Protecting the Middlemen

The Internet has revolutionized how we shop. We are no longer limited to the brick and mortar store down the street–we can literally purchase products from companies almost anywhere in the world. But some businesses do not like the choices that the Internet has given consumers. Auto dealerships are one example.

For the third time, the Texas legislature has failed to pass a bill that would allow automobile manufacturers to sell directly to consumers. Current law forces consumers to buy only from dealerships.

It wasn’t consumers who demanded such restrictions–it was the dealerships. And the dealerships continue to defend their government protected monopolies with campaign donations and heavy lobbying. The Chronicle reports that prior to the 2013 legislative session, dealership interests spent $2.5 million on campaign contributions and $780,000 on lobbying.

This isn’t the first time that legislators have protected the middlemen. Just last month, they forced craft brewers to sell their beer to distributors and then buy it back from the middlemen before brewers could sell to consumers. And to encourage that little piece of cronyism, the beer distributors have donated to campaigns and lobbied legislators. As an example, Texans for Public Justice reports that from 2009 to 2012, alcohol interests donated almost $9 million to political campaigns. Nearly $7 million came from beer distributors.

Texas legislators claim to support the free market. But a free market is one in which individuals (and businesses) can produce, trade, and purchase the products of their choosing without government restrictions or controls. Protecting the middlemen doesn’t promote the free market; it promotes cronyism.

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