The Morality of Government Subsidies
Morality has become increasingly complicated in modern times. Not that long ago you probably would have been 100% aware if you were buying stolen goods. After all, you most likely were on a first name basis with your supplier, and you were probably very aware of his business practices. Then along came big government and interference into the marketplace, which made knowing where the goods you purchased came from a lot more complicated.
Most things you purchase today were probably the product of theft somewhere down the line. “How can that be?” you may ask. Well, let’s start with the most simple example: food.
A farmer hears that the government is subsidizing corn this year because it has the potential to be used as a fuel and thus an alternative to oil. Let’s say you buy your corn directly from the farmer. A transaction involving only two people (no middle men), the grower and the consumer, except there is an X factor in this equation: the government subsidy.
After all, where did the money for the subsidy come from? That’s right. You and me. Now you might be alright with subsidizing farmers to grow corn, but I’m not. I don’t even like corn! Yet, the government took my money and transferred it to the farmer, who then transfered it to you via lower corn prices.
You (and the farmer) have effectively stolen my money. You didn’t mean to steal my money; you just really like fresh corn on the cob, and so you decided to buy some. By now you are probably saying, “That’s not fair! I can’t be held morally responsible.”
And I ask, then who is responsible?
The government? The one that is supposed to be, by the people, of the people, and for the people? It’s your government. You elected the representatives. You sat idly by while they subsidized farmers to grow more corn than the market determined was needed.
But you only had the best of intentions, after all, our dependence on foreign oil funds oppressive dictators and terrorists! We needed a solution and what’s better than a homegrown solution?
Except…it turns out that making ethanol from corn is ineffective, it takes more energy to turn corn into ethanol than the energy gained from the fuel! Not only that, but we have also now burned up a great deal of the world’s food. Places that actually rely our corn so that they can eat are now starving...
Oddly enough the government in all of its infinite wisdom didn’t foresee any of this, but the free market would have foreseen it all. Because no farmer would have been growing extraneous corn without the government paying them to do so, and thus no imbalance in the corn market would have occured. And even if some farmer had been growing corn extra corn, no producer of Ethanol would’ve been dumb enough to waste money burning corn as fuel. And even if some business had been dumb enough the wouldn't last very long, as they would be out of business much more quickly with higher corn prices and ineffective methodology.
Even more absurd is the fact that there is a crop, which could be grown quickly and easily without chemicals, and would supply us with enough fuel to not even need foreign oil. But the government has made growing this plant illegal!
Yes. I’m talking about Hemp. If we were to grow 7% (that’s all) of the world’s Hemp we would no longer be dependant on foreign oil. Do you think that if it were not illegal to grow farmers would need subsidies to grow such a crop? Not a chance.
Farmers would grow what makes them money, just like Wal-Mart sells the products that make them money. You would think it was absurd if the government was subsidizing the sale of the Nintendo (NTDOY.PK) Wii. Yet, the majority of people never question our countries numerous government subsidies. Not to even mention the waste that occurs from lack of oversight of government funds.
So, the next time someone tells you that the unfettered free (redundant I know) market caused the economic recession, you should laugh in their face. Our market is no freer than the Chinese Press. Between congress’ laws (Cap and Trade), taxes (Corporate Income Tax and “Sin” Taxes), regulations (Like those put upon the Auto Industry), and monetary inflation (from The Federal Reserve) inevitably one section of the economy is harmed and another rewarded. My money and your money is stolen and given to someone else, and believe me it ain’t the poor people.
Government subsidies of any kind are not only bad for the economy, they are morally reprehensible.