Paternalistic meddling with free consumer choices is always fraught with peril.
Sometimes it is necessary to protect important principles in society. You can't discriminate based on race - that limits choice but who would support the contrary? You can't defraud people in selling products - ditto. You can't buy land to build a smokestack plant in a quiet residential neighborhood - ditto. Many other examples might be cited. In all such cases, the law intervenes to limit private choices. And there are few who would not applaud most such limits. Private choice is not the end all and be all of a society.
Yet, in a free society, private choice should be the overwhelming norm and it should require surmounting very large barriers before legal meddling can limit the choices people can make to serve their own best interests.
Unfortunately, in old-line industries, this idea got flipped and, for years, private choice succumbed to whatever a combination of big government, big corporations, and big unions dictated to the public. Back in the day, writers such as John Kenneth Galbraith even used to celebrate the idea of a "new industrial state" in which the old private competition would yield to ever increasing concentrations of power among government, industry, and labor, who would in turn find ways to "cooperate" with one another in ushering in a more enlightened form of carving up markets and their benefits than mere freedom and competition might provide.
Well, the bureaucratic edict in New Jersey is a relic of that old thinking, perhaps perversely and cynically applied to buy off lobbyists and influencers but rationalized nonetheless by the old paternalistic thinking that the consumer is ultimately best served by having his betters making his buying choices for him rather than being allowed to make them for himself.
Other than in this cynical sense, there is no possible way in which this outrage can possibly be characterized as "protecting" the consumer.
Perhaps the main contribution made by the tech revolution since the 1970s is that it ushered in an era of huge freedom in how people managed their private lives. The internet in particular has been a huge liberating force and so young people especially have come to take it for granted that they can freely make all sorts of choices without having to feel burdened or restricted by the heavy hand of the law. Of course, exceptions can and do remain because abuses can pop up in all sorts of ways without any legal restraints. But, that said, the overwhelming presumption today is that, yes, I can do pretty much what I feel is best for me unless there is a very good reason why I should be restricted from doing so.
And that means, if I live in New Jersey, I should be able to find a local Tesla outlet in which I can buy my electric car if I want. The thought that some politician or bureaucrat should be able to dictate serious limits on that choice is repugnant to anyone who thinks that way. And, in my view, rightly so.
Unfortunately, where the old political pull persists, the law can be abused to protect old-line market players under some guise or other that is a mere pretext for guarding them from competitors who might offer something better and wind up dislodging them in a free market. Legal regulation is not to be rejected out of hand, of course. Maybe the old-line taxi services ought not to have their business cherry-picked by new market entrants who do things differently. Maybe there ought to be some limits in an urban context on absolute free space-letting if this creates nuisances or the like. The line can sometimes be tricky to draw and can require careful and fair-minded judgments given the interests at stake. But how often do we have situations where nothing of the kind happens and instead the issues are decided, in essence, by who pays off whom and who has what degree of political or bureaucratic pull that can be used to protect systems and structures that are far inferior to what the new competition might offer.
I believe that, in these sorts of cases, the tech impetus will ultimately prevail and push things toward broader and freer areas of choice for consumers. Even with this rear-guard action in New Jersey, Teslas can be bought direct from the manufacturer just a short distance away or via remote ordering. And tech-inspired sales and distribution methods in this and a broad swath of other fields will mean that those seeking to limit consumer choice by protecting local turf through bureaucratic pull will be fighting what will ultimately prove to be a losing battle. As consumers, we are not bottled up anymore. If we don't like something that is really stupid, we can more and more work around it using other solutions.
And so we can, I think, basically see that what the local commission is trying to do in New Jersey is much more a last gasp for the old ways as opposed to being a harbinger that will limit Tesla (or any similar new-wave competitor) from accomplishing its goals. Tesla is right to oppose and fight it (and presents a compelling argument for its view). But the action stands out as so bizarre precisely because it is so out of step with the tech impetus that rules our day. It will stand legally (courts are loathe to intervene in such matters). But the longer-term political winds are against it, in my view, and it will prove a temporary obstacle at most as the modern tech impetus advances.
>Paternalistic meddling with free consumer choices is always fraught with peril.
