“The Government Is a Hitman: Uber, Tesla, and Airbnb Are in Its Crosshairs”

I’ve got a new column up at Time, all about
ridiculous regulatory attempts to squelch disruptive business
models such as Tesla, Uber, and Airbnb. Here’s the start:

What the Invisible Hand of free-market innovation giveth, the
Dead Hand of politically motivated regulation desperately tries to
taketh away.

That’s the only way to describe what’s happening to three
wildly innovative and popular products: the award-winning electric
car Tesla, taxi-replacement service Uber, and hotel-alternative
Airbnb. These companies are not only revolutionizing their
industries via cutting-edge technology and customer-empowering
distribution, they’re running afoul of interest groups that are
quick to use political muscle to maintain market share and the
status quo….

If mobsters were pulling these sorts of stunts, we’d
recognize the attacks on new ways of doing business for what they
are: protection rackets.

I cite
historian Burton W. Folsom’s distinction between “market
entrepreneurs” and “political entrepreneurs.” The former capture
customers and profits by delivering new and better products and
services. The latter rely on governments and regulators rigging or
freezing markets to their advantage (bonus frustration: market
entrepreneurs routinely transmogrify into political ones after
gaining a big market share). In Folsom’s telling, the 19th-century
steamboat pioneer Robert Fulton exemplifies both categories, first
by improving a technology and gaining a market and then by locking
in a state-granted monopoly for steamboat traffic in New York. In
the end, though, real markets do win out, though:

Folsom’s study of political and market entrepreneurs also
suggests that political entrepreneurs are ultimately unsuccessful.
Indeed, in 1817, Fulton claimed that his monopoly meant that no one
could ferry passengers to New York City from neighboring states. A
young Corneilius Vanderbilt was hired by a Jersey businessman to
challenge Fulton not in a court of law but on the Hudson River,
ferrying passengers from Elizabeth, New Jersey and Gotham.
Vanderbilt cheekily flew a flag from his ship that read, “New Jersey must be free.”
While evading capture, Vanderbilt lowered prices and changed the
business climate.

It turns out that New Jersey must be free again — to sell
Teslas. And New Yorkers should be free to rent out their rooms if
they want to. And Uber to drive you where you want to go. The
Invisible Hand of free markets shouldn’t have to spend so much of
its time slapping away the Dead Hand of political
entrepreneurship.

Read the whole thing.