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Source link: http://archive.mises.org/9787/stimulating-anachronism-stifling-innovation/

Stimulating Anachronism, Stifling Innovation

April 14, 2009 by

The first-generation Tesla Roadsters are shockingly expensive, carrying a sticker price of $100,000, but we should expect this price to fall as the technology and production methods improve. Unfortunately, this progress won’t proceed as rapidly as it otherwise would because the government is tying up capital trying to prop up the gigantic and inefficient “Big Three” car companies. These resources are being wasted. FULL ARTICLE

{ 7 comments }

Gil April 14, 2009 at 9:18 am

Interestingly, you can ‘drive’ the Tesla Roadster in Project Gotham Racing 4 (XBox 360).

Barry Loberfeld April 14, 2009 at 9:32 am

From “Modern Liberalism at Wit’s End”:

So, what’s all this about the primacy of the “market”? Elsewhere in the book [The Big Con, 2007] (p. 48), Chait informs us that the economic policy of current conservatism is “nothing that a Friedrich Hayek or a Milton Friedman would recognize as his own.” And in a discussion of this conservatism’s “material self-interest” (pp. 76-79) — which is actually a listing of a few examples of corporate welfare under Bush 43 — he asks, “How, one might wonder, could anybody regard this great mass of government subsidies as a triumph of the free market?” Rhetorician, answer thyself.

The best we get is this: “The rise of the business lobby has distorted — and, finally, corrupted — the Republican Party…,” which is true — if we were talking about the Progressive Era. But regarding that period Chait rehearses a superstition that puts the flat-Earth faithful to shame: “[M]any of the reforms the Progressives set in place were met by fierce opposition from corporations. Yet eventually much of the business community accepted them … [including] reasonable regulation.” “This history,” he explains, “runs against the mythology … in which American business is seen as a constant, thoroughly evil, and near omnipotent force” (pp. 48-50).

Chait’s “history” has been exposed as mythology itself by the scholarly research of historian Gabriel Kolko, who documented how the Progressive regulatory agencies were “invariably controlled by leaders of the regulated industry, and directed toward ends they deemed acceptable or desirable … [mostly] because the regulatory movements were usually initiated by the dominant businesses to be regulated,” e.g., the Interstate Commerce Commission and the railroad industry. Kolko’s work was embraced by free-market economists from the conventional Friedman to the radical Murray Rothbard, who all stressed the same point: Big Business loves “business regulation” (especially the funded-by-taxpayers and crippling-to-smaller-competitors parts). Chait concedes that by the Johnson administration corporate support for regulation became obvious to all, but he characterizes the regulation as something corporations accepted altruistically because they sincerely believed it benefited the “country as a whole.” Yup, that’s what he writes. Only under George W. Bush has corporatism become the special-interest pursuit of privileges for connected businesses.

Art Carden April 14, 2009 at 10:06 am

My friend and colleague Mike Hammock sends this:

http://www.autoblog.com/2009/04/13/video-elon-99-per-cent-sure-of-doe-loan-calls-nyt-writer-a-hu/

Tesla certainly isn’t exhibiting Randian heroism and I have no vested interest in their success or failure, but I find it interesting that one group (the Big Three) are fighting for government subsidies to keep them from going under while their competitors (Tesla) are fighting for government subsidies to help them compete with the Big Three. No one wins.

Stephen Grossman April 14, 2009 at 12:44 pm

Barry Loberfeld: regulation as something corporations accepted altruistically because they sincerely believed it benefited the “country as a whole.” Yup, that’s what he writes.
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Almost all Americans, including businessmen, think morality means altruism and thus must justify all actions. Altruism is used by politicians to justify interventionism and accepted by voters. The alleged corruption of altruist interventions by business is trivial and misleading. Altruism is impractical except for suffering. Its not a morality for living. When altruism is culturally rejected for selfishness, then we will get capitalism.

Eric April 14, 2009 at 4:29 pm

What all these economists ignore is that losing one’s job is one of the most frightening and depressing events one can endure.

I recall a layoff 31 years ago – it felt about as bad as sitting in the principals office being told I was being expelled for bad language (this was 45 years ago). It was also close to when my dog was killed by a car.

So, fear of layoff is perhaps the biggest fear most Americans face. Given this, is it no wonder that the government feeds on this fear? Until this is taken into account no amount of logic is going to change the crying for government bailouts.

Rothbard argues that values can only be ordered, not cardinalized. But I’d have to say that fear of layoff is likely an order of magnitude more frightening to Americans than is, say, terrorism – thus the saying about it’s the economy stupid. Fear is like pain, one CAN put a cardinal number on that, it’s done in hospitals all the time (please describe your pain on a 1-10 scale). So as long as layoff fear is a 10 with terrorism perhaps a 3, I’d have to say that difference of 7 is going to account for the bailouts.

And, it doesn’t matter that after my layoff my next job was the stepping stone to my final 30 years at the job of my dreams. Try telling this to someone faced with pounding the streets looking for work.

greg April 14, 2009 at 6:41 pm

It is the union that took down Detroit. I would like to see any of the other car manufacturers that you mentioned build cars under the same labor conditions and provide a good car for the market at the same price Detroit does.

If Detroit can get away from the $3000 charge to each car to pay for retirees pensions and their healthcare, that money could go a long way to bringing quality back to the public.

Stephen Grossman April 14, 2009 at 8:16 pm

Barry Loberfeld: regulation as something corporations accepted altruistically because they sincerely believed it benefited the “country as a whole.” Yup, that’s what he writes.
====
Almost all Americans, including businessmen, think morality means altruism and thus must justify all actions. Altruism is used by politicians to justify interventionism and accepted by voters. The alleged corruption of altruist interventions by business is trivial and misleading. Altruism is impractical except for suffering. Its not a morality for living. When altruism is culturally rejected for selfishness, then we will get capitalism.

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