Boeing and the bloody fist of free market competition

Who’s to blame for the Boeing 737 Max 8 airplane crashes in Indonesia and Ethiopia – that resulted in the death of 346 people?

It’s actually more important to ask what is to blame for these tragic deaths.

Most will focus on specific aspects - the software, the regulations, or Trump’s connections to Boeing. However, these are only parts of the problems. The real problem is the Capitalist ideology that incentivizes companies to rush products to market, use ‘workarounds', and beat the competition at all costs.

Why is Capitalism responsible?

The story of Boeing’s 737 Max 8 air crashes is a good illustration of how Capitalism organizes people to do outrageous things.  Alan Greenspan came to a similar realization in Congress that it’s a mistake to believe that people who act in their self-interest will somehow make a concert of goodness. It’s just not reality.

Capitalist logic – safeguarding shareholder value to be specific – is what motivated the executives, the managers, the engineers and the US Federal Aviation Authority (FAA) to allow these planes to be put into service. It was precisely the "invisible hand" of free-market competition that motivated Boeing to take short cuts that it did.  The following Vox video explains the issues:

 To recap: Boeing feared that they would lose sales to Airbus’s more fuel-efficient planes the A320neo. Consequently, they also designed larger more fuel-efficient engines. However, there’s a problem with equipping the existing planes with these new engines. They would cause the aircraft to "pitch up under certain circumstances." As a workaround, Boeing installed Maneuvering Characteristics Augmentation System (MCAS) to force the front of the plane downwards to compensate for this problem. The flight that crashed in Indonesia kept pushing the nose downwards and the pilots – who were not trained to work with the MCAS software – were unable to correct the course of the plane. In the Ethiopian crash, CNN reported that "[a] preliminary report by Ethiopian investigators found that a malfunctioning angle of attack sensor on Ethiopian Airlines flight 302 was sending incorrect data to the MCAS system. The MCAS, behaving as if it were in a stall, repeatedly forced the nose of the plane down as the pilots struggled for control, and ultimately the aircraft crashed."

So this is where Capitalism comes into play.

 Why didn’t they redesign the plane from the ground up? Why did they rush to have the aircraft out in the market?

 You guessed it. To increase shareholder value.

 To save money, they tried to make these engines "work" with the existing design of 737, which came about in 1968 – almost three decades before the Internet. The LA Times notes that the “low-to-the-ground design was a plus in 1968, but it has proved to be a constraint that engineers modernizing the 737 have had to work around ever since. The compromises required to push forward a more fuel-efficient version of the plane — with larger engines and altered aerodynamics…”.  The point is that instead of redesigning the plane from the ground up, it's more profitable to try to augment the original design. We should keep in mind that any extra cost would defeat the purpose of installing the engines in the first place – they wanted to offer a price-competitive product to Airbuses' A320neo.

 The second way they wanted to increase shareholder value is by avoiding the expense of training pilots. How? By using the MCAS software, Boeing was hoping to avoid retraining pilots. Ralph Nader, the consumer advocate who took on the car industry, stated the following in an interview, regarding this disaster which took the life of his grandniece, Samya Stumo:

“The focus has got to be on inaccurate or nonexisting information in Boeing’s training manuals and inadequate flight training requirements. They sold this plane on the basis, among other things, of having larger engines. It’s supposed to be 10 percent more fuel-efficient. But they sold it on the grounds that “You don’t have to really train your pilots, airlines. This is really just a small modification of the reliable 737 that’s all over the world.” The question really comes down to cost cutting. They tantalize the airlines by saying, “This isn’t really a new plane. It’s very easy to fly, if you can fly a 737.” And that turned out to be quite false. They had to translate these training manuals into 30 languages—for example, into Amharic in Ethiopia. They had no control over the degree of training for this plane, on the part of the pilots, by the airlines. They took their leisurely time.” [Emphasis added]

Where were the regulators?

The Seattle Times was working on an investigation of the 737 airplanes before the second crash and provided the following insights to why the Federal Aviation Authority failed in stopping the use of this plane:

  • FAA Engineers were not evaluating the final airplane. For example, “MCAS was capable of moving the tail more than four times farther than was stated in the initial safety analysis document.”

