Here’s the latest reader question, along with my reply!Â
Fred asks: Why can’t Elio Motor begin production? Is the Big Three manufactures blocking? Are they afraid of the competition? I would like to buy one.
My reply: Me too!
So why can’t we? It’s got much to do with something called regulatory capture – which is a fancy way of saying the cost of doing business. When Henry Ford designed his Model T, he did not have to design it for the government. He just designed it – and the market decided its merits. 
It was very simple – even crude. By today’s standards, the T would be considered by many people outrageously “unsafe” and other things, too. But it is precisely because Henry Ford was able to just design and build the T without having to spend a fortune on research and development to assure compliance with a litany of regulations that he was able to build his Model T.
Well, once the car companies became huge corporations, they began to see the value of regulations and compliance costs. They could afford them – but start-up rivals could not.
That is Elio’s main obstacle. Complying with all the fatwas and getting federal “certification” for sssssssssssssssssssssaaaaaaaaaaafety and emissions is an arduous and very expensive process that few start-ups can afford. We’re talking millions of dollars.
Elio is also up against a culture that no longer esteems living modestly, within one’s means. People are eager to saddle themselves with massive debt. An $8,000 car they could probably write a check for – or at least, which would only take a year or two to pay off – seems less appealing than a $35,000 car they’ll be making payments on for the next seven years.
I don’t get it, myself.
But then, I’m a kook!
. . .
Got a question about cars, Libertarian politics – or anything else? Click on the “ask Eric” link and send ’em in!
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Any news on Elio?
There website is still active.
It’s too bad the Elio will probably never be made, because, like that 100 mpg VW, it would PERFECT for me! I live alone, and I travel alone almost all the time. The most I normally carry groceries or my cats to the vet. Plus, I live modestly. Yet, thanks to Uncle, I can’t buy what I want!
Actually Henry Ford had to battle a slimy patent lawyer (George B. Selden) who wanted a royalty on every motor vehicle sold in the US. Read about the history of that court battle.
https://www.autonews.com/article/20030616/SUB/306160708/landmark-patent-case-broke-selden-s-lock-on-auto-industry
https://www.automoblog.net/2011/01/14/100-years-ago-fords-fight-that-liberated-the-automobile/
The more things change, the more they stay the same.
Hey Eric,
One of the most successful scams perpetrated by GovCo is the false claim that regulators and corporations are antagonists. Regulatory capture, a protectionist racket perpetrated by big corporations, to limit or prevent new entry into a field, along with rent seeking (think Muskrat), make it nearly impossible for innovative, low cost alternatives to come to market. These insights, and the obvious assertion that government “employees” act, like everyone else, to maximize their own self interest, are the province of Public Choice theory. These obvious, and irrefutable observations lay waste to the absurd notion that Government exists to serve us, rather than itself. Note the loathsome use of “public servant” instead of State worker to describe those who live off the backs of the rest of us and get to boss us around to boot. Pretty good gig.
Former economist, now deranged partisan hack, Paul Krugman, assures us that regulatory capture and rent seeking are very rare, while admitting, in the same post, that he has never really studied public choice theory. Blind faith (as Krugman displays toward State power, as long as it’s wielded by a Democrat) is a marvelous thing; no need for any study because he knows he’s right. He is completely wrong, RC and RS dominate the entire regulatory structure. Don Armento and Tom DiLorenzo are probably the best sources for the factual information. James Buchanan and Gordon Tullock are early pioneers in the field. With the rise of populist anger at the obvious elitist collusion against us, culminating in Trump’s win, something had to be done. So, Nancy Nancy MacLean penned her fictional horror story, “Democracy in Chains”. The main character in her novel, James Buchanan, is an evil, racist genius; working tirelessly behind the scenes to destroy Democracy and replace it with an authoritarian Oligarchy.
The book was savaged by actual economists, many of whom studied under Buchanan, but lauded as brilliant, brave, necessary, etc… by the State worshiping press and leftists everywhere. In truth, it is a dishonest, sloppy extended character assassination of a man who, according to people who know him, is a mild mannered, principled, entirely non-racist, and kind man. It is really quite remarkable as, at one time, there were leftist historians who were really good at exposing the government/corporate alliance that is the foundation of “our” economic system (fascism). Of course, they got the causation backwards, it is government, not corporate America, that is the senior partner. Now, to be a leftist in good standing, one must embrace this soft fascism.
If interested, check out this scathing review by Tom DiLorenzo.
https://mises.org/library/review-democracy-chains-deep-history-radical-rights-stealth-plan-america-nancy-maclean
Cheers,
Jeremy