Actually I'd say that governments typically get away with paternalistic medding with free consumer choices.
Elon Musk has the right of this argument, and it's heartening to see a CEO take aim at the politicians that are doing that paternalistic meddling.
But I don't see Tesla's CEO fighting back against paternalistic governmental meddling that artificially raises the price of gas cars while producing artificial revenue for Tesla:
http://blog.heritage.org/2013/03/04/cant-afford-a-new-car-wa...
By the government’s own account, the stringent new CAFE standards will increase the average cost of a new car by $3,000 in 2025. The Energy Information Administration warned that new cars priced under $15,000 may no longer be available by 2025.
http://www.marketplace.org/topics/sustainability/teslas-secr...
If a company comes up short, it has to pay a penalty of up to $5,000 per credit. Or it can buy credits from a company like Tesla, which happens to earn a lot of credits on every car it makes. Tesla has sold enough credits to post its first profit.
Conventional gas cars produce massive negative externalities that, if not accounted for (by charging any of the parties indirectly or directly involved in producing them), lead to market inefficiencies. The very nature of externalities makes it that they are very difficult to accurately measure, but rest assured, whatever extra cost new CAFE standards bring is not merely a drop in the bucket for the damage already produced and unremedied.
So here the government is ensuring a more efficient and free market, not doing any "paternalistic meddling".
Even if you're right about the "massive negative externalities," what makes you think the government's Absolutely Non-Paternalistic Meddling here gets it right?
Also, even Absolutely Non-Paternalistic Meddling can lead to other massive negative externalities by significantly increasing the cost of new cars (see my link above). Then consumers are less likely to purchase newer cars that, all else being equal, tend to be safer. So we have more deaths.
So, again, even if you're right about these "massive negative externalities," presumably meaning environmental effects, does that justify killing your fellow citizens by dooming the less affluent to drive older, less-safe cars?
Yes, economists will argue that gasoline taxes are a more efficient and effective way of getting what we want (an efficient amount of gasoline consumption that accounts for its external costs).
Politicians will counter that gas taxes are unpalatable for political reasons, so we have to do something else that's kinda like an indirect gas tax (reduces consumption, makes using it more expensive). I'm open to arguments about us going too far here, but at the same time I don't think the perfect should be the enemy of the good.
>> Politicians will counter that gas taxes are unpalatable for political reasons
What does that mean (in plain language)? Why should people accept it as an excuse for not choosing the more efficient solution?
It isn't about what people should accept, it's about what they will accept. Voters aren't rational, and they're more likely to kick up a fuss about fuel taxes than vehicle taxes because it affects more of them in the short term.
Maybe taxes on vehicles are more likely to be passed, and not much worse than taxes on fuel. In that case they may be worthwhile as a compromise solution. They're certainly not a better solution, though.
Holding politicians to account for not being sensible is laudable, but more important is to make noise. Demonstrate that voters are rational in a way that they can recognise, and they might listen. Voting isn't enough, it just gets lost in the noise.
Huh? Voters are quite rational. If you mean they don't pay attention to everything that's happening in Washington, D.C. or state capitols, that's perfectly rational. (Remember you're more likely to win the lottery than to have your vote changing the outcome of an election.) Economics call this, correctly, "rational ignorance"
http://en.wikipedia.org/wiki/Rational_ignorance
Politicians and bureaucrats are also rational. Unfortunately this rationality means they put their private interests above the public interest (whatever that means). The influence of special interest groups, the revolving door between .gov and lobbying, these are all elements of it:
http://en.wikipedia.org/wiki/Public_choice
Ugh. It was clear when I said that "voters aren't rational" that I meant "Voters as a class do not vote in their own best interests." No reasonable person reading my post and trying to understand what I meant would have interpreted that statement to refer to the fashionable (and absurd) game-theoretic definition of "rationality".
(Not to mention that "rational ignorance" doesn't explain current voting patterns. Nobody informs themselves politically according to a mixed strategy, and deliberately uninformed people do not abstain from the voting process.)
i think that's generally taken to mean that the voters do the most optimal thing for themselves, but the whole system ends up being sub-optimal. Some call it the tragedy of the commons.
