by Brooke Medina
Vice President of Communications, John Locke Foundation
There’s no doubt, freedom and economic growth is tied to free trade. The less countries and communities are hindered by burdensome and unnecessarily regulations, the more wealth that can be generated. That’s the focus of Locke’s VP Brooke Medina’s latest op-ed with Free Trade Europa CEO Glen Hodgson for Real Clear Policy.
Here’s an excerpt:
There is never a right way to do a wrong thing, and this is particularly true when it comes to governments picking business winners and losers, drowning politically favored companies in taxpayers’ money and claiming they are turbo-charging progress. The US’ Inflation Reduction Act (IRA) – doling out $369 billion to subsidize electric vehicles, turbines, and battery projects – and the EU Recovery and Resilience Facility (RRF) – an instrument for providing grants and loans to support reforms and investments in the EU Member States totaling over €700 billion – are the latest examples of this self-destructive tendency.
Both the European and American political appetite for dirigiste industrial policies is rooted in a wrong-headed desire to beat China at its own self-destructive game, buying into the notion that the government has reliable foresight in which technologies and materials to invest in. History has shown that state aid invariably becomes a vehicle to support uncompetitive companies and pour money into politically favored initiatives, rather than support innovation and cutting-edge technologies. Do America and Europe really want to let China shape their economic strategies?
Excessive interventionism is bad for business, consumers, and the economy, as it gives bureaucrats the authority to redirect resources to projects and businesses based on political considerations, rather than economic ones. This creates a lack of competition, which often leads to higher prices, fewer choices, and poorer product quality.
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