How and Why Does Government Support Big Business

SOURCE: https://theconservativetreehouse.files.wordpress.com

To show its support for certain businesses the government often grants that business a sum of money. That sum of money, or subsidy, assists the company in its production and makes sure that the price of their service remains low in order for them to economically compete with other businesses.The non profit organization which research subsidies, The Global Subsidies Initiative provides information about subsides, when they are used, and how, which supports my argument that the government uses subsidies to promote businesses that are environmentally damaging for economic and personal reasons that do not outweigh the environmental cost.

Most subsidies are used to support big businesses that benefit economy no matter if they are potentially harmful to the environment. A common way for countries to measure the state of their economy is though calculating their gross domestic product. The government, therefore, supports big businesses by giving them subsides to keep their services in the nation without considering environmental costs. For example, “The environmental consequences of subsidies to extractive industries are closely linked to the activity being subsidized, like fishing and logging.” When the government supports businesses such as fishing and logging it evaluates only the short term consequences such as a rise of the GDP and not the species of fish that were lost or the amount of Oxygen that will not be produced by the cut down trees. Those resources might have a bigger cost on a country and its people than a government can realize in the short term.

Another reason government aids business production through subsidies is to win the voter’s support in a political election. In today’s society to become a leader in politics is hard to achieve without the financial and commercial support of big businesses. Thus, “governments are often motivated to provide subsidies in order to benefit specific groups of people-or, more specifically voters- they rarely like to be seen doing it through such blatant devices as direct income payments.”Big business fund campaigns that draw voters to the candidates supportive of that company. These powerful businesses are ones such as the oil industry, to which the nation currently depends on, but is also environmentally harmed by. Another example of how candidates win votes through the involvement of big business can be seen in the subsidized ethanol industry. Since Iowa is the largest producer of corn a necessity for the ethanol industry, Iowa gets to vote first in the elections. This combined with the subsidies wins candidates much wanteed votes. Again, when the government gives subsidies to environmentally harmful industries it does not consider the future negative impact their services might have on the nation.

FUTURE RESEARCH: In the future I will research what regulations our government imposes and how do they compare of the environmental protection regulations of other countries around the world.