Mar 18, 2014

Posted in Uncategorized

Ubertarians, Meet Teslarchists

I have previously commented on the phenomenon of the so-called “ubertarians.”

D.C. is home to a growing and curious breed, progressive young professionals who bemoan the city’s income inequality one instant and approach a black limo the next, asking “Are you my Uber?”; who condemn the government for under-regulating the banks and for over-regulating businesses and developers; who lament the decline of American labor but wish the teachers’ union didn’t have so much power in D.C. schools.

They support government regulation—except when it inconveniences them. Clamping down on the big banks? Yes, please. Tighter safety standards? Love ‘em. Restrictions on app-based taxi competitors, or on the number of bars or restaurants in their neighborhood? An outrageous imposition on the free market!

How is it that progressives, who otherwise favor all sorts of forms of economic regulation, occupational licensing schemes, and unnecessary barriers to entry, find this single cartel–taxi cabs–is unnecessary.

Well, many progressives have suddenly found another cartel they can’t stand. New Jersey, as well as Texas, and Arizona, only permit the sale of cars through in-state car dealerships. This renders the Tesla sales model–selling direct to consumers–illegal in many states.

And you know what? Elon Musk and other Tesla aficionados are objecting, and seek to deregulate (unregulate really) the market to sell cars.

These are the Teslarchists–Tesla Anarchists. Libertarians are often (inaccurately) assailed as anarchists. This is a law whose purpose is economic protectionism. Yet, there are many species of this law that do just that.

If only more progressives discover the harmful nature of cartels, we would all be better off. Ubertarians and Teslarchists unite!

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  • Shane

    I can mainly speak for my own point of view, but I imagine that there are others in the same boat as me. I’m an unabashed free-market liberal, and while others might think I hold many contradictory views, it actually makes cohesive sense to me.

    I’m a big fan of Madison’s writing, in Federalist No. 10, on the danger of majority factions taking control in smaller democratic bodies. With a smaller constituency, it’s much easier for bad ideas to take hold of a majority opinion, at least in smaller jurisdictions. To me, the ever-present danger of rent-seeking and regulatory capture therefore weighs against giving smaller jurisdictions much power to interfere with individual liberties. In this case, it’s an economic freedom argument, and I’m all for limiting the power of municipalities to govern things like licensing, zoning, etc.

    At the same time, I don’t actually have a problem with a very powerful central government that has the power to pass and enforce economic regulations. Many competing interest groups temper the effect of any one, and the nation is large enough (and enough eyes are on D.C.) that they could never get away with what city councils, mayors, police chiefs, etc., do on a daily basis in our nation’s cities.

    I also believe that spreading the tax base and the spending base wide across a larger population makes for a less volatile fiscal environment, especially on things the government does that look a lot like insurance and risk pools. Most obviously, it’s nice to be able to recruit servicemen from all 50 states when Hawaii is being bombed. It’s nice to be able to tax Californians to provide hurricane relief to Florida, and to tax Florida when Californians need earthquake relief. A plant closure could be devastating to a local economy while it barely registers as a blip on the national economy. As a result, I look at the fiscal picture and see desirability in giving the large central government more power than distributing it to local governments.

    I understand there’s a tradeoff, but I’d rather have mild injustice distributed broadly than intense injustice targeted in particular pockets.

    That’s why I have no problem with saying that cities should only minimally regulate Uber, or Lyft, or food trucks, or barber licensing, or mandatory parking minimums, or building height limits, or zoning restrictions, or alcohol licensing, etc. At the same time, I have no problem with saying that we should have a heavily regulated national health insurance scheme, and a strongly progressive taxation scheme, and nationally funded welfare/disability/unemployment benefits, heavy federal investment in infrastructure, etc. I’d like to see federally regulated market pricing of pollution externalities, fish shares, water rights management, game/lumber/mineral management, etc.

    In other words, I’m always against rent seeking, but I’m much more willing to tolerate it as a compromise when certain other interests are at play (which tends to translate into much higher skepticism of local regulations than federal regulations).