WHEN the European nations first sailed out across the oceans they carried an economic fallacy. First, the Portuguese caravelas bobbed out in the Atlantic, followed by the French, Spanish, Dutch and Brits, with the Germans coming late to the game. Every nation applied a version of what we called The Navigation Acts, by which ships could ply only routes authorised by their national authorities. Colonial ports could trade only with their home country.
The great achievement of Adam Smith (and the other writers of the Scottish Enlightenment) was to demonstrate that this protected trade system was absurd and impoverishing to everyone. We all know about The Boston Tea Party as a valiant first effort to throw off the imperial yoke. It was a tax revolt against the Royal Navy blocking non-British ships from entering the harbour - and stopping American trade being carried on the ships of other nations.
Gradually the conspiracy to close sea traffic in this stupid bi-lateral manner dissolved. It was seen to be an intellectual error based on an erroneous assumption "exports" were virtuous but "imports" sinful. All trade is trade - ie mutually beneficial. If it werenât, it would not happen.
Yet the worldâs airlines live under an extraordinary regime as wrong-headed as all the Navigation Acts. Airlines cannot fly where they want, when they want, charging what they want. They cannot freely buy other airlines. Not one in 1,000 politicians understands this. Those gleaming jets with the latest technical wizardry seem to be the very embodiment of modernity, but they fly through thick fogs of ancient bureaucracy.
One joyful proof of this has been the emergence of the low cost airlines. Ryanair and EasyJet have amazed us all with their cut-price offers. The impediment is they cannot ply the most profitable routes. The "national flag" carriers enjoy subtle privileges few of us can appreciate. British Airways has the ownership of vast banks of "slots" at Heath-row and Gatwick airports. Slots are the right to take off and land. These prized properties were often awarded in the 1930s.
It amazes me that services from Heathrow to the US are open to only four airlines - BA, Virgin, United and American have a stranglehold. We need a popular revolt against these bizarre restrictive practices. A few more events like the Boston Tea Party would do nicely. I want to be invited to The Heathrow Slots Party.
All these themes are in play this week as the US government is opening negotiations with the European Union to liberalise the