It would only be a subsidy if WM got access to it on preferential terms to the rest of us.
That doesn’t pass the laugh test.
You calculation holds for anyone that uses large trucks, not just Wal-mart.
It’s not a subsidy specific to WM, no, but a structural subsidy to certain ways of doing business. Your argument is like saying corn subsidies don’t subsidize corn farmers because anyone can choose to farm corn.
That’s not a good comparison: most people don’t know how to grow corn and navigate the corn subsidy system (and it’s largely set up to prevent newcomers from getting in on the action), while most everyone knows how to use and gain legal access to the roads.
A better example would be if someone sold you the service of (in the pre-net days) researching a topic at the library for you and writing a report about it. Say that Bob does this for a living. Would you say that publically funded libraries are subsidizing Bob?
If so, it’s only in a trivial sense: a public benefit is funded by everyone and provided to everyone. Bob just makes a more profitable use than you do, and you’re just as capable of going to the library yourself and looking these things up. (modulo comparative advantage &c.)
Yes, I would say that a public funded libraries subsidizes Bob. It just that I see that as a good, and useful subsidy, as information is a non-rivalrous good.
I’m not arguing from a position of moral outrage that Wal-Mart is being unfairly advantaged by the governments funding of the interstate highway system. They do indeed just seem to be taking advantage of the current landscape. The point is that this subsidy disturbs the market for shipping, pushing it away from a global optimum. It is useful to see how the changed incentives play out and cause overconsumption, and using Wal-Mart as a prototypical example is a reasonable thing to do.
Usually when economists use the term “subsidize” they only mean a government action that benefits someone—since that’s all that matters for economic analysis.
edit: note the point of Chronos’ original post: that the IHS crowds out other methods of shipping goods. This is true even if the IHS only subsidizes shipping by truck in your “trivial” sense.
Chronos also singled out WalMart as such as receiving subsidies, which is a case of “agree denotationally but not connotationally”. If the government taxes everyone to provide police protection to everyone, you can equally say that “Wal-mart’s protection costs are subsidized” and it would be just as vacuous.
To the extent that Chronos was singling Wal-mart out, he is in error for that reason. That was my point.
Furthermore, claiming that other shipping methods are crowded out implies that Wal-Mart’s founders would have been helpless about handling that environment, which is wrong. (Again, it’s technically correct, but misleading.) It’s like the case of “oh, GM is a big company, but only got that way because of government contracts for tanks …”—as if GM would have just carried on making worthless tanks for a non-existent market if not for those government purchases!
Furthermore, claiming that other shipping methods are crowded out implies that Wal-Mart’s founders would have been helpless about handling that environment
I don’t understand where this implication is coming from
FWIW, I agree with wnoise, public funding of a library is a subsidy for the users of the library. If publicly funded libraries didn’t exist, privately funded ones would, and those privately funded libraries would charge people money just as surely as a privately funded museum charges admissions. (And they’d probably have a “Second Tuesday of the month is free” special, much like a museum.)
Note: when I say something is a “subsidy” I am attempting to state a fact, not attempting to make a moral judgment. In the specific case of a public library, I think they’re overdone and a bit of an applause light but ultimately a good use of community tax dollars. But if something costs tax dollars, and it does not benefit the people taxed in proportion to the amount of tax taken from them, then this is the thing that I am referring to when I use the label “subsidy”. (The matter is, of course, complicated because “benefit” is much more nebulous than “direct benefit”.)
That doesn’t pass the laugh test.
It’s not a subsidy specific to WM, no, but a structural subsidy to certain ways of doing business. Your argument is like saying corn subsidies don’t subsidize corn farmers because anyone can choose to farm corn.
That’s not a good comparison: most people don’t know how to grow corn and navigate the corn subsidy system (and it’s largely set up to prevent newcomers from getting in on the action), while most everyone knows how to use and gain legal access to the roads.
A better example would be if someone sold you the service of (in the pre-net days) researching a topic at the library for you and writing a report about it. Say that Bob does this for a living. Would you say that publically funded libraries are subsidizing Bob?
If so, it’s only in a trivial sense: a public benefit is funded by everyone and provided to everyone. Bob just makes a more profitable use than you do, and you’re just as capable of going to the library yourself and looking these things up. (modulo comparative advantage &c.)
Yes, I would say that a public funded libraries subsidizes Bob. It just that I see that as a good, and useful subsidy, as information is a non-rivalrous good.
I’m not arguing from a position of moral outrage that Wal-Mart is being unfairly advantaged by the governments funding of the interstate highway system. They do indeed just seem to be taking advantage of the current landscape. The point is that this subsidy disturbs the market for shipping, pushing it away from a global optimum. It is useful to see how the changed incentives play out and cause overconsumption, and using Wal-Mart as a prototypical example is a reasonable thing to do.
Usually when economists use the term “subsidize” they only mean a government action that benefits someone—since that’s all that matters for economic analysis.
edit: note the point of Chronos’ original post: that the IHS crowds out other methods of shipping goods. This is true even if the IHS only subsidizes shipping by truck in your “trivial” sense.
Chronos also singled out WalMart as such as receiving subsidies, which is a case of “agree denotationally but not connotationally”. If the government taxes everyone to provide police protection to everyone, you can equally say that “Wal-mart’s protection costs are subsidized” and it would be just as vacuous.
To the extent that Chronos was singling Wal-mart out, he is in error for that reason. That was my point.
Furthermore, claiming that other shipping methods are crowded out implies that Wal-Mart’s founders would have been helpless about handling that environment, which is wrong. (Again, it’s technically correct, but misleading.) It’s like the case of “oh, GM is a big company, but only got that way because of government contracts for tanks …”—as if GM would have just carried on making worthless tanks for a non-existent market if not for those government purchases!
I don’t understand where this implication is coming from
Politics is a mind killer.
FWIW, I agree with wnoise, public funding of a library is a subsidy for the users of the library. If publicly funded libraries didn’t exist, privately funded ones would, and those privately funded libraries would charge people money just as surely as a privately funded museum charges admissions. (And they’d probably have a “Second Tuesday of the month is free” special, much like a museum.)
Note: when I say something is a “subsidy” I am attempting to state a fact, not attempting to make a moral judgment. In the specific case of a public library, I think they’re overdone and a bit of an applause light but ultimately a good use of community tax dollars. But if something costs tax dollars, and it does not benefit the people taxed in proportion to the amount of tax taken from them, then this is the thing that I am referring to when I use the label “subsidy”. (The matter is, of course, complicated because “benefit” is much more nebulous than “direct benefit”.)