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A Sour Deal

Here’s a note to the excellent Pepperdine University economist Gary Galles:


Thanks for eloquently and effectively demolishing the claim that the U.S. sugar program, because it gets no federal budget subsidy, “doesn’t cost Americans anything” (“‘Free’ Sugar Protectionism Is Not As Sweet As It Sounds,” Dec. 10). As you explain, the higher prices we Americans are compelled by this program to pay for food stuffs containing sugar (and corn-based sweeteners) is a cost that is made no less real because we Americans pay this cost to protected sugar and corn producers directly, rather than indirectly through government.

But there’s one additional cost of this program that warrants mention – namely, the vast amount of resources used by sugar and corn producers to lobby for this program. All the time and talent of those persons employed to plead for this special privilege are time and talent that could be, but aren’t, instead used productively – to produce goods and services that would enhance our living standard. This time and talent are spent convincing politicians to plunder all Americans in order to unjustly enrich a few. The output forgone because so many scarce resources are spent, not producing, but pleading for special privileges is a huge cost on top of the higher food prices that we must pay.

You, of course, know about these “rent-seeking” costs, as they’re called. I here mention these costs explicitly as a means of further strengthening your excellent argument.

The fact that our ‘leaders’ (so-called) in Washington have the gall to insist that the sugar program is costless is prime evidence of the contempt in which these ‘leaders’ hold the American people. Thanks again for calling them out.

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