The Counter-productivity of Subsidies.

In one of our previous incarnations as the Progress Party, one of our office bearers circulated a document referring to it as ‘compulsory reading.’ While most of us understood what he meant, most of us felt obliged to send him letters pointing out the contradiction. Yep it was letters back in those days, “snail mail,” you youngsters don’t know how good you’ve got it.

If I hadn’t remembered this story, I would make this video compulsory viewing. This is one of the best demonstrations of the disastrous results of state interventionism, and a lesson in the law of unintended consequences.

I came from a family farm, and on moving away I gained an insight into the blinkered thinking that persists in relation to this area. It occurred to me fairly soon that where most other industries referred to themselves as businesses, family farms tended not to, rather regarding it as a tradition.

 The family farm is not a sacred cow and should not be treated like one. There is no entitlement to survive uneconomically.

 What really comes out in this video is the fact that most of the ‘family farm’ subsidies, really go to larger enterprises anyway, and most production is done without them.

To assume that you are entitled to a living regardless of economic viability is to assume that you are somehow superior to the rest of society, and have a right to call on them to give to you. Those who feel a right to demand a share of other people’s income to support themselves, are assuming a right of ownership over those people.

 This is immoral.

9 thoughts on “The Counter-productivity of Subsidies.

  1. This is simply brilliant.

    John Stossel is excellent. He really researches his stuff so well.

    As for NZ – I knew the results were good, but not that good. That truly is remarkable. It is completely understandable when subsidies can comprise policies such as making resources idle, and diverting capital away from being applied to land in use.

    More importantly perhaps than the moral side – subsidies are less than useless. We are simply better off without them.

  2. Refreshing.

    One of the reasons given by the US government for not reducing farm subsidies is that they are even higher in the EU. Although things are starting to change there as a result of the new countries that have joined, it’s actually true.

    New Zealand is not the only country to have abolished agricultural subsidies though – so has Australia. We still distort markets through managed exports (eg rice and sugar), our quarantine barriers are highly protective and we provide drought relief a bit too willingly, but the overall cost to taxpayers is pretty minor. NZ still has a few little ticklers like that as well.

  3. “you don’t wanna push us.” – what a sad comment by the politician at the end. These people are truly clueless.

    Thanks Jim for posting the video; we need more a lot more journos like Stossel.

  4. I suspect that the pollies involved would feel that they were the victims of selective editing. Perhaps the length and the pace of the story necessitated such editing but they do come off looking remarkably stupid. The bit about people starving if not for subsidies was simply stunning in it’s audacity.

    He could have got an economic opinion saying much the same thing from some place other than CATO. Those that think CATO is reliable on such issues are usually already part of the choir.

    All up a good piece saying what most of us here already know.

  5. Good points Terje, but as for the ‘looking stupid’ part, this sort of stuff is what you will hear from any National supporter and most interventionists with regard to their sacred cows. The attitude is out there.

    I just checked out part 6, which brings out the ‘government should get out of the way’ idea with the guys from Cato and George Mason, a shorter piece but damn good. If only we could get others to watch them.

    When I get the time I’ll check out the whole thing.

  6. The bit about people starving if not for subsidies was simply stunning in it’s audacity.

    Allow yourself to be stunned, Terje. There are plenty of people in Australia, politicians included, who will tell you with a straight face that unless they get more government assistance then people in the cities will starve.

    This in a country that exports around 80% of the food it produces.

    As Jim says, the attitude is out there.

  7. OMG! What a crack-up that series is. It would be nice if someone here was so inspired. I guess the Hollowmen comes closest.

  8. DavidL – it was audacious because when pressed he admitted that farmers would get some other job if subsidies were cut and hence wouldn’t really starve. However he then carried on about how they would starve if they didn’t get another job. Which was both irrelevant (given the admission that the farmer would get another job) and ludicrous (given that unemployment does not equal starvation in the USA anyway).

    However I do take your point.

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