The bipartisan bill banning direct auto sales is a misguided and backward idea, the chair of the Durham and Orange County Libertarian Party said today in a letter to the Chapel Hill News

“The threat technological advancements pose to job security has been used as justification for stifling advancements for centuries,” said Jason Melehani. “Imagine all the jobs we could create if we banned electronic printing of books or banned computers from automating manufacturing processes.”

“These obviously are backwards ideas,” he said. “The ban on direct auto sales in SB 327 is backwards as well.”

Full text of the letter

When Milton Friedman visited China and saw thousands of workers digging a canal with shovels instead of tractors and excavators, his guides told him that this approach created more jobs. Famously, Friedman retorted, “Then why not use spoons instead of shovels?”

On Monday, May 13, the North Carolina Senate, in bipartisan fashion, unanimously approved Senate Bill 327 to ban direct auto sales to consumers by companies like Tesla Motors under the premise that it threatened the jobs of thousands who work at auto dealerships. I suspect the North Carolina Auto Dealership Association played a major role in bringing both parties together to pass this protectionist legislation.

The Senate has missed the point entirely. Their vote is stifling innovation and hurting consumers by preventing competition and leading to increased costs. The NC Senate clearly lacks an understanding of opportunity costs. When consumers are forced to pay more for a good, they ultimately can afford less of that good and others too. As Friedman pointed out, jobs are only as beneficial as the value they add to a process or product.

The threat technological advancements pose to job security has been used as justification for stifling advancements for centuries. Imagine all the jobs we could create if we banned electronic printing of books or banned computers from automating manufacturing processes. These obviously are backwards ideas. The ban on direct auto sales in Senate Bill 327 is backwards as well.

Jason Melehani
Chair, Durham and Orange County Libertarian Party