  • FAA relied on Boeing to audit itself. The Seattle Times reports: “The FAA, citing lack of funding and resources, has over the years delegated increasing authority to Boeing to take on more of the work of certifying the safety of its own airplanes." Interviewing an FAA engineer who was quoted as saying: “ Management thought we had retained too much at the FAA.”

  • FAA engineers didn’t have enough time/resources: The report also cites a former engineer as saying: “There wasn’t a complete and proper review of the documents...Review was rushed to reach certain certification dates.”

The Seattle Times also found:
“In 2012 the Department of Transportation’s Inspector General sent investigators to interview Federal Aviation Administration (FAA) technical staff in Renton, where engineers working under manager Ali Bahrami were responsible for certifying new planes developed by Boeing.

The investigation substantiated employee allegations that FAA managers did not always support efforts by their technical experts to ensure Boeing complied with safety rules. It found “a negative work environment” where safety engineers feared retaliation “for attempting to hold Boeing accountable.”

Furthermore, it was this committee in 2012 that recommended delegating more certification to manufacturers themselves. Who was on the committee? The leader, Ali Brahimi, was the only government official, whereas the eight other members all were employees of the airplane manufacturers, including the co-chair for Boeing. Furthermore, the lack of funds forced the FAA to rely on the airplane manufacturers themselves to “audit” the safety on the planes.

Consequently, we should realize that regulations within this system are always temporary. The underlying mindset of freedom seeks to eliminate any obstacle that gets in the way of the elite doing what they want with their capital. I highlighted this cycle of regulation and deregulation when discussing banking; the banks got rid of the Depression-era regulations in 1999, which was followed by the Financial Crisis in 2007-2008. Moreover, why wouldn’t big companies – or anyone for that matter – get rid of regulation?  The underlying belief will always compel people to be free of that which impedes them.  

An isolated incident or something deep-rooted?

Obviously, the cheerleaders of the system will isolate the blame to this person or that thing. However, the problem with such an argument is that the majority of companies rush their products to market and make choices with the defects within their products. For example, the IEEE published an article that highlights how software bugs plague everything from the financial industry to airplanes to rail transport. Here's what they noted about software failures in the auto industry:

“…the number of recalls required to fix defects in vehicle electronic/electrical systems has grown 30 percent per year for the past several years. The problems with vehicle electronics continued unabated throughout 2018.

Fiat Chrysler recalled 5.3 million multiple car models for a cruise control issue, while GM recalled one million pickups and SUVs to fix a steering problem. Toyota recalled 2.8 million hybrids, Subaru recalled 640,000 of its vehicles, and Fiat Chrysler recalled 154,000 minivans, each for stalling-related problems. Software fixes were announced as remedies for all of them”.

Consequently, the idea of rushing faulty products to market is widespread precisely because the market rewards such behaviour as it ultimately does increase shareholder value. 

Also, how is such thinking eerily similar to a scandal that came to light in 1999? That time it was GM – instead of Boeing – that was in the headlines for the defect in its 1979 Chevy Malibu that would cause it to explode on a rear-end collision. The lawyer for the accident victims noted that:

“the gas tank on the 1979 Malibu was only 11 inches from the rear bumper; in some earlier models it had been more than 20 inches away. He said the trial testimony showed that it would have cost General Motors $8.59 per vehicle for a safer design but that the company had decided it would be cheaper to settle any lawsuits that arose… One critical piece of evidence, he said, was a memorandum written by an Oldsmobile engineer, Edward Ivey, in 1973, in which Mr. Ivey estimated that fuel-tank fires were costing G.M. only $2.40 per vehicle.”

Initially, the jury awarded $4.9 billion against GM. However, since it is a Capitalist society, the judge in faithful obedience to the real rulers cut that award to $1.2 billion; giving GM a 75% discount on their fines.

What do Boeing’s problems reveal about free market competition?

According to Capitalist theory/propaganda, Boeing should have gone to the wayside because Airbus beat it fair and square with a better engine. However, Boeing didn’t go gently into the night. Instead, they cheated. They took short cuts on re-designing the plane that ended up with the needless death of hundreds of people. Sure their stock will take a pounding. However, no one is going to jail for taking the lives of these 346 people. It’s a good illustration of how the free market is not equipped with an invisible hand, but a bloody fist that continues to smash and destroy the lives of people.