Compared to many states, Texas has relatively healthy economic policies. Taxes are fairly low, labor is at-will and thus mostly compensated at market rates rather than at union or government-mandated levels.
It’s less complicated to start a new business or build a new building here than in many states, and thus it’s easier to create new jobs. And while Texas is blessed with an abundance of natural resources, we’ve also diversified our economy over the last several decades so as to be reasonably insulated from swings in oil and gas prices.
But while Texans, or at least conservative Texans, like to think of Texas as a state that exemplifies a free-market, limited government philosophy, I have bad news for you.
There are several areas where elected Texas Republicans have confused being pro-market with being pro-business, and so they’ve enacted policies designed to protect incumbent businesses or traditional business models from disruptive competition that would not only be better for consumers but that also would encourage higher economic growth and job creation in our state.
When you say you believe in free-markets, what that means is you believe in robust competition—new in-state competitors, competition from out-of-state, new disruptive technologies, and experimentation with new business models.
But when you enact policies designed to protect powerful business interests, you’re being protectionist, not free-market.
Texas’ tedious and unnecessary laws governing the sale and distribution of liquor are one area in which your elected Republican legislators repeatedly leave in place outdated regulations that protect a small number of private, family-owned liquor chains from competition from big box stores.
A particularly galling example was a new measure passed by Republicans in 2019. It barred companies from outside of Texas from bidding on new electrical transmission projects. My fellow Republicans, who claim to believe in free markets, overwhelmingly passed legislation to protect a tiny number of huge transmission companies in Texas from new competition from out-of-state.
With fewer companies competitively bidding on transmission projects, that simply means those projects will cost more, and when you have a tiny number of companies legally allowed to bid, that introduces the possibility of collusion. This is bad for Texas taxpayers but good for the utilities the legislators chose to protect. In other words, legislators made a choice that was pro-business, but certainly not pro-market.
Perhaps the most immediate and compelling example, however, is how Republicans in Texas use the power of law to force Texas consumers to buy vehicles through the traditional auto dealer model. Residents of 31 other states can buy vehicles directly from manufacturers such as Tesla and Rivian, but not Texans.
For elected Texas Republicans, protecting auto dealers from a low level of disruptive competition is more important than living up to their stated free-market principles and allowing Texas consumers the liberty to take advantage of new business models. They’re happy to recruit Elon Musk’s company away from California, even while still making it difficult to buy the very cars built here.
It may be that some Texas Republicans think that to support fossil fuels they must necessarily be opposed to electric vehicles, but that is ludicrous. The electricity that charges electric vehicles doesn’t come from nowhere—it’s generated by our natural gas plants here in Texas.
In all of these cases, Republican Texas legislators have chosen the campaign dollars of big-money contributors over fidelity to their stated free-market principles. They’ve chosen favoring businesses over consumers.
There should be more to being a conservative legislator in Texas than just more guns and fewer abortions. We can open up our state to even more economic growth, job creation, consumer choice and overall economic liberty. But it will require elected Republicans to live up to the rhetoric in their campaign mailers and enact policies that actually expand markets rather than protect well-connected business interests.