again, will retract this comment of mine if my quick first reading missed your point.
Fr. Martin - I believe you are missing 2 important aspects of the discussion. - First - Yes, airlines are for profit entities and they overbook to maximize profits. Empty airline seats actually cost the airline money though. There are a certain number of passengers required for "break-even" on a flight and if enough people miss the connecting flight, get stuck in traffic or don't plan for the long line at security, the flight will become a debit on the books. If that happens often enough, the flight goes away. If enough flights go away, the airline goes away. Doctors overbook for the same reason. If they have unfilled appointments often enough, eventually, they can't keep the staff level to par and the lights on. The second and more salient point I believe is that consumers are complicit in the overbooking arrangement. There are deals to be had and rewards to be plundered if I am bumped from my flight. The stats for which flights are historically overbooked can be found on travel websites. If you don't care about a scenic night at Dulles Airport, one can get the next vacation flight for free. If you are on business travel when this happens, bonus points because your boss just paid you to sit at Dulles reading the spy novel while you earned $400 in free airline travel for summer vacation.
The way United handled the situation WAS appalling. They should not have waited until the flight was boarded to decide they needed the seats and they should not have escalated it to a police matter when no one else on the flight was interested in playing the trading game. Whatever employee decided it would cost them less to forcibly evict a paying customer rather than put the employees on another flight clearly needs retraining at a minimum. In the post-9/11 police state that air travel has become, however, it is hard to blame the onlookers or other employees for not challenging the authorities on this matter. That type of moral courage is not often found in businessmen on Tuesday travel.
The author is absolutely WRONG! This has nothing to do with CAPITALISM. If beating up paying customers and dragging them out was a means to "maximizing profitability" then why don't we see this at McDonalds and Starbucks? The answer is that the airline industry is one of the most tightly regulated industries. The government, through FAA and TSA regulations, strips people of their rights when they pass through security. The authority of government is conferred to flight crews for the sake of air safety. It is this corrupting nature of absolute power of government over "subjects" that is the root cause of this incident. This is absolute government control of industry and dissent/disagreement/argument/resistance to commands of those in authority is strictly forbidden. This is actually the textbook definition of fascism so it is not at all surprising that we see fascist-like behavior within that system. Industries that operate in free and open markets must consider consequences of poor behavior and, therefore, strive to deliver value, quality and service. In other words, Capitalism is about serving others and being rewarded for serving others well with profits. This article is so wrong it does a disservice to humanity. Father Martin would do well to read Atlas Shrugged by the heathen atheist, Ayn Rand.
It is about the excess of capitalism in the sense that United felt no need to find a solution that treated the passenger with respect. Two possible solutions that could have been used: 1. Hire an uber car or rent a car to get United employees to the destination city . It's not that far away; that was a feasible solution. 2. Keep upping the volunteer offer until it was high enough to entice a passenger to take it. Eventually someone would have volunteered.
There are roughly 60,000 incidents each year of someone being bumped involuntary. How were the employees on a Sunday night supposed to know this was the one to explode? They are limited by company policy on what they can offer as a refund unless approved by someone higher up and by union contracts as to how they can transport the flight crews. Flying is a dangerous activity and rules are precisely written to make thinking out of the box rarely necessary. This is for safety and efficiency reasons.
Also, this was not a United flight but a United Express flight with a Republic plane and a Republic crew. The crew being transported to Louisville was from what I understand another Republic crew.
A bumped passenger can demand cash and could have arranged for his own transportation. I am sure the arrangement of a driver to a place a few hundred miles away is not something that an airline wants to get into. They may rethink this
The real question is why did the bumping of this particular passenger turn into a nightmare for everyone including himself and especially the airline personnel who were involved. The passenger is one of 60,000 each year who have been bumped involuntarily and we have not heard anything this terrible about the others. It is obvious where the feelings on this site are but only a few have looked at the actual behavior of the individual and how it affected others and why did he do it. He is not some civil rights marcher in Selma but someone who had the cheapest ticket on the flight and was first in line to be bumped and resisted the police. This behavior may have led the staff to believe he may be a problem. It was certainly not something that is common.
As I said above it is interesting that $800 was not enough to influence anyone to take the person's place. My wife and I have been bumped a few times over the years and agreed each time to take another flight. It is what people normally do. But this guy resisted the police.
What we have not learned is why the crew was not accommodated on the plane till the last minute. If people had not been allowed to board then we would have never heard of this incident.
Haven't flown for a couple years but air travel becomes more nasty and nonhuman. I guess I'll fly again but I'll look forward to it like I do to my next routine colonoscopy. Now that I think about it, less so, because at least they knock me out for the endoscopy.