Just read a bit about the massive subsidies the fossil fuels industry receives in the U.S and I was confused. Aren’t these companies one of the most profitable ones in the U.S?
In: Economics
It’s so stupidly rich ***therefore*** it must become so heavily subsidized.
Believe it or not, but just like how pure Communism succumbs to the Coruption of Power, so too does pure Capitalism. Here, some industrialists from over 100yrs ago effectively created a novel kind of infrastructure. That wasn’t the bad part. The bad part was when other businesspersons saw the opportunity to corner a critical part of this infrastructure: *Something’s gotta fuel it!* And this “cornering” is the act of creating an *exclusionary market*, a “proto-monopoly” if you will. Now let’s let this closed-market stew for 40yrs and a war, and then they have enough money to dictate however they *think* the market will go and thus the research expenditures, starving out competing fuel sources because there wasn’t enough capital allocated to allow for the next step (believe it or not, but this kind of thing happened also as far back as the Roman Empire)!
Now that we know how to create an infrastructure monopoly, we can now appreciate the damage it has done. There’s a weird, not well understood because it hasn’t been well-researched *phenomenon* that happens in a heavily Capitalistic socialist system: The legislators are compelled to set rules for what defines a “monopoly”, and adept businessmen work as hard as they can to make it look like they’re just above the line. What I mean is, the reason why “The Big Three” in auto exist isn’t because there was only three: it’s because two automotive manufacturers is how a monopoly was defined for that industry! Sure, there are smaller independent ones now, but earlier there wasn’t. Turning to petroleum producers, this is also how Haliburton wound up owning practically *ALL* of it.
Unfortunately, *when* a monopoly (proto- or otherwise) starts, its collapse means that a significant portion of the workforce will become unemployed. No money *flows* through them, so the economy stagnates, yada yada yada. While all of that is true, at this point they have the funds to start lobbying and engaging your politicians. “Oh, we need to bail this out, otherwise I’m gonna have to lay off 400,000 employees.” “Aww, you want me to make these changes to protect the environment, but that’ll cut into my profit margins, devalue our stock, and take a whole lot of cash from retirees investment accounts. You can’t let that happen, can you?” So they use these tactics to *win* the subsidies while we pray that it trickles down.
Admittedly, I AM an entrepreneur. I want to build something useful to everyone that it becomes part of their daily lives, part of their *personal infrastructure*. Not because I want to make a shitload of money and do all of the things I mentioned. Because I think I can *shift* the market in a way that helps everyone with what I build (I’m being purposefully ambiguous; DM me if you want to learn more). ***Venture Capitalists know that creating near-monopolies is a game theoretic optimal strategy and want entrepreneurs to have this desire as well.*** And, sadly, ones like myself who don’t share that desire are shuffled off. Every day I read a new business news article talking about a subsidy going to any business with a single employee (C-suite included) who earns more than $250k/yr makes me sick.
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