(September 1, 2011 at 2:56 pm)Rhythm Wrote: We subsidize extremely efficient industries as well. Actually, massive amounts of subsidies here in the states go to the largest and most efficient operations (speaking specifically about the Ag Sector). We still import a ton of food of course, not because our competitors are more efficient (they are demonstrably less efficient) but because we have greater purchasing power in countries that lack things like basic human rights or effective labor laws. I don't see how pumping money into the economies (read: personal accounts of tyrants) of these countries is a very good idea.
The only reason why an industry would needs chronic subsidy is the value of what it produces is less than the true cost it incurs, so someone else has to spot it some more money for it to not go backrupt. By definition, an industry that can't survive without subsidies is not efficient in the overall economy, even if it is more efficient compare to the same industry in other countries. So even if American agriculture is more efficient than those of most other countries, it is still not an efficient places to invest available American capital.
You might look into Richardo's law of comparative advantages to see why:
1. Just because you do something better and more efficiently than everyone else, it doesn't mean it is efficient thing for your economy to do it, or invest in it, at the expense of other things you could be doing or investing in.
2. As a result, focusing on doing what is really the efficient for your economy is not a race to the bottom, contrary to the thrill and ignorant claims of the otherwise by those who would have us dissipate our resource by subsidizing all manners of inefficient industries and trades.
