[wildmusings]

One of the great things about business is that they don't have to follow much morality besides their own self-interest to be useful to society.

Subsidies preserve broken business models at great cost to not just taxpayers, but economic efficiency and quality of service. They create and perpetuate structural deficiencies in the economy. They reward political rent-seeking instead of creating real value for people.

As they pile up, the cumulative effect becomes worse and the ability of society to change its mind erodes. At an extreme, when subsidies drive a huge portion of economic activity, returning to a free market requires years of painful readjustment.

[TeMPOraL]

They also support business models that do good when doing good is not profitable. Or basic research, which is pretty much by definition something the market won't touch with a ten-foot pole. Or ventures that could be the milestones to fixing something big about the world (see: Tesla Motors).

The great thing about business is also one of the worst things about it. Profit drive is a very powerful optimization force, and we owe to it most of the wealth around us. It's great when it kind of follows along the lines society wants it to. But, as you said, it has essentially no reason to keep doing that, and so when being horrible and evil is more profitable, the business turns horrible and evil and that's where we need the government - an agent that does not follow the same incentive gradient - to step in and force that business to behave.

The market is like a great river. It's simple - it flows downhill. Put an obstacle on its way, and the river shall destroy it or route around it. But just as majestic and life-giving it is, it can equally easily take lives away. It will flood villages and cities without stopping. Governments are like people tasked with landscaping. They don't have the power of the river. But they can put things on its path to redirect it - whether away from settlements in danger, or towards a barren land, or straight into a power plant that will help feed millions.

We need both.

[wildmusings]

Politicians are subject to market forces just like everyone else. It just happens to be a market for votes, and the tools at their disposal include pandering to special interests, demagogy, class-warfare, and racial division. Taxes, subsidies, and regulations are driven at least as much by those as by any genuine concern for the people or the economy. And they always want to spend someone else's money instead of their own!

I agree that we need both. Basic research is a good example. I'm not familiar with the economics of electric cars, but you might be right about Tesla too. But beware the easy incrementalism of this all. Each step is logical and difficult to oppose on its own, but the collective result is a society drained of its dynamism and freedom. And then the real kicker is that the government programs that you sacrificed them to don't work. They become barriers to entry for competition, vehicles for political pork, permanent bureaucracies that lobby for their own existence, and more opportunity to waste other people's money.

As an aside, businesses do have a very good reason to continue to serve the public interest: they need to continue to create value for their customers, or they soon won't have any.

[TeMPOraL]

In a way markets and governments aren't really that different from one another. I think people often forget that neither exists in a vacuum. Politicians, like you say, are part of the market too! They want money (like everyone) and they have power and influence to sell. Supply and demand are there, and so the trade happens. To stop it completely we'd have to staff our governments with alien beings that would not desire anything we could offer them.

(And no, disbanding all governance will not make power spread itself evenly among everyone - it's not a stable state. We'd be back to having warlords instead.)

RE Tesla, they took some DOE loans (inb4 someone pops up with "evil Musk eating taxpayer money" again - loans which they paid back in full and way before the due time) that were important to their growth. It's a textbook example of why those loans, and other grants, exist in the first place.

I agree that all the problems you mentioned are real and important. Governments do create nasty issues. But they handle some things well. Markets too have issues, just different ones, and also have terrible failure modes in other areas (which include bribing governments into changing laws to benefit them instead of the general population). Personally, I'm advocating for dropping the ideological approach and just evaluating every problem on its own, whether it is solved best by top-down governance, bottom-up free market work, or some combination of both.