One thought on “What Happens When the Government Says Cheese”
Certainly, subsidies are unpopular in business and economic literature. (I just glanced through a bunch of it online.) But I wonder if part of the reason for this judgment is what gets labeled a “subsidy.” For example, cities and states often give tax breaks to businesses to lure them to relocate. These places get labeled “pro-business.” How is a tax break not a subsidy? The main difference seems to be that business and economic writers like one of these things and not the other. For example, over at the Mises Institute, an author insists, “Exemptions and loopholes do not forcibly redistribute wealth; taxes and subsidies do, thereby benefiting some producers at the expense of others.” I’d say that exemptions and loopholes absolutely benefit some producers at the expense of others, and the resulting hyperconcentration of wealth is not, on its face, less problematic than a redistribution would be. It becomes an argument about what constitutes justice and social good, which neither side is going to “win” decisively. My point is, you can only start to have that argument once you decide not to define subsidy as “stupid government meddling,” but see the relationship of business, state, and society as more complex and multifaceted than that. (The cheese thing, though, that really was stupid government meddling.) https://mises.org/library/no-tax-breaks-are-not-subsidies
Certainly, subsidies are unpopular in business and economic literature. (I just glanced through a bunch of it online.) But I wonder if part of the reason for this judgment is what gets labeled a “subsidy.” For example, cities and states often give tax breaks to businesses to lure them to relocate. These places get labeled “pro-business.” How is a tax break not a subsidy? The main difference seems to be that business and economic writers like one of these things and not the other. For example, over at the Mises Institute, an author insists, “Exemptions and loopholes do not forcibly redistribute wealth; taxes and subsidies do, thereby benefiting some producers at the expense of others.” I’d say that exemptions and loopholes absolutely benefit some producers at the expense of others, and the resulting hyperconcentration of wealth is not, on its face, less problematic than a redistribution would be. It becomes an argument about what constitutes justice and social good, which neither side is going to “win” decisively. My point is, you can only start to have that argument once you decide not to define subsidy as “stupid government meddling,” but see the relationship of business, state, and society as more complex and multifaceted than that. (The cheese thing, though, that really was stupid government meddling.) https://mises.org/library/no-tax-breaks-are-not-subsidies