Infrastructure and people's lives have been organised around today's tax regime. America's historically low gas prices mean houses, jobs and retail are spread out over more area, and public transport is comparatively poor.
If gas prices trebled tomorrow, you'll find a lot of hard-working poor people who have to pay three times as much to get to their low-paying jobs.
There will be sob stories on the news about regular people people who can't afford to move closer to work (houses there are expensive now due to high demand) and who can't afford a more efficient car (as they can't pay off the loan on their SUV which is now worth less than the loan value).
Maybe some young people get fuel efficient motorbikes, like in the developing world. There's a rise in road deaths, of course; everyone knows motorbikes are dangerous.
And it won't just be people commuting to work. It'll be more expensive to get to the shops for food - bicycling or walking isn't an option for the hard-working american mother who has to shop for the family, and who has a newborn baby to look after (which is what your political opponents' attack ads will show).
And how do you think that food gets to the shop? On a gas-powered truck of course. And farm machines run on gas as well. Order everything online? The delivery truck runs on gas. You get your trash picked up? Someone's paying to gas up the truck. You're doing construction? Those backhoes and generators all run on gas. Tradespeople like plumbers and builders? Can't carry that roofing ladder on a bus you know. Fire trucks, police cars, ambulances? Gee, I guess they all run on gas. Buses and removal trucks? Same thing. It costs so much to get Jenny to soccer practice now, and how is little Jimmy supposed to get his double bass to after-school orchestra?
Now everything is more expensive, and everyone has less disposable income. People have to get by with less, so they don't go to the restaurant, they make the old car last a few years longer, and the restaurant and car plant have to lay people off, and you've triggered another recession.
Meanwhile, your busy job as a legislator means you still get driven everywhere, so you come across looking like a huge hypocrite.
Now you've put a regressive tax on getting to work, you've caused a rise in traffic accidents, you're anti-family, you've raised the prices of everything, you've triggered a recession, and you're a hypocrite. In exchange you've got the support of the green lobby, but many of them are having second thoughts.
Aren't the CAFE standards to offset the emissions and damage caused by them since you can't directly bill that to an individual user of a specific car? It seems like it would be better to just add a carbon tax to gasoline but I assume that is significantly more unpalatable than the CAFE standards. Tesla's portion of a tax with similar intent is baked into the cost of electricity so consumers pay for it gradually rather than in a lump sum when purchasing the car.
>But I don't see Tesla's CEO fighting back against paternalistic governmental meddling that artificially raises the price of gas cars while producing artificial revenue for Tesla
Tesla is benefiting from government intervention much more directly. I'm surprised that nobody else has mentioned this yet.
While I agree with the spirit of your post and that of Mr. Musk, there's something missing here.
Contrary to Mr. Musk's assertion of conspiracy, what seems to have happened here is that there were some unfortunate laws on the books that weren't being enforced. Various business interests (ie the car dealers) complained to the Motor Vehicle Commission. The MVC created a new regulation to reflect the laws already on the books.
Unfortunate? Yes. Should that law get repealed? Absolutely. Should the Governor get involved and push to get the law fixed? Yes.
Conspiracy? No. Suggestions of mafia-like behavior? Childish and insulting, but definitely gets headlines and attention.
There are all sorts of laws on the books that we've agreed are idiotic and are no longer enforced. It's up to the executive to determine which those ones are, and, as time progresses, some laws become so outdated that no rational minded person would ever think of enforcing them.
What if the law had suggested that Office and Automotive equipment could not be sold directly (perhaps harkening back to a time when the Large Automotive and Office Equipment resellers had built up their distributorship); are you seriously suggesting that means Apple Stores should have been shut down in New Jersey?
There are all sorts of laws on the books that we've agreed are idiotic and are no longer enforced. It's up to the executive to determine which those ones are, and, as time progresses, some laws become so outdated that no rational minded person would ever think of enforcing them.
Europeans (mostly Germans) I've talked to about how we do this in the US shake their heads. These shenanigans along with the "speed limit+9mph" informal rule make them comment that the US is really a stealth police state.
EDIT: There's a precedent for "two sets of laws" in the US, some of the most prominent of which are related to civil rights and sexual orientation.
