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Texas a Beacon of Free Enterprise? Hah!

Ask Tesla owners how easy buying the whiz-bang electric car is in the Lone Star State compared to the other 49, and you’ll learn just how much Texas values competition. Indeed, what the Texas Legislature seems to value most is cash.

But there’s a larger problem at play here, in the age of disruptive technologies (Tesla, for example, only sells its cars online. No dealerships, no middlemen.) Like Amazon,Uber, and Netflix, Tesla’s direct-to-consumer model severely damages local businesses, which is why the New Car Dealers Association is spending ferociously to combat it. Amazon first destroyed the bookstore, and now is challenging almost every form of local retail. Uber will eventually upend the taxi franchise — and its $50,000 a month license fees to local government. Netflix is challenging local cable franchises  (and hooray for that). Tesla is only the harbinger of changes that will ultimately disrupt the local franchise arrangement on which the auto industry is built.

Capitalism is disruptive and destructive, we all know that. But before we cheer it on too lustily, Jonathan Coppage warns we had better consider the consequences. Goodbye to the local bookstore, and even to Border’s. Goodbye to taxis. Goodbye to cable (hooray for that). But goodbye to local car dealers? Have we thought that through? In most towns as in Dallas, the local car dealers are among the last major supporters of civic enterprise and charities. We lost our three major banks in the 1980s, and can anyone truly claim we are better off for it? The internet is accelerating the nationalization of business. That may bring more convenience to the local consumer. But what it wreaks on local institutions that are the mainstay of civic society may turn out to be a high price to pay.

That said, it’s gonna happen anyway. Like Canute commanding the tide to halt, neither the Dallas City Council nor the Texas Legislature can stop it.