The fact that U.S. exports didn’t collapse as Ex-Im lost much of its power does not surprise most economists. Economists know that while export subsidies can boost the bottom-line of a few particular firms or industries, these subsidies also have a negative impact of the overall economy, mostly by shifting capital away from nonsubsidized firms or industries to subsidized firms or industries.
For that reason, when you hear anyone say that cutting export subsidies while no other country is cutting theirs is an act of self-destructive unilateral disarmament, your response should be uncontrolled laughter. If other countries decide to cripple their economies by supporting a few of their exporters, don’t emulate them.
A great development over the past half-century has been ordinary Americans’ increased ownership of capital. Perhaps most notably, the typical American today owns – in the form of his or her specialized skills – more human capital than at any time in the past. Similarly, the value of American-workers’ ownership of corporate assets through 401(k) plans has grown impressively. The total value of mutual funds has also generally increased over the past 40 years.
Furthermore, recent advances in “sharing-economy” technology have encouraged even poor Americans to turn their homes and automobiles, formerly used only for consumption purposes, into capital assets that yield income.
Given this democratization of capital ownership, why in the U.S. in recent years have we not witnessed a significant increase in support for capitalism? Indeed, why has there been a slight rise in public support for socialism? Perhaps the answer is as uncomplicated as “economic ignorance”: not only do too many people not understand just how many consumer goods and services are brought to them by capitalism – and not only do they not understand how much cleaner and safer their lives are because of capitalism – they don’t even understand how much capital they themselves, as ordinary Americans, own.