How do Bastiat's ideas apply to subsidies?
Subsidies, in my view, are a form of legalized plunder, not unlike protectionist tariffs. They are presented as beneficial, often to a specific industry, but they represent a diversion of resources from more productive uses. The money for subsidies must come from taxpayers, who are thus deprived of the use of that capital for their own needs and investments. This intervention distorts market signals, misallocates labor and capital, and ultimately reduces overall societal wealth. The unseen cost to the broader economy is far greater than the visible benefit to the subsidized group.
Ask Frédéric Bastiat the follow-up →