Comment by maerF0x0 | Hacker News Reader

Comment by maerF0x0 | Hacker News Reader

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While I agree with the geo-political arguments, I'd prefer to see regulations that allow the freemarket to design a solution, rather than a government contract to choose the winner. (eg: cars with 100% US made chips, or no chips, receive a tax rebate at the final consumer purchase)

I also feel the need to comment that this is corporate welfarism and that is very much contrary to free markets or capitalism. IMO the government should not be choosing winers, but incentivizing everyone who generates a benefit. As an illustration (but not neccesarily the exact policy), what if the government awarded a benefit per TFLOP produced in the USA, or per chip created etc. (up to some maximum). Then a handful of competitors could all participate and benefit from the incentives. As it stands now its $3.1B harder to compete with GlobalFoundaries on the open market, meaning competitors and thus innovation and supply will actually be harmed.

We also see time and again that corporate subsidies are not sufficiently beneficial to constituents to be worth the money.

The best data i can find is on stadiums[1], but also some about when amazon was shopping itself around for incentives.[3]

[1]- https://reason.com/volokh/2023/12/16/virginia-should-refuse-... , https://reason.com/2013/12/21/why-stadium-subsidies-always-w...

[2]: https://subsidytracker.goodjobsfirst.org/parent/tesla-inc is a good resource for seeing how much companies have been subsidized

[3]: https://www.forbes.com/sites/teresaghilarducci/2019/02/27/sh...

> while I agree with the geo-political arguments, I'd prefer to see regulations that allow the freemarket to design a solution, rather than a government contract to choose the winner.

I think the market did choose and the choice was "not in the us".

A free market on capital intensive industries chooses for efficiency, and efficiency means having single large dominant players at each step in the chain. Free markets create monopolies.

Regulations are what prevent monopolies and we've forgotten about enforcement of those rules for decades. So we ended up with concentrated monopolies and single points of failures in these critical industries.

Paltry subsidies and no new regulations means nothing will actually change, other than a few billion dollars going from tax payers into some small number of wealthy people's pockets.

Free markets do not create monopolies. Monopolies require government carve outs that make competition less likely or impossible.

> Free markets create monopolies.

I have never thought this to be the case, could you provide some backing to your claim?

It is described in many places, including in detail here: https://archive.org/details/cu31924096224799

Some other info here https://www.economicshelp.org/blog/21726/concepts/why-does-c...

In actuality though, this is almost religious. It doesn't matter than monopolies have always appeared in markets and been dealt with by regulation; believers in free markets will always argue that the actual cases weren't really monopolies or that they'd not have lasted. /Shrug

You can't free-market your way in an industry that's heavily subsidized by other governments. Whatever local company you have will obviously lose to some other company that's getting the levies somewhere else to design a cheaper product which will win in the "market". So, you end up having two options:

a) Offer subsidies yourself b) Let other governments dictate the industry that you're crucially depended on

> eg: cars with 100% US made chips,

Isn't this about being able to build military aircraft and guided missiles w/o any foreign dependencies, not cars?

>that is very much contrary to free markets or capitalism

Free markets and capitalism are related but not the same. The government using capital as an incentive for companies to increase output is an example of capitalism.

Correct, but I'd claim that there is a "freemarket" ethos in the US, despite the lack of them. People here often say they want freemarkets and hold it as an ethical and idealized system. Their government behaves very much in contradiction to that though.

When exactly?

The bulk of USAs technological progress is Department of Defense investments. Such as ARPANET, computers, supercomputers, pressurized cabins for bombers (converted into passenger jet tech today), NASA projects and more.

USA was only free market in the 1800s. When the 'Robber Barons' turned out to be a bunch of assholes, we regulated away a lot of that bullshit they did.

I'm not sure you can declare everything that ever received government funding as invented by the government. Jets are "just" pressurized cabins? Why ignore the Wright brothers in this story? Aren't jets really "just" fast planes? And ARPANET is "just" telegrams with computers. On that note, computers were not invented by the government, although they recieved a lot of funding from them.

I don't think oversimplifying this issue helps us discuss it seriously.

I agree with your assessment of how the government looks, in actuality, here. The ethos i was describing was my own anecdata of what people claim to value. IE, they give at least lip service (maybe more actual effort as well) to wanting free markets, but their government does not actually do that

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