Airports as Institutions

            There is a natural evolution of economic institutions within nations, a distinct path describing how transactions between parties change and transform over the life of the community. Economies begin with small, informal transactions, often coming in the form of village markets and bazaars. Common characteristics include unstandardized units, many small transactions, and likely a personal relationship between seller and buyer. As markets expand and trade starts to spread across larger distances, the agents responsible for the trade become less connected to the original merchant and require formal trade contracts. Larger distances also encourage larger good shipments to capitalize on economies of scale and standardization of units and quality for the goods.

The most established difference as an economy evolves is the personalization of the transaction, which can be seen through institutions such as airports. I have visited a variety of airports in my short life, the smallest of which is Dickinson Theodore Roosevelt Regional Airport. With five gates and just one or two TSA lines, my experience at this airport was one of the most personalized interactions I have ever encountered. My father’s side of the family lives nearby on a farm in Regent, North Dakota, and the airport reflects the rural aesthetic of the area. When each individual passenger accounts for a larger percentage of the total traffic through the terminal, more attention is paid to each person. The result is a personalized situation for each transaction of the experience, from checking one’s bag, to going through security, to the replacement of a store with a solitary vending machine. 

As I sit amongst my classmates at our gate in the SeaTac airport, I cannot help but reflect on the experience of arriving at my current seat. I checked in on a kiosk, one amongst dozens to request the passenger’s confirmation number and print a boarding pass. It wasn’t until I checked my bag that I first spoke to an airline employee, though if one is not checking a bag, as many choose to do, no human interaction would be required. No fewer than seven TSA agents were present in my lane for security, but over half of those were focused on the screen revealing the contents of my bag via the x-ray machine. I moved on to the terminal and the rows of shops peddling snacks, water bottles, books, meals, medications, and more. Each shop and facility is strategically placed to meet the needs of any passenger within a couple hundred meters. Sitting at the gate, I realize nearly all interactions may be automated within a few years and personalization of the transaction completely lost. 

The lack of personalization is not always to be grieved. If SeaTac operated in a manner similar to Dickinson airport and allowed the same amount of informal interactions, the time of each passenger spent in the airport would increase exponentially. People would miss their flights, airplanes would get backed up waiting for passengers, wages to airport employees would soar, and SeaTac would lose money. To serve the needs of each individual, the airport must standardize the interactions with each passenger, requiring fewer employees and decreasing the passenger time spent in lines prior to the flight. In this regard, the transactions and methodology of the SeaTac airport meets the needs of its patrons just as that of the Dickinson airport meets the needs of its patrons through increased personalization. 

At some point in time, the SeaTac airport likely looked similar to the Dickinson airport at present, a handful of gates, one or two contributing airlines, and a coffee shop. As the Seattle metropolitan area grew, so too did the airport, gaining economies of scale by grouping transactions and automating systems. Growing economies likewise must assess the needs, and size, of their respective constituencies. Port towns focus on their trade and mercantilism. Villages rich in natural resources develop large harvesting and mining operations. Fishing towns build large naval fleets and tourist traps provide hospitality facilities. The success, or failure, of each community depends on their response to their evolving economies. 

It’s Day 1 and we’re happy to be setting out on our adventure. Thank you for following us on this exciting journey! The first photo is an aerial view of Dickinson airport, the second is an aerial view of SeaTac (both generously provided by Google Maps), and the third is a group photo taken at our gate.