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Artificial Burdens

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What if subsidies were called “artificial burdens”?  Would mercantilists and other trade skeptics continue to fall for the fallacious claim that a government that subsidizes some exporters within its jurisdiction engineers an advantage for its economy or otherwise enriches its people at the expense of the rest of the world?  Doubtful.  Language matters.

Note that, because every dollar’s worth of resources given as a subsidy by a government are diverted from some other uses within the economy under that government’s jurisdiction, every dollar of subsidy given to X is a burden on fellow-citizen Y.  Further, because resources driven by subsidies from Y to X are not directed to X by market forces – that is, because those resources are driven away from where the market would direct them (Y) and toward where government officials instead direct them (X) – the ‘weight’ of the burden of each dollar’s worth of subsidies to those who bear this burden is nearly always heavier than the artificial, subsidy-enabled ease enjoyed by the subsidies’ recipients.

So if we simply start calling subsidies according to where they come from, rather than where they go to, people would be far less likely to mistake the existence of government subsidies artificial burdens as a clever means through which governments enhance their people’s wealth.

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