Just to clarify for any europeans who might have read this, ""speed limit+9mph" informal rule " - is a rule (at least in California) for what your minimum speed on the freeway/highway should politely be.
Anybody traveling slower than this needs to be in the slower right lanes to avoid getting tailgated or inspiring road rage.
I've often wondered if anybody traveling at (or just over) the speed limit on the freeway has ever been pulled over by the police for obstructing the flow of traffic.
I'm european and i can tell you that you will get tailgated, headlight-flashed and all around road-raged if you drive at the speed limit in the left-most highway lane in EVERY SINGLE EU country.
Some states have laws that restrict use of left lanes for passing. Many states have laws requiring drivers who are moving slower than the rest of the traffic, regardless of the speed limit, to keep right.
Most of the time if somebody is going the speed limit for any length of time in the left lane, there often is legitimately is an issue that they can be ticketed for.
I'm pretty sure that "speed limit + 9mph" refers to the unwritten rule that you are allowed to exceed the speed limit by 9mph and not get a ticket. Cops don't typically pull people over for less than 10mph over the limit on the freeway. They are allowed to (and do at times if they have a particular bug in their hat or have a quota to fill) but that is not the norm.
Based on the California driving code you are supposed to keep up with the flow of the traffic on the road around you so if the rest of the road is going 70mph in theory you could get a ticket for doing 60mph.
Generally unless you are the only car on the road or you are weaving dangerously between cars at high speed its unlikely you will get a speeding ticket if you are part of a pack of cars for this reason.
Then again I'm not a lawyer so don't go off my knowledge ;)
No - I was absolutely serious. If you travel slower than Speed Limit + 9 in the left-most lane when traffic is clear, you will annoy people, cause people to swerve around you, and generally increase the odds of an accident.
Drivers who are driving slower than this speed need to move over rightwards. Speed Limit + 9 is a minimum speed for the leftmost lane.
I'm not particularly well versed in the specifics of the Tesla situation, and I'm not a lawyer, by any means; I'm saying this as a general consideration. I would tend toward thinking that the selective enforcement or reinforcement of antiquated laws could be seen as just as negative, if the outcome is the same.
I believe you can fill your own car if it takes diesel fuel.
(This is probably not that interesting to most people, not even those who live in New Jersey, but it might be some evidence for - or, perhaps, against... - the idea that this is a strange law.)
The last time I was in NJ, the full-service gas there was the same price as the self-serve in suburban NY. Maybe that's changed, but given the hug number of commuters in NJ, I conclude it likely that holy hell would have been raised of full-serve was significantly more expensive.
States impose different taxes on their gas. Presumably if NJ allowed self-pump, those prices would be slightly lower.
However, in the grand scheme of things, the eliminating the payroll costs from the gas price in NJ would barely have any impact.
At a normal gas station which is neither busy nor desolate, an attendant may be able to serve, let's say, 30 cars an hour. If they each get $20 worth of gas, and the total cost of the employee per hour is $20, then the prices would go down only a fraction of a percent if he was eliminated.
This doesn't take into account the missed sales when stations are closed, nor the cost to the community of having police officers police this (yes, they do even though the pumps shut off automatically).
> I don't know what the party line is to justify the gas attendant rules.
Blatant employment protectionism. Every time it comes up on a ballot the "statement in favor" is always primarily employment protectionism. The arguments are generally of the form "if we allowed self service, nobody would pay for full service, and those jobs would go away".
As with many similarly obnoxious laws: Portland votes for it, the rest of Oregon votes against it, and Portland wins.
I figure this will change soon enough, now that $15 minimum wage laws are becoming popular causes in this neck of the woods. The broken-window fallacy is about to get really expensive for Oregonians.
All they need is a good advertising campaign. Another poster put the cost of a dedicated pumping employee at a 3.3% of fuel served. That's 11-12 cents per gallon in Oregon. Consumers would be all for that, assuming they knew about it (and could be confident it would be passed on to them.)
Who actually lobbies for it? I can't imagine that gas station attendants themselves have much sway, and I don't see why station owners would want to keep it that way.
Is it just regular old people in Portland who honestly believe it is best, even without any lobbying or propaganda?
People aren't smart. They like full-service, and they know it'd disappear if it wasn't the law. What they don't realise is that the reason it'd disappear is that they don't like it enough to pay extra for it.
