How the FAA Is Keeping Flying Cars in Science Fiction

My new piece for FEE

I have a new piece out for the Foundation for Economic Education on flying cars.

The first half of the piece is a redux of the Where’s my Flying Car thesis: Flying cars were technologically and economically possible

Many outright dismiss the idea of flying cars as impossible science fiction, but small, private, point-to-point aircraft are technologically possible and have been for nearly 100 years. Here is one prototype, the 1935 Pitcairn Autogiro, making a near-vertical landing on the National Mall while surrounded by a crowd and then driving to the Bureau of Air Commerce down the street. The fundamental physics and engineering of flying cars was not a constraint in the early 20th century, and it certainly isn’t now, as demonstrated by electric vertical-takeoff-and-landing (VTOL) aircraft like those made by Beta or Joby.

A working prototype is one thing, but the economic constraints are tougher. Carl Benz invented the first recognizable car in 1885, but its impact was relatively small until Ford started mass-manufacturing the Model T 40 years later. Here too, the flying car could have succeeded. The manufacturing of planes was on an exponential curve upwards starting in the ’40s through to the late ’70s, similar to the path that automobile manufacturing had taken 20 years earlier. In 1979, 18,000 general aviation aircraft were shipped, up from under 4,000 in 1950. A Ford Motors feasibility study of the market potential of Moulton Taylor’s Aerocar—one of the first practical flying cars—estimated likely production and sales of 25,000 units a year. A base model Cessna in 1980 cost about $20,000. If that nominal price had tracked overall inflation, it would be around $80,000 today. The supply-side economics of flying cars were surmountable and were on a clear path towards affordable mass-manufacturing.

Despite all this, flying cars never materialized the rest of the general aviation industry cratered and never recovered.

The second half of the piece is a new theory for why this happened. Sure, the FAA has an incredibly long list of burdensome rules that do slow down the industry, but the list of burdensome regulations on cars is even longer! None of these regulations can explain a modern rate of production that’s 30 times lower than what it was in the ’70s.

Instead, it’s about the ordering of enforcement of these laws.

The Department of Transportation (DOT) sets strict safety requirements for cars, but manufacturers are allowed to release new designs without first getting the DOT to sign off that all the requirements have been satisfied. The law is enforced ex post, and the government will impose recalls and fines when manufacturers fail to follow the law.

The FAA, by contrast, enforces all of its safety rules ex ante. Before aircraft manufacturers can do anything with a design, they have to get the FAA’s signoff, which can take more than a decade. This regulatory approach also makes the FAA far more risk-averse, since any problems with an aircraft after release are blamed on the FAA’s failure to catch them. With ex post enforcement, the companies that failed to follow the law would be blamed, and the FAA rewarded, for enforcing recall.

This subtle difference in the ordering of legal enforcement is the major cause of the stagnation of aircraft design and manufacturing.

Not only does pre-market approval add decades to development timelines, it also shifts blame onto the FAA. If a new design gets through with problems, it's the FAA's fault for not catching them in their review process.

Contrast that with cars, where the regulations are enforced post-market with recalls and fines. Here, the manufacturers are blamed for poor products and the DOT is rewarded for enforcing consumer protecting rules.

This importance of ordering generalized beyond the FAA. Much of the FDA’s problems, for example, could be solved by switching to more post-market surveillance rather than pre-market approval. This also means that we can accelerate innovation in these highly regulated areas without weakening any of the safety standards, just change how they are enforced!

Much more in the full piece at FEE.