In reading these reports, one wonders why there are not more air crashes at the nation’s airports, given the sorry state of ATC systems. Not surprisingly, the US Department of Transportation—when confronted with the GAO report—declared that “reinvestment” in the systems will be a top priority.

Yet, “reinvestment” is impossible because the FAA does not “invest” in ATC systems or anything else. Whatever capital equipment the agency uses cannot be termed an investment because the FAA does not turn a profit, so it is impossible to measure any “return on investment” that would come with purchasing new ATC systems. Indeed, as the Fortune article pointed out, the FAA does not use risk assessment or employ other methods that a profit-making entity would do as a matter of course. While this revelation is shocking when one realizes what is at stake, we should not be surprised, given that the FAA cannot engage in economic calculation because of its government agency status.

Of course, all organizations, including government agencies, must use some form of analysis and calculation to make decisions about daily operations and the organization’s future, but the kind of calculation that will be done depends upon whether the entity is profit-seeking or not. Profit-seeking firms—according to Ludwig von Mises in Bureaucracy—will be guided by market prices:

In the capitalist system all designing and planning is based on the market prices. Without them all the projects and blueprints of the engineers would be a mere academic pastime. They would demonstrate what could be done and how. But they would not be in a position to determine whether the realization of a certain project would really increase material well-being or whether it would not, by withdrawing scarce factors of production from other lines, jeopardize the satisfaction of more urgent needs, that is, of needs considered more urgent by the consumers.