EU Tyranny Awareness Month: Subsidies

In today’s world we are being bombarded with propaganda to “raise awareness” for particular causes, especially diseases such as breast cancer, prostate cancer and diabetes. Sadly, these seemingly noble causes are actually fronts for the pharmaceutical industry to instil people with fear so that more people will subject themselves to mammograms, pharmaceutical drugs and surgery, funneling money into the coffers of Big Pharma while perpetuating the sorry state of our health and healthcare system.

When it comes to the European Union, however, there is a genuine need to educate people on how this bureaucratic behemoth encroaches on our freedoms in all facets of our lives. That is why, throughout December, I will be blogging about how this tyrannical superstate threatens the very freedoms that our parents, grandparents and great-grandparents fought two World Wars to protect.

EU Subsidies
The European Union defines a subsidy as “a financial contribution made by (or on behalf of) a government or public body which confers a benefit to the recipient”. In 2007 €114 billion -approximately 1% of the members’ gross national income – was set aside for subsidies of all kinds, including foreign aid. France, Spain, Germany, Italy and Greece were the five biggest recipients of those subsidies while Bulgaria, Slovenia, Estonia, Cyprus and Malta received the least.

Nearly half the budget was allocated for agricultural subsidies and rural development projects. By far the largest recipient was France, followed by Germany, Spain, Italy and the UK. In the future, countries like Poland are likely to become major recipients of agricultural funds. The general attitude toward these subsidies can be broadly summed up thus: “Don’t subsidies benefit EU farmers and citizens alike?” “Wouldn’t Europeans be much worse off without those farms?” The answer to the former would be “not at all”. We’ll get to the second question later but let’s first look at the supposed benefit(s) of farm subsidies.

In examining the effects of subsidies the first fallacy we stumble upon is a notoriously persistent one: the myth that government can spend money at nobody’s expense. The fact is that no government can give money to society without first or finally extracting it from society in the form of taxation – unless the money is printed, which is not usually the favored approach as it leads to rising prices. The money that Brussels gives to farmers has to come from somewhere, so in effect what happens is that the EU takes money from successful industries to give it to the  unsuccessful agricultural industry, merely to keep the latter afloat. Could there be a bigger disincentive for a business than to reward its failure by way of subsidizing it? In the long run one cannot possibly argue that the average EU citizen benefits from this policy. The farmers are the only ones that benefit from this policy, at the expense of everyone else.

The subsidies are part of the EU’s Common Agricultural Policy (CAP) which has as its official aims (1) “to improve agricultural productivity so that consumers have a stable supply of affordable food” and (2) “to ensure that EU farmers can make a reasonable living.” The EU’s online publication detailing the CAP is full of such statements as “Thanks to the CAP farmers produce what consumers want” and “The CAP drives productivity and innovation”. Such statements are downright laughable and have no factual basis whatsoever. Just think about it:: without the CAP, would farmers produce what consumers don’t want? Of course not; they would be out of a job in no-time! And would farmers be more or less incentivized to increase productivity and be innovative without subsidies? The answer is obvious to anyone with half a brain.

Another claim in the report reads: “The CAP is about our farmers”. Elsewhere in the report, however, it becomes clear that subsidies come with some heavy strings attached: “Protecting biodiversity and wildlife habitats, managing water resources and dealing with climate change are other priorities that farmers are required to respect”[1] [emphasis mine]. So the CAP is supposed to be “about our farmers” yet it limits their free choice to do what they want with their own land. Other priorities named in the report include “maintaining permanent grassland and safeguarding the scenic value of the landscape”. While one might argue that these are laudable goals for society, they also limit the farmer’s freedom of choice while offering nothing in return. Besides, even the perceived benefit for society is debatable; just because some bureaucrat in Brussels thinks the “scenic value of the landscape” should be safeguarded, doesn’t mean that EU citizens agree with that. (Not to mention the disproven climate change fantasy.) There is no telling what citizens would have spent that money on if it had not been confiscated by the EU’s bureaucratic oligarchy in the first place. To the extent that the citizens of the EU benefit from the CAP, they miss out on all of the other benefits they could have had if they would have been allowed to simply keep their money and spend it on something of their own choosing.

Finally, couldn’t the very fact that some EU farmers rely on subsidies for their livelihoods be a sign that we have too many farmers? After all, if demand for agricultural products is really as high as the CAP would have you believe, wouldn’t all farmers be able to make a decent living without subsidies? There is simply no reason why, in a free market, this demand would not be met. Indeed, if demand for agricultural products exceeded the supply, the price would go up, thereby creating an incentive either for existing farmers to produce more, or for new farmers to enter the market to supply this unmet demand. We don’t need the European Union for that. In fact, that is the last thing we need.