By James T. Bennett
From the time of Alexander Hamilton's "Report on Manufactures" through the Great Depression, American towns and cities sought to lure footloose companies by offering lavish benefits. These ranged from taxpayer-financed factories, to tax exemptions, to outright gifts of money. This kind of government aid, known as "corporate welfare," is still around today. After establishing its historical foundations, James T. Bennett reveals four modern manifestations.
His first case is the epochal debate over government subsidy of a supersonic transport aircraft. The second case has its origins in Southern factory relocation programs of the 1930s—the practice of state and local governments granting companies taxpayer financed incentives. The third is the taking of private property for the enrichment of business interests. The fourth—export subsidies—has its genesis in the New Deal but matured with the growth of the Export-Import Bank, which subsidizes international business exchanges of America's largest corporate entities.
Bennett examines the prospects for a successful anti-corporate welfare coalition of libertarians, free market conservatives, Greens, and populists. The potential for a coalition is out there, he argues. Whether a canny politician can assemble and maintain it long enough to mount a taxpayer counterattack upon corporate welfare is an intriguing question.
Nick Sorrentino on The Independent Review; A Journal of Political Economy wrote:
"Appropriately enough, given the agreement between small-government advocates and anticorporate warriors on corporate welfare, Ralph Nader provides the foreword. Bennett hopes the left/right agreement can provide the impetus for an eventual end to corporate welfare in all of its guises. [...] Bennett is reluctant to blame companies for playing the subsidy game and focuses his criticism on government’s size and scope. Companies, though, deserve more criticism when they play the game, and not just the welfare queens such as Boeing or GE. Large companies actively pit states against one another to obtain subsidies even when there is no real competition. They justify this in the name of free enterprise and the good of their shareholders, but Peter Drucker has written that 'free enterprise … can be justified only as being good for society.'”
"James T. Bennett’s new book Corporate Welfare: Crony Capitalism That Enriches the Rich examines American corporatism from the early days of the republic to recent battles surrounding the renewal of the Export-Import Bank of the United States. Long have special interests sought to manipulate government for financial gain in the United States, and Bennett chronicles these exploits with wit and humor. [...] Bennett focuses primarily on four areas of cronyism, all from the past century [...] The jewel of the book, which is excellent the entire way through, is the story of the death of Poletown in Detroit. Imagine an entire neighborhood laid waste because General Motors (GM) decided that it wanted to plop a factory down on that part of town. [...] One of the main points Bennett emphasizes throughout the book is that to really put a wrench in the crony gears, libertarian and conservative anticrony types would be wise to cultivate genuine relationships with those on the left who sincerely oppose corporate welfare. [...] Corporate Welfare offers an excellent overview of one of the great and emerging political issues of our time."
About James T. Bennett
James T. Bennett is an Eminent Scholar at George Mason University. He holds the William P. Snavely Chair of Political Economy and Public Policy in the Department of Economics and is Director of the John M. Olin Institute for Employment Practice and Policy. Bennett received his Ph.D. from Case Western Reserve University in 1970 and has specialized in research related to public policy issues, the economics of government and bureaucracy, labor unions, and health charities. He is founder and editor of the Journal of Labor Research and has published more than 60 articles in professional journals such as the American Economic Review, Review of Economics and Statistics, Policy Review, Public Choice, and Cato Journal.
Table of Contents
- Introduction and Overview
- Alexander Hamilton, Canals, and Railroads
- Corporate Welfare Takes Flight: How the SST Was Launched (and Shot Down)
- The Great Giveaway: Economic Development, "Incentives," and the Corporate Welfare Wars
- Corporate Welfare as Theft: How Detroit and General Motors Stole Poletown
- A Reverse Robin Hood: The Derring-Do (on Behalf of Transnational Corporations) of the Export-Import Bank
- Conclusion: Will It Ever End? Or Is There a Future for an Anti-Corporate Welfare Coalition?