Subsidizing Profits
Altamirano
1
Victor J. Altamirano
Professor Powers
Business and its Publics
25 February 2012
Subsidizing Profits
In contemporary United States policy, the conception of free market principles result in negative externalities for the public as well as market inefficiencies. To address these issues, the government has developed methods to sway commercial enterprise and its services through taxes and subsidies. Taxes are used to discourage certain transactions and production operations while subsidies are used to help promote and uplift certain businesses or industries for the public good. However, since these ideals have formed over the last century, there has been a drastic increase in both government and corporate powers. While the government exists to promote the public welfare, its implementation of these tools for commercial coercion has become a catalyst for serving private interests rather than public interests. One of the most outdated and destructive policy paradigms include the implementation of corn subsidies; a mechanism initially used to support struggling farmers but which now exists for corporate profit maximization.
To recognize how corn subsidies has shifted from serving the public interest to private interest requires the understanding of the purpose of government intervention versus its implementation. Milton Friedman, a strong advocate for a free market system describes the responsibility of the corporation as maximizing profits to serve its shareholders. Given this ideal, Theodore Roosevelt’s ideas of government intervention represent a counter to the negative externalities involved with corporate profit
Altamirano
2
maximization as he recognized their sole purpose was to serve the welfare of their shareholders, not the public. Following the Great Depression, Roosevelt’s philosophy was utilized to help restore America’s damaged economy to habitual levels through an era of policies under what is known as
1
Victor J. Altamirano
Professor Powers
Business and its Publics
25 February 2012
Subsidizing Profits
In contemporary United States policy, the conception of free market principles result in negative externalities for the public as well as market inefficiencies. To address these issues, the government has developed methods to sway commercial enterprise and its services through taxes and subsidies. Taxes are used to discourage certain transactions and production operations while subsidies are used to help promote and uplift certain businesses or industries for the public good. However, since these ideals have formed over the last century, there has been a drastic increase in both government and corporate powers. While the government exists to promote the public welfare, its implementation of these tools for commercial coercion has become a catalyst for serving private interests rather than public interests. One of the most outdated and destructive policy paradigms include the implementation of corn subsidies; a mechanism initially used to support struggling farmers but which now exists for corporate profit maximization.
To recognize how corn subsidies has shifted from serving the public interest to private interest requires the understanding of the purpose of government intervention versus its implementation. Milton Friedman, a strong advocate for a free market system describes the responsibility of the corporation as maximizing profits to serve its shareholders. Given this ideal, Theodore Roosevelt’s ideas of government intervention represent a counter to the negative externalities involved with corporate profit
Altamirano
2
maximization as he recognized their sole purpose was to serve the welfare of their shareholders, not the public. Following the Great Depression, Roosevelt’s philosophy was utilized to help restore America’s damaged economy to habitual levels through an era of policies under what is known as