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The Sour Fruits of Cronyism

Posted By Don Boudreaux On April 21, 2014 @ 3:51 pm In Crony Capitalism,Other People's Money,Trade | Comments Disabled

Here’s a letter to Food Business News:

You report that the U.S. Department of Commerce is launching an “antidumping investigation” into U.S. sugar imports from Mexico (“D.O.C. initiates sugar dumping case against Mexico [1],” April 21).  The admitted purpose of this investigation is to protect American sugar producers from low-priced foreign sugar.  The deeper goal, of course, is to artificially bloat these producers’ revenues.

So, because Uncle Sam’s sugar-trade policy is really just corporate welfare, why go through the costly and confusing rigmarole of conducting such “investigations” as preludes to raising the punitive taxes imposed on Americans who buy imported sugar?  Why not dispense welfare more directly to sugar producers in the form of cash payments?  Let Uncle Sam annually cut each current U.S. sugar producer a check for the goo-gobs of extra money that he or she now gets as a result of being protected from foreign competition.  At least this way sugar prices in the U.S. would not be artificially distorted, the resources now used to produce sugar inefficiently in the U.S. would made available to produce other outputs efficiently, and the recipients of this corporate welfare would be more easily seen for what they really are: privileged parasites.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030

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[1] D.O.C. initiates sugar dumping case against Mexico: http://www.foodbusinessnews.net/articles/news_home/Regulatory_News/2014/04/DOC_initiates_sugar_dumping_ca.aspx?ID=%7BED1255DD-B8B1-4E76-8969-31F8AE9B9ADB%7D&cck=1

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