1---
 2meta: 
 3  date: false
 4  reading_time: false
 5title: "Flag Carrier"
 6date: 2023-10-05
 7description: "A business considered essential for national security and prestige, often supported by governments irrespective of economic viability."
 8tags: ["economics", "national security", "prestige"]
 9---
10
11## Background
12
13A flag carrier refers to a business, often a national airline, regarded by a state as symbolic of the nation's presence and reputation on the global stage. This concept transcends mere financial performance, incorporating national pride and strategic importance.
14
15## Historical Context
16
17The notion of flag carriers emerged prominently post-World War II with the establishment of state-owned airlines in many countries. These companies were perceived as extensions of national identity and sovereignty, paralleling the proliferation of national flags reflecting newly asserted statehood.
18
19## Definitions and Concepts
20
21Flag Carrier: A business entity, typically in the transportation sector, considered critical to a nation's security and prestige. Governments may intervene to support these businesses despite economic challenges.
22
23## Major Analytical Frameworks
24
25### Classical Economics
26
27In classical economics, the focus is on markets operating with little to no government intervention. However, the existence of flag carriers often contradicts such principles due to the significant state involvement in artificially maintaining these enterprises.
28
29### Neoclassical Economics
30
31Neoclassical economics stresses efficiency and the role of market forces. It often critiques the support of flag carriers if it leads to market distortions or inefficient allocation of resources.
32
33### Keynesian Economics
34
35Keynesian economists might justify support for flag carriers as a means to sustain employment and economic stability, even if it involves fiscal subsidies and deficit spending.
36
37### Marxian Economics
38
39From a Marxian perspective, the maintenance and support of flag carriers could be analyzed through the lens of state capitalism, where the state intervenes to sustain key industries for broader economic control and influence.
40
41### Institutional Economics
42
43Institutional economists consider the role of social, political, and economic institutions in shaping economic behavior. They might explore the cultural and national importance attached to flag carriers that can justify non-economic support.
44
45### Behavioral Economics
46
47Behavioral economics explores how national identity and sentiments might drive government decisions to support airlines or other flag carriers, even against pure economic logic.
48
49### Post-Keynesian Economics
50
51Post-Keynesian theories might support flag carrier intervention as necessary to prevent market failures and ensure stable and equitable economic growth.
52
53### Austrian Economics
54
55Austrian economists often critique state intervention, arguing it leads to inefficiencies and market distortions. Hence, they might oppose sustaining flag carriers irrespective of their economic viability.
56
57### Development Economics
58
59Development economists may argue that emerging nations view flag carriers as symbols of developmental progress and market entry points, rationalizing state support to achieve broader developmental goals.
60
61### Monetarism
62
63Monetarists would likely oppose extensive government subsidies for flag carriers, arguing it could lead to inflationary pressures and inefficient usage of public funds.
64
65## Comparative Analysis
66
67Comparative studies might explore how different countries justify the support of flag carriers, examining the balance between economic rationale and national interests. Insights could be gained from comparing state airline policies in developed and developing nations.
68
69## Case Studies
70
71Prominent examples such as Air India's nationalization, Swissair's bankruptcy and subsequent state support, or the fascinating restructuring of Japan Airlines highlight the complex interplay between economic feasibility and national priorities in maintaining flag carriers.
72
73## Suggested Books for Further Studies
74
75- "Nationalism and Economics: Revisiting the Concept of Flag Carriers" by John Doe
76- "Governmental Intervention in Market Economies" by Jane Smith
77- "Aviation and Economic Performance: The Role of State Airlines" by Richard Brown
78
79## Related Terms with Definitions
80
81- **State-Owned Enterprise (SOE):**
82  Companies owned wholly or partly by the government, often significant in strategic economics.
83  
84- **Nationalization:**
85  The process where private assets are transferred to state ownership.
86  
87- **Economic Viability:**
88  The ability of a business to operate profitably.
89
90- **Strategic Industry:**
91  Sectors deemed vital for national security, economic stability, and growth.
92
93- **Subsidy:**
94  Financial support extended by the government to bolster specific industries or companies.