Opposed Systems Design

Back in the spring, the Economist had a great article about non-monetary inflation in everything from clothing sizes to loyalty programs.

The value of frequent-flyer miles is also being eroded by inflation: it is increasingly hard to book “free” flights; they cost more miles, and redemption fees have increased. This was inevitable: airlines have been issuing so many miles (for spending on the ground as well as in the air) that the total stock is worth more than all the dollar notes and coins in circulation. Central bankers would shudder at such reckless inflationary policies—were they not themselves earning triple miles up in first class.

Exhibit A of this trend is an email I just got from Hilton Honors, announcing that they will be increasing the requirements for Gold and Diamond status in 2013.  An insidious incentive at work here is that one can buy gold status by using one of the Hilton sponsored credit cards with an annual fee - and in order to make that a more valuable perk, Hilton can make it harder for others to earn equivalent status.  United hasn't yet resorted to such draconian tactics to boost the status perks of its credit card, but I wouldn't put it past them.

I travel a fair amount and bitter about the erosion of service, particularly among airlines.  Traveling without status is awful; traveling with modest status is merely acceptable (I find it roughly equivalent to the experience of traveling without status roughly a decade ago).