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Ten reasons why ...
Export subsidies are a waste of money
By Adrian Pepper
- Countries create wealth by producing and selling goods at a profit. Countries become poor by subsidising the production and sale of goods at a loss.
- When governments subsidise inefficient local businesses, it means they want people in other countries to pay for goods they don’t want.
- Subsidising uncompetitive companies wastes taxpayers money and postpones the day when they have to go out of business.
- People should be rewarded for making goods that customers want – not what governments want.
- Export subsidies allow overseas customers to benefit from lower prices by taking money away from the exporting country’s taxpayers.
- Export subsidies are an attempt to get rich by giving things away, but no-one gets rich by giving things away.
- Export subsidies take money away from taxpayers and give it to the exporting company and its customers.
- Government Ministers who subsidise an industry may gain political or financial advantage for themselves but they do not gain economic advantage for their country.
- When businesses are set free to produce and compete, people make and sell goods that customers want, and create wealth in the process.
- In countries where export targets are set, meeting the targets can become a higher priority than making profits.
Adrian Pepper is the editor of this series and Executive Director of the GBRI.
If you have any comments or would like to submit your own list, please email him at: adrian@gbri.org
Click here for previous articles in this series.
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