Topic for Week 15 -- The Differences between Political- and Market-Entrepreneurs
Question:Are government subsidies for entrepreneurs always a bad thing?
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In short, yes. Subsidies for starting or operating a competitive business, per se, are always a bad idea compared to the alternatives. The awarding of subsidies create an economic incentive to lobby the government and influence elections. This encourages business to become more involved in political considerations and aligns incentives to be less in terms of increasing the products appeal toward customers, and more towards appeasing the government.