The bogus Tesla backlash: What if the Internet saves the middle class?

Silicon Valley, even super-cool electric car companies like Tesla, is getting a bad rap for upending the economy

Published June 7, 2013 11:45AM (EDT)

Elon Musk, CEO of Tesla Motors        (AP/Mark Lennihan)
Elon Musk, CEO of Tesla Motors (AP/Mark Lennihan)

"Is Tesla a Threat?"

The headline in the American Conservative invites an immediate rebuke. Of course not! In an era of high gas prices and global warming, how could a stylish electric car that is getting rave reviews from just about everyone possibly be conceived of as a threat?

The answer only gradually becomes clear in writer Jonathan Coppage's provocative article. Tesla, it turns out, is really just a stand-in for the entire Silicon Valley change-the-world mythologizing apparatus. Like Amazon, like Google, like Facebook, Tesla's paradigm-busting innovations pose a serious threat to the existing integrity of the social fabric. Want some more anti-Silicon Valley backlash? Here's a hefty dose, courtesy of everyone's favorite electric car.

The immediate context for this intriguing argument is Tesla's ongoing fight, across the United States, with established car dealerships. Tesla wants to sell cars directly from its website, thereby cutting out the middleman.

The middlemen are not amused, and they are leaning on their political connections to squelch the Tesla challenge. In North Carolina, reports Coppage, "the state Senate’s Commerce Committee recently unanimously voted to approve a bill, backed by politically powerful auto dealers, that would prohibit direct sale of automobiles over the Internet." It is also already against the law in nearly every state, for manufacturers to directly sell their own automobiles, online or off.

You don't have to look hard to find press coverage of the fight that is distinctly unsympathetic to the dealerships. They're dinosaurs who have outlived their time, depending on their connections to preserve quasi-local monopolies that keep car prices higher than they should be in a perfectly competitive free market! They're a classic example of unnecessary "friction" in the system. Consumers used to getting what they want, when they want it, with just a couple of clicks, are naturally dumbfounded at the notion that cars are somehow off-limits.

Coppage provides some valuable historical background that complicates this framing. The power of local car dealerships turns out to be rooted in anti-trust struggles against big business dating to the 1920s and '30s. Back then, politicians feared that two or three national car manufacturers would lock up the market and then jack up prices. Independent local dealerships, seen from this perspective, were originally a consumer-friendly innovation that boosted local community control and independence.

It's exactly that kind of local culture that Tesla currently threatens, writes Coppage. The real danger posed is not to the car dealerships, but to "civil society" -- the network of local relationships between citizens and businesses and the market that provides texture, vibrancy and cohesion to a physically embodied community. Tesla's direct-to-consumer relationship eviscerates that local civil society infrastructure. What happens, Coppage wonders, when Silicon Valley's entrepreneurs cut out all the middlemen? Who is left? Just us, our smartphones and a mogul having a $5 million wedding in the redwoods.

Yet the broader forces at work in our economy, which Tesla is only riding, should bear scrutiny. In each particular instance, we as consumers may leap to direct satisfaction while still enjoying the societal framework those brick-and-mortar institutions helped scaffold. But as the economy optimizes and cash flows polarize between consumer and producer, we may find our communities inexplicably hollowing out, even as we hum along in our American-made electric cars.

The American Conservative is echoing a concern we've been hearing at high volume lately with respect to Silicon Valley. Similar points have been raised by Jaron Lanier, who believes the Internet is destroying the middle class, and in George Packer's recent New Yorker story "Change the World." Our frictionless, low-priced, ultra-convenient, sharing-everything digital lifestyle is shredding the "real" ties that bind society together, contributing to greater economic inequality while replacing blood-and-guts human connection with Facebook "likes" and Twitter "retweets."

There is merit to this critique, though it has always seemed to me that the real villain here is unregulated capitalism, rather than Silicon Valley. Is Tesla's threat to North Carolina car dealerships fundamentally different from what Wal-Mart has been doing to locally owned independent stores for decades? Isn't Amazon just continuing a process that Barnes & Noble and Borders started? Globalization has hit the middle class as hard as anything dreamed up on Sand Hill Road in Palo Alto.

