Give subsidies to consumers rather than producers

Subsidies should be given to consumers rather than producers.

There are four reasons for making this statement relating to decision making, economic efficiency , conflicts between jobs and environment and fairness.

Money carries with it the power to make decisions. Giving subsidies to consumers rather than producers would be a transfer of decisions making power to individuals. Then customers rather than government would decide which automakers and other businesses would survive.

Subsidies to producers allows them to sell at cheaper prices than they would otherwise. This distorts the price signals to customers who no longer purchase those products produced most efficiently.

The third reason for giving subsidies to consumers rather than producers is that it would be easier to deal with conflicts between jobs and environmental concerns. Change is usually difficult and often traumatic when it means the loss of jobs. A guaranteed annual income or a negative income tax would make life a little easier for people whose jobs are threatened by environmental problems.

A final reason for a scheme giving subsidies to consumers rather than producers is that, so long as it were universal, it would be a lot fairer to those people who don't belong to a union or the wrong union.

We may be faced with massive and difficult changes in our economy. Governments are trying to cope with this by injecting large sums of money into the economy. It would probably be a lot easier for everyone if these subsidies were given to consumers rather than producers.