The stations themselves might not be against full-service, either (at least away from state borders.) It's an extra cost, true, but it's paid by all of their competitors, too, so it just drives prices up. Demand is pretty inelastic, so profits aren't much affected. This might change with electric and fuel-efficient cars becoming more common, but it's hard to think long-term when you're selling oil.
Alternatively, it could be that people do like full service enough to pay for this, but act irrationally at the pump, not the ballot box. I.e. people undervalue their own comfort and do things themselves because the idea of paying more seems so objectionable.
This has occurred to me with airlines as well - we relentlessly optimise for cheap flights, and then complain that we're crammed in to tiny seats while flight attendants hawk duty free goods to us. Maybe we'd actually be happier if the cheapest flights were actually 50% more expensive and nicer, even though that's not what we choose.
Cool idea. Reading your post I thought, "This is obviously wrong," but it's growing on me the more I think about it (making it the best kind of comment to read.)
I experience the same thing with charitable giving. While I think I give a reasonable-ish amount out of pocket compared to most people, I absolutely don't give enough to match my ideals - fundamentally, the money is there, in my pocket, and it's hard to part with. On the other hand, at the ballot box, I always vote for parties that tend more redistributive (and since I earn decently, likely to raise my taxes). It's a much easier decision to make when there's that degree of separation.
Shouldn't you vote for the party that's best for the less-well off, and not the one that most redistributive? (OK, if you are eg in the US, there's not that much choice in the first place.)
I live in the UK, which like the US has serious problems with income gaps and class mobility. When I say redistributive, I should clarify that I don't just mean 'here poor person, have some money', but more that I would aim towards a more Scandinavian-style economy, where more money/effort is spent on social programs.
There are a couple of petrol stations near me that have recently started offering optional attendant service at peak periods, for no extra charge. This has been some time coming, I must say; last time I saw attendant service, it was probably the mid 1980s, and that petrol station was famous for being the only place in town that offered it. But anyway - even if it's got rid of, it may yet come back.
(I have no idea what's caused this. My personal theory is that it improves throughput at busy periods; many UK petrol stations have closed over the past 10-15 years due to the wafer-thin profit margins so those that are left can often get quite busy. But that's just a guess.)
I have tried to light gasoline with a cigarette. After several hours of trying, I finally figured out how to do it. It requires smoking the cigarette with vacuum cleaner, while spraying compressed oxygen. You then get a small flame on the paper which will ignite the gas.
My tests suggest pumping gas wearing a sweater is probably more dangerous than smoking. Igniting vapors with a static spark is actually much easier.
If you car is newer than 2006, there is basically zero chance you are in any danger. The ORVR systems are a really nice piece of engineering that is mandatory.
I once had a sweet, innocent, virgin girlfriend who was raised in
New Jersey. She arrived in Califirnia, and We started to
go out. As I got to know her--I saw the New Jersey upbringing peak out. I started slowly. Her major in college changed to business. She believed it was O.k. to cheat in order to pass a test. She believed it was just
fine to step on people to get ahead. She would make a sandwich, after sex, and always give me the smaller half.
Oh yea, she really didn't care about the homeless, animals,
or anyone other than herself and mom. At first--I just thought she was young and naive, but after awhile I think
New Jersey rubbed off? I always thought what I would say
to her if I ran into her. I think it would be, "Let's go
to France and live out The last Tango in Paris, without the
fingernail scene, and the gunshot." Yea--She had a body
that was well spectacular.
I don't think anyone could a write a less accurate depiction of John Kenneth Galbraith's writings if one were trying. He did not argue against competition. He argued that modern industries tended to anticompetitive behaviors and that they could not be trusted to preserve free, competitive markets. He was right. Proof is in the behavior of the auto dealers.
I understand Galbraith is a Libertarian boogeyman and Adam Smith is viewed as the opposite, but they share a heck of a lot in common. It's sad to see such easily refuted ignorance elevated to the top of HN comments threads.
"You can't discriminate based on race - that limits choice but who would support the contrary?"
If someone refuses to serve or otherwise interact with me on account of my race, I would not use the threat of deadly force to change his behavior, nor would I advocate that anyone else do that on my behalf.
