| There is an argument for it: the best technologies start out expensive and even kind of crappy and only reach the people who really want (or need, in B2B) it. Then the important features get shaken out, and as mfg comes down the learning curve the production cost drops and the price does too (to build share). So if you can increase the number of people who participate in the early stage the technology will come down the learning curve faster, which is good for everyone (except the legacy producers, in the case of a replacement technology). In other words society can get a lot of leverage from the subsidy. Of course that's the best case, and there are opportunities for regulatory capture etc. I bought my first electric car around 2000 or 1999. No subsidies back then and the product was crappy. Tesla started selling subsidized cars that were adequate to enthusiasts, what, a decade later. The environment was different: not just the subsidies but technological infrastructure. You had to put up with the limitations of Tesla, but it was a viable product. Now there are many more manufacturers of electric cars, mostly better than T. So T has to scramble (if they can, which I doubt, but whatever). So this case is a net positive, IMHO. The fossil fuel industry propered due to extensive subsidies, and that was also a very good thing (among other things it cleaned up cities and saved the whales). But they should have been withdrawn long ago. That is an extreme example of regulatory capture. |