Critics of corporate subsidies argue that it’s outrageous to have taxpayer money feeding into the wealth of corporate entities. Others contend that strategic subsidizing is necessary to vitalize innovation and serve those not served by private interests.
Do subsidies fill an important role in the public interest, or is it time to pull the plug on what some have termed corporate welfare?
On April 6, 2016, Intelligence Squared US took on these and other questions, assembling a panel of superbly qualified debaters to take on the motion, “Eliminate Corporate Subsidies.”
The Debaters
Arguing for the motion were Jack Abramoff, a former lobbyist and author of “Capitol Punishment,” and Zephyr Teachout, an associate law professor at Fordham Law School and author of “Corruption in America.”
Arguing against the motion were Kate Gordon, vice chair of climate and sustainable urbanization at the Paulson Institute, and Michael Lind, co-founder of New America.
The Research
Do corporate subsidies enable corruption and further inequality? The side arguing for the motion noted that 75 percent of all subsidies ended up going to fewer than one thousand companies, and attributed the collapse of the country’s small business economy to the rise in corporate subsidies. Profit-driven monopolists, with their immense lobbying power to influence government officials, were swallowing up the overwhelming share of the money and using it to perpetuate their advantage in an uneven marketplace. Even supposing there were noble enterprises benefiting from corporate subsidies, the panelists argued there was something anti-American about having the government outright decide the winners and losers, as opposed to implementing better rules to facilitate fair competition.
The opposition conceded that there were plenty of bad corporate subsidies but cautioned against tossing out the good ones along with them. If there were even a handful of areas where the public interest could only be served through subsidies, those cases alone would support a vote against the motion. Focusing on the problem of climate change, the panelists argued that the privately owned companies responsible for most energy production, precisely because they were profit-minded, had no incentive to switch from oil, so the government needed to create an incentive through subsidies to kick-start innovations in clean and renewable energies. They further contended that, were the government to regulate fossil fuels in lieu of subsidizing, energy companies would simply move renewable development to competing countries offering subsidies.
Pre-Debate Poll Results
In a poll conducted prior to the debate, 34 percent of respondents voted for the motion, while 15 percent voted against, and 51 percent were undecided.
Post-Debate Poll Results
After the debate, the vote in favor of the motion rose modestly to 36 percent. The vote against, meanwhile, rose 38 percent to finish with a final share of 53 percent, indicating an impressive victory for the team debating against. 11 percent were undecided.
To view the full IQ2US debate and add your own voice to the discussion, visit:
http://intelligencesquaredus.org/debates/past-debates/item/1495-eliminate-corporate-subsidies
