Let Tesla Compete, Say FTC Officials

Is the Federal Trade Commission for a free-market economy? A recent blog post by three of its top officials could almost make you think so. The directors of the FTC’s Office of Policy Planning, Bureau of Competition, and Bureau of Economics have a message for state regulators: Let Tesla compete!

Tesla sells its cars directly to consumers, challenging the traditional model of selling cars through franchised dealerships. States such as New Jersey and Texas  have made that illegal, and North Carolina’s state senate tried to do the same. The FTC blog post argues that these laws restrict consumer choice for no good reason. Tesla, it says, should get to use the business model it thinks best—and in the long run, what business models are used should depend on the same “competitive process” that determines which car models succeed. Let different businesses try different ideas, and the market will make its choices. The FTC staffers support their case by pointing to some of the great business achievements of the Internet age. You might well mistake these bureaucrats for free marketeers, and indeed, they defend the free-market view on this specific question: No, they say, governments should not stop Tesla from selling its cars directly to consumers.

Although the FTC, which has the power to enforce antitrust laws, can crack down on many anticompetitive measures, there's very little it can do about these regulations: there's an exception to antitrust for state laws. The blog post must be viewed as a sort of moral exhortation. Let us consider what moral code it displays.

If you read the post with an eye toward its basic premises, you’ll notice that the whole case rests on the authors’ judgment of consumers’ best interests. Regulations that protect consumers are OK, they assume, it’s just that these particular regulations make consumers worse off. The rights of the producers don’t enter into it.

What we see in the post is the perspective of economic managers—the perspective of antitrust law . Often, as here, such a perspective shows reasons for the government to get out of a producer’s way. But if we accept that this is the perspective from which the economy should be governed, we accept that all our productive activities are subject to government management . Sometimes that management will be permissive . But not all the time .

ЭКСПЛУАТАЦИЯ:

• Alexander R. Cohen, How Antitrust Competes against Freedom
• Alexander R. Cohen, The Essential Evil of Antitrust Law (video)
• William R Thomas, Republican Cronies versus Business Freedom, North Carolina Edition
• Alexander R. Cohen, Tesla's Rights and New Jersey's Regulations (video)

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