Latest news

« »

Monday, 9 March 2015

Car dealers, Tesla, and allegations of crony capitalism

Thanks to Public Lawyer's Consumer Law & Policy Blog  I can bring to your attention an interesting article entitled Tesla, Dealer Franchise Laws, and the Politics of Crony Capitalism by law professor Daniel Crane. Here's the abstract, to save you following the link back to CL&P:
Tesla Motors is fighting the car dealers' lobby, aided and abetted by the legacy Detroit manufacturers, on a state by state basis for the right to distribute its innovative electrical automobiles directly to consumers. The Tesla wars showcase the important relationship between product innovation and innovation in distribution methods. Incumbent technologies may block competition by new technologies by creating legal barriers to innovative distribution methods necessary to secure market acceptance of the new technologies. While judicial review of such special interest capture is generally weak in the post-Lochner era, the Tesla wars are creating new alliances in the political struggle against crony capitalism that could contribute to a significant re-telling of the conventional public choice story.
I can, I hope, perform a useful service by explaining the significance of Lochner v. New York, 198 U.S. 45, (1905), a case which marked the beginning of what is now called the Lochner era in the Supreme Court, marked by the Court's using its interpretation of substantive due process to strike down laws held to be infringing economic liberty or private contract rights, including state legislation that regulated business. The relevant Wikipedia entry will tell you probably all you need to know, perhaps rather more. The era came to an end with the Court's decision in West Coast Hotel Co. v. Parrish, 300 U.S. 379 (1937), where it upheld minimum wage legislation introduced in Washington State and thereafter took an attitude more favourable to the New Deal than had previously been the case. (It is thought that Roosevelt was about to pack the Supreme Court with new appointments who would take a different view of the constitutionality of his policies, but in the end it was not necessary.)

No comments:

Post a Comment