That is not to say that I approve of racial discrimination, or that I would do absolutely nothing about it. I am only stating what I would not do about it.
Sometimes it is necessary to protect important principles in society. You can't discriminate based on race - that limits choice but who would support the contrary? You can't defraud people in selling products - ditto. You can't buy land to build a smokestack plant in a quiet residential neighborhood - ditto. Many other examples might be cited. In all such cases, the law intervenes to limit private choices. And there are few who would not applaud most such limits. Private choice is not the end all and be all of a society.
Yet, in a free society, private choice should be the overwhelming norm and it should require surmounting very large barriers before legal meddling can limit the choices people can make to serve their own best interests.
Unfortunately, in old-line industries, this idea got flipped and, for years, private choice succumbed to whatever a combination of big government, big corporations, and big unions dictated to the public. Back in the day, writers such as John Kenneth Galbraith even used to celebrate the idea of a "new industrial state" in which the old private competition would yield to ever increasing concentrations of power among government, industry, and labor, who would in turn find ways to "cooperate" with one another in ushering in a more enlightened form of carving up markets and their benefits than mere freedom and competition might provide.
Well, the bureaucratic edict in New Jersey is a relic of that old thinking, perhaps perversely and cynically applied to buy off lobbyists and influencers but rationalized nonetheless by the old paternalistic thinking that the consumer is ultimately best served by having his betters making his buying choices for him rather than being allowed to make them for himself.
Other than in this cynical sense, there is no possible way in which this outrage can possibly be characterized as "protecting" the consumer.
Perhaps the main contribution made by the tech revolution since the 1970s is that it ushered in an era of huge freedom in how people managed their private lives. The internet in particular has been a huge liberating force and so young people especially have come to take it for granted that they can freely make all sorts of choices without having to feel burdened or restricted by the heavy hand of the law. Of course, exceptions can and do remain because abuses can pop up in all sorts of ways without any legal restraints. But, that said, the overwhelming presumption today is that, yes, I can do pretty much what I feel is best for me unless there is a very good reason why I should be restricted from doing so.
And that means, if I live in New Jersey, I should be able to find a local Tesla outlet in which I can buy my electric car if I want. The thought that some politician or bureaucrat should be able to dictate serious limits on that choice is repugnant to anyone who thinks that way. And, in my view, rightly so.
Unfortunately, where the old political pull persists, the law can be abused to protect old-line market players under some guise or other that is a mere pretext for guarding them from competitors who might offer something better and wind up dislodging them in a free market. Legal regulation is not to be rejected out of hand, of course. Maybe the old-line taxi services ought not to have their business cherry-picked by new market entrants who do things differently. Maybe there ought to be some limits in an urban context on absolute free space-letting if this creates nuisances or the like. The line can sometimes be tricky to draw and can require careful and fair-minded judgments given the interests at stake. But how often do we have situations where nothing of the kind happens and instead the issues are decided, in essence, by who pays off whom and who has what degree of political or bureaucratic pull that can be used to protect systems and structures that are far inferior to what the new competition might offer.
I believe that, in these sorts of cases, the tech impetus will ultimately prevail and push things toward broader and freer areas of choice for consumers. Even with this rear-guard action in New Jersey, Teslas can be bought direct from the manufacturer just a short distance away or via remote ordering. And tech-inspired sales and distribution methods in this and a broad swath of other fields will mean that those seeking to limit consumer choice by protecting local turf through bureaucratic pull will be fighting what will ultimately prove to be a losing battle. As consumers, we are not bottled up anymore. If we don't like something that is really stupid, we can more and more work around it using other solutions.
And so we can, I think, basically see that what the local commission is trying to do in New Jersey is much more a last gasp for the old ways as opposed to being a harbinger that will limit Tesla (or any similar new-wave competitor) from accomplishing its goals. Tesla is right to oppose and fight it (and presents a compelling argument for its view). But the action stands out as so bizarre precisely because it is so out of step with the tech impetus that rules our day. It will stand legally (courts are loathe to intervene in such matters). But the longer-term political winds are against it, in my view, and it will prove a temporary obstacle at most as the modern tech impetus advances.