[Question] Regarding government role in funding private entities.
I got into an argument with a friend and would like this subreddit thoughts on the subject matter. Any advice would be greatly appreciated.
There's a private company that is making a widget, but they used taxpayers dollars finance the production of the widget.
I find it offensive that taxpayers dollars are being used to subsidize costs in the private businesses and contributing to profits in the private sector. I asked why doesn't the government just make it themselves.
The response was the government can not make a profit off its citizen, and we're a capitalistic country, not a socialist country.
My response was, so we're just giving the money away and his response was that its ok since we'll get the money back in jobs and taxes.
Is it hypocritical to argue that we're not a socialist country(blah blach capitalist country), but own a company taking government/taxpayer funds to finance your operations(as a private entity in the private sector)?
According to libertarian philosophy, what projects (if any) is the state allowed to finance/invest? Should the state be investing in any projects at all and it would be ok because we get the money back in the form of jobs and taxes?
Posted Feb 22, 2020, 6:23 AM UTC
The problem is saying ‘according to libertarian philosophy’.
You’ll get about a half a dozen different, valid answers to that question.
My position would be:
I don’t mind the idea of governments supporting business if it’s done equally across the board. Unfortunately that’s never really the case and government support is used as a tool for ensuring cohesion, which means some things/businesses will get support and others won’t.
This skews the market and breaks the mechanisms that make free markets work in the first place.
What are your thoughts on government incentives for electric plug-in vehicles? [In 2009, President Barack Obama pledged US$2.4 billion in federal grants to support the development of next-generation electric vehicles and batteries] (https://en.wikipedia.org/wiki/Plug-in_electric_vehicles_in_the_United_States)
I just find it distasteful that taxpayer's money is being used to fund research and development for the profit of private corporations. For example, [Tesla market value is currently over at 100 Billion[(https://www.cnbc.com/2020/01/21/tesla-crosses-100-billion-stock-market-valuation-in-extended-trading.html)
This is an example of what I’m saying.
The state supports the fossil fuel industry in some ways, then the electric car industry in others. It’s inconsistent because it’s dependent on which party/admin are in power, therefore the kind of situation where I’d be ok with the state helping businesses is never going to happen.
Each admin supports industries that fall in line with them ideologically.
Again, in theory I don’t have an issue with governments helping businesses, in practice it never works and undermines market forces, leading to less desirable outcomes.