What seems to bring Silicon Valley up for special animus are the outsize self-aggrandizing claims made by the Mark Zuckerbergs and Sergey Brins and Elon Musks of the world, when compared to the reality of their corporate impact. Wal-Mart just promises low prices, while Silicon Valley promises to make the world a better place. And yet the world, despite our overwhelming embrace of computers and networks and email and social media, is demonstrably not a better place. In the United States, in the 20 years since the Internet broke through, inequality has widened, our politics have grown ever more dysfunctional, and our most pressing problems have grown more intractable. Facebook Home and Google Glass and Amazon Prime aren't cutting it. Homelessness in Silicon Valley? There isn't an app for that.

But that's exactly what makes bringing Tesla into this argument so interesting, and ultimately revealing. Put aside the question of what the impact of disemboweling car dealerships might mean to local communities. Let's consider a larger question. What if Tesla proves to be the proof-of-concept electric car that actually ushers in an era in which we are no longer dependent on oil to fuel our automotive transportation? What if the Tesla Roadster turns out to be the linchpin in a transition that is as momentous as the shift from horse to horseless carriage?

Weaning the industrialized world off of fossil fuels is a titanic struggle. The infrastructure that supports the gasoline-powered automobile is ubiquitous and deeply entrenched. Replacing it won't be done in a day, or a year, or a decade. Numerous efforts to introduce electric cars have failed to grab more than a tiny foothold in the overall market.

And yet here comes Tesla -- already profitable, executing plans to vastly expand its own nationwide charging network. At its current sky-high retail price, a Tesla Roadster is not an option for the economy-minded driver, but if Tesla proves there is profit to be mined from electric cars, then Tesla becomes the thin end of a transformational wedge. We consume less oil. The planet doesn't heat up so fast. The world actually does get a little better.

Let's play a little game. If we're willing to entertain that Tesla "what if" then why not a few others?

What if it turns out that the Etsy model of commerce -- enabling independent actors to make a decent living by selling their handmade wares directly to consumers -- ends up nurturing an entirely new middle class, populated by artisans embedded in their local communities?

What if the collective intelligence of online recommendation services steers us to the independently owned outlet with deep local ties rather than the chain store big box?

What if the phenomenon of crowdfunding à la Kickstarter, which taps our social media connectedness to steer investment funds to entrepreneurs or artists or worthy causes that Wall Street banks or Silicon Valley philanthropists ignore, continues to grow like crazy?

What if the deployment of social media tools like Facebook and Twitter in regions where traditional media is censored or cowardly -- see Turkey -- emboldens and supports civil society resistance to overreaching authority?

These are all highly speculative hypotheticals. Just voicing them runs perilously close to admitting one has been utterly brainwashed by Silicon Valley hype. It's not at all clear that the potential of the positive what-ifs will compensate for the damage wrought by the negative what-ifs. It is entirely possible that society is getting hollowed out at the same time as our new digitally networked tools are empowering us. We're getting tracked and surveilled and big-data number-crunched every time we make an online recommendation or contribute to a crowdfunded project or organize a protest on Facebook. The civil society we build online may turn out to be as evanescent as the pixels and packets deployed during the construction.

But the current backlash against Silicon Valley that so eagerly pounces on every self-serving, mindlessly libertarian evangelizing, hypocritical declaration that the latest smartphone app is going to disrupt, remake and reinvent the world is forgetting something that the Tesla story should remind us of. There is genuine excitement at the prospect of electric cars making the gasoline engine obsolete. There is genuine excitement embodied in the reality that a hand-held device connects us to the satellites orbiting the planet and all the knowledge ever amassed by humanity, and each other. The Internet did not sweep the world because it was a hype job foisted upon us by a 20-something wunderkind from Harvard. It took over because as soon as we saw it we realized it was something we could not live without. We found it to be incredibly useful.

So why not "hum along in our American-made electric cars"? There's still a chance we might end up going somewhere, even if the ride is bumpy as hell.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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Backlash Editor's Picks Elon Musk Inequality Jaron Lanier Silicon Valley Tesla Tesla Roadster