To subsidize is to give financial support, usually from the government, to a person, firm or industry so that a good or service costs less or is more widely available.
Historical proponents:John Maynard Keynes, Friedrich ListGovernments should important industries to protect jobs and strategic sectors.
Nothing is sent anywhere.
A subsidy can be a direct payment, a tax break, a low-interest loan or a guaranteed price. Governments subsidize things they want more of, such as renewable energy, farming, housing, public transport or research, and things they want to keep affordable, such as food or fuel.
Economists generally agree that subsidies can correct market failures, for example by encouraging activities that benefit other people, but they also warn about costs and distortions. Subsidies can protect inefficient producers, benefit those who need help least, and cause friction in international trade, which is why the World Trade Organization has rules on some kinds.
Influential figures in the 12 axes thinker pool who advocated, analyzed or shaped ideas around this concept.
British economist & civil servant · 1883–1946
A British economist who argued that governments should spend to counter slumps, and who helped design the post-war monetary order at Bretton Woods.
“The General Theory calls for “a somewhat comprehensive socialisation of investment”, while keeping private production and markets.”
German economist · 1789–1846
A German economist who argued that young industries need temporary tariff protection and that nations grow through their productive powers, and who campaigned for a customs union and railways.
“Active state development policy, national railway construction, and manufacturing support.”
Real cases that people point to when they use the word.
Farm subsidies in the European Union and the United States.
Tax credits and guaranteed prices for solar and wind power.
Public transport fares kept low through government funding.
Food and fuel subsidies in many developing countries.
Reasonable people disagree about this. These are the strongest points made on each side.
The test asks about it in a statement. Your answer moves one axis score.
Agreeing that governments should subsidize important industries moves your score toward the Planned side of the Planned vs Laissez-faire axis. Agreeing that subsidies should be abolished moves it toward Laissez-faire.
Which way agreeing pushes the score
Agreeing with a statement about subsidy moves your score toward Planned.
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Three statements gave you a first reading. The full test scores all twelve axes and finds your closest countries and ideologies.