service, the number of air passengers doubled from the late 1970s to the start of the 2000s—an increase that, in

turn, doubled the number of jobs in the airline industry. Meanwhile, with the watchful oversight of government

safety inspectors, commercial air travel has continued to get safer over time.

The U.S. airline industry is far from perfect. For example, a string of mergers in recent years has raised concerns over

how competition might be compromised.

One difficulty with government price regulation is what economists call regulatory capture, in which the firms
272 11 • Monopoly and Antitrust Policy

that are supposedly regulated end up playing a large role in setting the regulations that they will follow. When

the airline industry was regulated, for example, it suggested appointees to the regulatory board, sent lobbyists

to argue with the board, provided most of the information on which the board made decisions, and offered
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