Alfred E. Kahn, chairman of the New York State Public Service Commission, will be named to succeed John E. Robson as chairman of the Civil Aeronautics Board, sources said yesterday.
The 59-year-old economist and college professor-turned-regular declined the offer of the nomination when it was made several weeks ago but apparently changed his mind after the White House "began putting the screws on him," according to one source. Kahn declined to confirm the expected nomination in a telephone interview.
Sources say the White House is planning to name a total of three new members - including the first woman - to the five-member board, which has regulated the airlines' rates and routes since 1938.
One of the new members would replace G. Joseph Minetti, a Democrat, who has been on the board 21 years. Minetti, who turned 70 on April 21, would need an annual presidential waiver to remain on the board because of a federal law requiring retirement at 70.
The other proposed board member would replace R. Tenney Johnson, a Republican, whose term expired at the end of December but who has been serving, as permitted, until a replacement is confirmed Johnson came to the board last March.
Kahn is a strong believer in the benefits of competition and can be expected to continue the board on the pro-competitive course it has been on recently. "I think it'll be a helluva good appointment," departing chairman Robson said yesterday.
Two years ago Kahn, while emphasizing that he was not an expert on the airline industry, testified about the "very imperfect" nature of regulation as an institution. He was a witness at a hearing about the airline industry and the CAB before the Senate administrative Practice and Procedure subcommittee.
KKahn suggested that, in generally regulation and competition are antithetical since regulation creates in the regulator an "enormous responsibility" for the continuing health of the incumbent firms in the regulated industry. That tends, he said, to breed inefficiency, cartelization and excessive prices where industires should naturally be competitive.
"All these tendencies of regulation in a structurally competitive industry inescapabley raise the question of whether it would not be preferable simply to abandon economic regulation and open the field to competition," Kahn concluded.
In a short but lively question-and-answer session after his testimony, Kahn was asked by Sen. Edward M. Kennedy (D-Mass.), the subcommittee's chairman that time, about the airline industry's oil-repeated claim that reduced regulation would result in "destructive competition" which could end up hurting the consumer by producing a less reliable air system.
"No businessman protected from competition ever believes competition is anything but destructive," Kahn replied. ". . . He does not use the word 'competitor,' he uses 'chiseler.'"
Kennedy then asked. "Do you think it would be useful to have somebody on the board who is an economist?"
"Why I think it would be marvelous," Kahn said. "An economist tends to think in terms of benefits versus costs. Every decision we make in our society today is a benefit-cost measurement whether we like it or not. "However, he cautioned. "It might be fatal if they are all economists."
Kahn has written extensively on competition and regulation: his most recent book is the two-volume Ecomomics of Regulation, published in 1971. He became chairman of the New York Public Service Commission in 1974. He is currently on leave from Cornell Unversity.