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As conservatives and free-marketeers, we’re familiar with the way large businesses and entrenched interests weaponize political power by passing new regulations. Given enough time, skill, and sleaze, they can use government to keep all would-be competitors at bay and achieve de facto monopolies. But there’s another model of regulatory abuse that often gets less attention and is actually more insidious: Getting tailor-made, exclusive exemptions from general laws for oneself while leaving everyone else stuck with the old system.
Tesla Motors’ continued efforts to gain exemption from laws banning direct vehicle sales are a good example. Until recently, most states prohibited car manufacturers from directly selling vehicles to consumers, forcing them to purchase vehicles through car dealerships. Tesla — a high-end electric car manufacturer — doesn’t like this model and has lobbied for exemptions from these rules, either for electric vehicles as a class or under conditions that all-but-explicitly restrict this perk to Tesla itself.
There’s no question that the laws prohibiting directly sales are little more than a protection scheme for car dealerships. It’s not that there’s anything necessarily wrong with this model of purchase — I strongly suspect it’s inefficient, but that’s neither here nor there — but there’s no reason for government to play favorites by prohibiting its citizens from freely purchasing a new vehicle in the manner they prefer, so long as no third party is directly harmed. As it is, dealers who defend the program simultaneously insist that they provide customers with an irreplaceable, valuable, and essential service and that they could not make it without government protection. Either claim may well be true; both cannot be.
The proper solution to this problem is to remove the dealer requirement entirely, not create a loophole that trades a narrow gain in liberty for the solidification of the existing scheme and an unnecessary complexity. Just like the car dealers, Telsa makes a good product that people want to buy. They should be able to sell it without the state running interference on its behalf, whether against gasoline-powered cars or other electric manufacturers. They should be pilloried for trying to do this under the guise of regulation.
Laws work best when their use is restricted to matters where the harm is clear and the exemptions few and far between. When you have to create permanent carve-outs — and carve-outs to the carve-outs — to promote justice, chances are you’re using the wrong tool.Published in