Corporate welfare

{{Economics}}{{cquote|Socialism for the rich and capitalism for the poor.|||{{wpl|Charles Abrams}}<ref>''The Other America: Poverty in the United States'' by Michael Harrington (1968) Penguin.</ref>{{rp|60}}}}

'''Corporate welfare''' is a phrase usually used as a criticism of [[government]] interference in the [[free market]] to the direct or indirect financial benefit of a particular [[corporation]], a group of businesses or business persons, or an industry in general. The most blatant examples and the ones most likely to raise the ire of [[libertarians]] are economic development incentives, such as a state waiving taxes for a certain number of years in exchange for a corporation relocating to or constructing a factory in that state, which may also be considered protectionist in some cases.<ref>http://www.cato.org/publications/congressional-testimony/corporate-welfare-spending-vs-entrepreneurial-economy</ref> Other, grayer areas of “corporate welfare” include import tariffs, no-bid government contracts, publicly funded infrastructure (including some, but not all, projects considered [[pork]]), and facilities that mostly benefit select companies or individuals, such as taxpayer-funded sports stadiums. In addition, there’s the type of government subsidies to low wage employees that arguably allows companies to skimp on wages; one notorious US example being the numerous cases of [[Walmart]] workers earning so little that they also qualify for [[welfare]] programmes, such as foodstamps, Medicaid, subsidised housing etc. One 2014 report calculated these welfare costs associated with low wage Walmart’s workers as amounting to $6.2 billion annually.<ref>O’Connor, Claire, [https://www.forbes.com/sites/clareoconnor/2014/04/15/report-walmart-workers-cost-taxpayers-6-2-billion-in-public-assistance/#172ebfd9720b Report: Walmart Workers Cost Taxpayers $6.2 Billion In Public Assistance], ''[[Forbes]]'', April 15th, 2014</ref><ref group=note>This is similar to some of the criticism about the potential effects of various [[basic income]] schemes.</ref> At the same time, Walmart boasted in its 2013 annual report that it had paid out an average of $12 billion annually since 2009 to its shareholders through dividends and stock buybacks.<ref>Walmart, [https://s2.q4cdn.com/056532643/files/doc_financials/2013/Annual/2013-annual-report-for-walmart-stores-inc_130221024708579502.pdf 2013 Annual Report], p. 2</ref>

Sometimes these efforts at economic development work out well and create jobs and an expanding local economy; sometimes corporations or people take the money and run.<ref>[http://www.huffingtonpost.com/entry/rams-los-angeles-st-louis-taxpayers_5696955ee4b0778f46f7c330?utm_hp_ref=sports&ir=Sports&section=sports St. Louis Taxpayers Aren't Finished Paying For The Stadium The Rams Abandoned].</ref> When things don't work out so well, taxpayers are left holding the bag; thus, a portion of the corporation's risk is assumed by the government. Such an act is usually referred to as "privatising profits and socializing losses."<ref>http://www.investopedia.com/terms/p/privatizing-profits-and-socializing-losses.asp</ref>

Similarly, [[Ronald Reagan#A sterling record of fiscal conservatism|government]] [[Banking crisis|bailouts]] of bad corporate debt would be considered by some to be corporate welfare.<ref>http://www.cato.org/publications/congressional-testimony/corporate-welfare-spending-vs-entrepreneurial-economy</ref>

Though many environmentalists may agree with libertarians on the problem of corporate welfare, it's likely for different reasons. [[Naomi Klein]] in ''This Changes Everything'' cites<ref>P. 70</ref> a 2012 report by Elizabeth Bast, et al, that estimates worldwide [[fossil fuel]] subsidies to be at least US$775 billion annually.<ref>https://www.boell.de/en/ecology/climate-energy-policy-paper-fossil-fuel-subsidies-14818.html</ref> Oil Change International estimates U.S. fossil fuel subsidies to be $37.5 billion annually, as of 2014, including $21 billion in production and exploration subsidies.<ref>http://priceofoil.org/fossil-fuel-subsidies/</ref> And environmentalists usually take the concept further, to include negative [[externalities]] for which corporations might not be held to account, such as health impacts of [[pollution]].<ref>Ibid.</ref> A modern example is the [[TARP|bailout]] of banks after the [[Great Recession|2008 financial crisis]].

Some even consider [[US]] [[gunboat diplomacy|naval domination]] of international waters and global power projection to be corporate welfare, which may have some basis in truth and be a valid criticism of the US's disproportionate military spending, but begins to look like a rabbit hole that never ends, as far as calling this “corporate welfare”.<ref>See for example {{wpl|War is a Racket}} by Smedley D. Butler</ref> After all, a similar argument could be made regarding taxpayer-funded [[police]] arresting shoplifters.

===Other possible candidates===
*Farm and [[ethanol]] subsidies
*Government R&D

==See also==
*[[Enron]]
*[[Paul Krugman]]
*[[Lobbying]]
*[[Military-industrial complex]]
*[[Welfare state]]

==Notes==
{{reflist|group=note}}

==References==
{{reflist}}
[[Category:Economics]]
[[Category:Political terms]]

Categories: Economics, Political terms