Corporate welfare is a pejorative term describing a government's bestowal of money grants, tax breaks, or other special favorable treatment on corporations or selected corporations. The term compares corporate subsidies and welfare payments to the poor, and implies that corporations are much less needy of such treatment than the poor. The Canadian New Democratic Party picked up the term as a major theme in its 1972 federal election campaign. Ralph Nader, an American critic of corporate welfare, is often credited with coining the term.
As corrupt subsidies
Subsidies considered excessive, unwarranted, wasteful, unfair, inefficient, or bought by lobbying are often called corporate welfare. The label of corporate welfare is often used to decry projects advertised as benefiting the general welfare that spend a disproportionate amount of funds on large corporations, and often in uncompetitive, or anti-competitive ways. For instance, in the United States, agricultural subsidies are usually portrayed as helping honest, hardworking independent farmers stay afloat. However, the majority of income gained from commodity support programs actually goes to large agribusiness corporations such as Archer Daniels Midland, as they own a considerably larger percentage of production.
According to the Cato Institute, the U.S. federal government spent $92 billion on corporate welfare during fiscal year 2006. Recipients included Boeing, Xerox, IBM, Motorola, Dow Chemical, and General Electric.
Alan Peters and Peter Fisher have estimated that state and local governments provide $40 50 billion annually in economic development incentives, which many critics characterize as corporate welfare.
Some economists consider the recent bank bailouts in the United States to be corporate welfare. U.S. politicians have also contended that zero-interest loans from the Federal Reserve System to financial institutions during the global financial crisis were a hidden, backdoor form of corporate welfare.
- Crony capitalism
- Golden gimmick
- Hidden Welfare State
- Political corruption
- Public choice theory
- Regulatory capture
- Socialism for the rich and capitalism for the poor
- Johnston, David Cay. Free Lunch (The Penguin Group, New York, 2007.)
- Jansson, Bruce S. The $16 trillion mistake: How the U.S. bungled its national priorities from the New Deal to the present (Columbia University Press, 2001)
- Mandell, Nikki. The corporation as family : the gendering of corporate welfare, 1890-1930 (University of North Carolina Press, 2002).
- Glasberg, Davita Silfen. Corporate welfare policy and the welfare state: Bank deregulation and the savings and loan bailout (Aldine de Gruyter, NY, 1997).
- Whitfield, Dexter. Public services or corporate welfare: Rethinking the nation state in the global economy (Pluto Press, Sterling, Va., 2001.)
- Folsom Jr, Burton W. The Myth of the Robber Barons (Young America)
- Rothbard, Murray N. ''Making Economic Sense'', Chapter 51: Making Government-Business Partnerships ISBN 0-945466-18-8 (1995)