If Texas leaders are so ‘free market,’ stop protecting auto dealers from internet disruption - The Dallas Morning News

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In a red state like Texas, politicians climb all over each other in a never-ending beauty pageant for who is the most conservative or who is the most free-market of them all. But when you look at what they actually do in Austin, either they don’t know or don’t care how their supposed free-market principles apply in practice.

If you claim to be a proponent of free markets, that means you believe in relatively unregulated markets where the decisions of providers and consumers determine outcomes, not government bias, mandates or regulation. It has nothing to do with particular businesses or business models. If you believe in free markets, you let markets work, and you’re content with however the chips may fall. You don’t try to tilt the playing field in favor of one business over another, or one way of doing business over another.

Being free-market is entirely different than being pro-business. I don’t even know what “pro-business” means, other than doing the bidding of your business contributors. If you’re free-market, you are content with businesses succeeding or failing in the marketplace, depending on how well they compete with each other to serve the needs of consumers.

There are countless examples of political hypocrisy on supposed devotion to free markets, but the one that sticks in my craw at the moment is the way Texas law protects the automobile dealership model against the direct sale model. It is literally illegal in Texas to buy a car directly from the manufacturer. Instead, you are required to buy through the traditional dealership business model. That isn’t free market; that’s protectionism, not of a particular business, but of a single business model.

The internet revolution disrupted numerous business models, including the sale of wine and liquor across state lines, the sale of books (and now everything) through Amazon, the purchase of flights and travel, and many other consumer goods. This internet disruption drove the elimination of many state laws and regulations that were never justified, but which were revealed to be unnecessary barriers once the internet facilitated direct contact between consumers and providers.

Just as you no longer have to go through a travel agent to book a flight or hotel room, you should no longer have to go through a dealership in order to buy a car.

That should be argument enough for the Texas Legislature to eliminate our prohibition against direct sales of automobiles. But what seems to be confusing many is that it’s the manufacturers of electric vehicles that want to sell direct, and Texas politicians seem to be under the mistaken impression that they are supposed to be against electric vehicles. Here is another example of confusion about how to apply conservative principles to public policy.

There is no reason for conservatives to oppose electric vehicles, any more than there would be a reason for conservatives to oppose electric cooktops instead of natural gas stoves. Technology is neutral, and we should not stand in the way of consumers embracing new technologies as they choose to. There is nothing economically conservative about opposing new technologies; in fact, if conservatives want America to remain the global leader in innovation, we must be the leader in creating space for new technologies and innovations rather than trying to stifle them.

Believers in free markets may very well oppose federal and state subsidies for green energy and electric vehicles, but there is no justification for opposing electric vehicles or protecting the dealership business model, despite the lobbying power of the Texas auto dealers.

Texas politicians like to think that Texas is the state with the most freedom, but we aren’t. For one thing, we’re not free to buy vehicles directly from the manufacturers, as are consumers in 31 other states.

There is still enough time in this legislative session for Texas to eliminate this senseless and offensive barrier to consumer freedom. Texans should have the same right that the residents of 31 other states have to purchase electric vehicles directly from manufacturers, and House Bill 4379 would allow them to do so. All we need now is for Texas legislators who claim to believe in free markets to actually live up to their rhetoric.

Tom Giovanetti is president of the Institute for Policy Innovation in Irving. He wrote this column for The Dallas Morning News. Website: ipi.org

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