Libertarianism 101: Corporate Welfare

Editor's Note: This post was originally published in 2007. As such, it does not deal with the current issue of government bailouts for private, or even semi-private, financial institutions. Needless to say, we are opposed to these bailouts.

If we cut the federal budget to my proposed 30% of FY 2006's budget, the granting of subsidies and handouts to private businesses would be a moot point ... there wouldn't be any money available to do so. Of course, this is about as likely to happen as what? ... putting a man on Mars?

As I've said in previous posts, I believe in the free market. I believe the federal government sticks its nose into the economy much more than it should. The growth in federal employee jobs is a growth in bureaucracy, not a growth in the vital economy of the nation. The government's habit, and this is yet another example of Congressmen and Senators buying votes, of subsidizing private business operations is not only expensive, but laughable. Especially, when one considers that for years farmers have been paid NOT to grow things! If farmers can't compete in the free market, then the market will determine how many farmers there should be. With the increased productivity of American farmers, we should be using the surplus as a means of diplomacy. Let the government buy up the surplus and sell it to the United Nations to use in it's drive to end world hunger. This is probably one job I don't mind letting the UN handle ... they certainly can't protect anyone from violence. Then again, let the UN buy the food directly from the farmers. Why should the government take a loss?

And while I may be unduly harsh on farmers, there are other government handouts that deserve scrutiny. Industries, large and small, receive these subsidies: airline, timber, pharmaceutical, major league baseball, dairy, sugar, and the list can go on and on. In addition to these subsidies, the government frequently places minimum prices on things such as gasoline and milk ... which only results in us paying more for an item than we otherwise would.

Many would argue that some of these handouts to business results in benefits to all. Research into new medicines, telecommunications, agriculture, and biotechnology may allow us to live healthier, longer, and more productive lives. Isn't this a valid use of our tax dollars? I would argue that it is ... with one exception. If some drug company, for example, develops a new drug using government funds, then the government should realize the return on their "investment" (is this what Bill Clinton was talking about?). The patent should be registered with the government and anyone who wishes to license it should pay the government the licensing fee, not the business that did the development. And if something is developed using both government and private funds, the government should receive its fair share. And if this drives private industry into accepting less government funds, great! It most likely will not result in less research and development as these firms are after profit and the best way to make money is to have a competitive advantage over your competition. The profit motive will continue to drive innovation and technology.

But what about items that were initially developed solely for government use that are eventually commercialized? Two items come quickly to mind: Hummers and the Global Positioning Satellite (GPS) system. Both of these items were developed by Defense Contractors using government funds. Now that these products have gone commercial, is the government receiving any return on their initial investment? I would doubt it. But this isn't about the government receiving a return, it's about all American's receiving a return on their hard earned money. As a free market advocate, I believe we should all benefit when our tax dollars are, believe it or not, invested in an enterprise that can actually make money!

Having supported NASA for many years as a contractor I believe there is a very easy means for NASA to be self-sustaining (much like the Postal Service is suppose to be) ... Don't retire the Space Shuttle ... reconfigure it to carry passengers and sell tickets! I'm all for government operating more like a private business.

Some corporate welfare links:

• Stop Corporate Welfare!


• Ending Corporate Welfare As We Know It


• Corporate Welfare Information Center