3 ms·
First, this is incorrect in general. Others will make the points about tax vs subsidy re: externalities. But the comment also misses one of the main points of
by jhayward 8y ago
First, this is incorrect in general. Others will make the points about tax vs subsidy re: externalities.
But the comment also misses one of the main points of subsidies: they aren't simply to offset some externality, they are used to provide efficiently leveraged market availability to products that are at the beginning of an industrial learning curve which will reduce costs over the longer run.
They let us get the tech out of the local minima that it would otherwise be stuck in to move further out on the learning curve so that long-term savings can be had.