Why Chicago is So Much Bigger than St. Louis

My hometown of St. Louis, Missouri was the largest city west of the Mississippi River in 1850, and the second largest port city in the entire country. Only New York handled more tonnage than the riverboats that docked, often more than a hundred at a time, at the St. Louis levee. Among other things, the riverboats supplied equipment, people, horses, and other materials to a burgeoning population of pioneers who rode wagon trains out from St. Louis, pushing westward.

About this time, a variety of railroads began trying to build their own networks to the West, but the St. Louis city government refused to grant the permits required for constructing railroad bridges across the river at their location, even though St. Louis was the logical choice and would have been a perfect place for a rail hub. Apparently, the politicians in St. Louis felt their duty was to protect the riverboat industry, at that time their life and blood, from any and all competition.

So the railroads turned to Chicago, building immense rail facilities and attracting the businesses that drove Chicago to become one of the fastest growing cities in the entire world throughout the rest of the 1800’s. Today Chicago is the third largest city in the US, almost ten times as big as St. Louis, which still calls itself (ironically) “the Gateway to the West.” St. Louis was indeed a gateway once, but of course in its effort to prolong and protect the status quo, it turned itself into the "Roadblock to the West," instead.

The Tesla is, by all accounts, a well-designed, environmentally friendly electric car, with burgeoning consumer appeal. Elon Musk's company is trying to crack the mass market of upper-middle-income drivers in the US by offering a sophisticated style and a modern, high-tech user interface to supplement its extremely innovative all-electric power train. And if you haven’t yet ridden in a Tesla yourself, it’s impossible for me to convey the thrill of it in writing. (While I don’t personally own a Tesla, I do hanker for one!)

Unfortunately, like St. Louis’s city fathers protecting the special interests of riverboat operators, a number of state legislatures are now trying to protect the special interests of car dealerships by requiring all cars to be sold through dealerships, rather than direct to consumers by the manufacturer, as Tesla does. There is no genuinely compelling reason why car manufacturers shouldn’t be allowed to sell directly to consumers. The only possible rationale for these kinds of restrictions is raw political favoritism.

Protecting a favorite industry is something all politicians do. They pass restrictive laws, they refuse to grant permits, and sometimes they just use the legal process to increase costs and slow things down, all in order to ensure that their favored interests “have the law on their side.” But progress is inexorable and always succeeds in the end, with or without politicians’ approval. When artificial barriers obstruct economic and technological progress, the barriers are eventually overwhelmed or circumvented. The railroads found a way around St. Louis's roadblock by going through Chicago, in much the same way a tree root will eventually find its way around even a massive boulder.

But political favoritism is still a hindrance. It makes all of us a little bit poorer in order to make a few wealthier (or, more commonly, to protect the wealth that a few already have). And fortunately for all of us citizen consumers, the interactive technologies available today allow us to participate more directly in this political process ourselves. We can more directly express our own interest in having the right to buy the products we choose in the way that we choose.

Thanks partly to the efforts of LinkedIn Influencers like Richard Branson, Steve Blank, and others, earlier today a White House petition requesting that Tesla be allowed to sell its cars directly to consumers in all 50 states accumulated more than the required 100,000 online signatures (the deadline was this Friday, July 5). Now let's all hope that the federal government’s efforts will prevent individual state legislatures from restricting our freedom for no higher purpose other than favoring the special interests of a few.

As a country, we can learn a lot from St. Louis’s historic mistake.