Corporate welfare

Corporate welfare

Corporate welfare is a perjorative term describing a government's bestowal of money grants, tax breaks, or other special favorable treatment on corporations or selected corporations. The term compares corporate subsidies and welfare payments to the poor, and implies that corporations are much less needy of such treatment than the poor. The Canadian New Democratic Party picked up the term as a major theme in its 1972 federal election campaign.[1] Ralph Nader, an American critic of corporate welfare,[2][3] is often credited with coining the term.[4]


As corrupt subsidies

Subsidies considered excessive, unwarranted, wasteful, unfair, inefficient, or bought by lobbying are often called corporate welfare. The label of corporate welfare is often used to decry projects advertised as benefiting the general welfare that spend a disproportionate amount of funds on large corporations, and often in uncompetitive, or anti-competitive ways. For instance, in the United States, agricultural subsidies are usually portrayed as helping honest, hardworking independent farmers stay afloat. However, the majority of income gained from commodity support programs actually goes to large agribusiness corporations such as Archer Daniels Midland, as they own a considerably larger percentage of production.[5]

According to the Cato Institute, the U.S. federal government spent $92 billion on corporate welfare during fiscal year 2006. Recipients included Boeing, Xerox, IBM, Motorola, Dow Chemical, and General Electric.[6]

Alan Peters and Peter Fisher have estimated that state and local governments provide $40-50 billion annually in economic development incentives,[7] which many critics characterize as corporate welfare.

Some economists consider the recent bank bailouts in the United States to be corporate welfare.[8][9] U.S. politicians have also contended that zero-interest loans from the Federal Reserve System to financial institutions during the global financial crisis were a hidden, backdoor form of corporate welfare.[10]

See also


  1. ^ Lewis, David. Louder voices: The corporate welfare bums (Lewis & Samuel, 1972).
  2. ^ Cutting Corporate Welfare by Ralph Nader. Seven Stories Press, 200o.
  3. ^ Testimony of Ralph Nader Before the U.S. House of Representatives June 30, 1999
  4. ^ Yarrow, Andrew L. (2008). Forgive Us Our Debts: The Intergenerational Dangers of Fiscal Irresponsibility. Yale University Press. p. 110. 
  5. ^ USDA: American Farms
  6. ^ The Corporate Welfare State: How the Federal Government Subsidizes U.S. Businesses by Stephen Slivinski. Cato Institute, 2007.
  7. ^ Alan Peters and Peter Fisher, "The Failures of Economic Development Incentives, Journal of the American Planning Association, Volume 70, Issue 1, March 2004.
  8. ^ Stiglitz, Joseph (December 8, 2010), "US could cut deficit and gain, but that's unlikely", Sydney Morning Herald,, retrieved 2010-12-22 
  9. ^ Folbre, Nancy (April 20, 2009), "Welfare for Bankers", New York Times,, retrieved 2011-04-28 
  10. ^ Schroeder, Peter (December 1, 2010), "Sanders uses 'jaw-dropping' Fed disclosures to call for further inquiry", The Hill,, retrieved 2010-12-15 

Further reading

  • Johnston, David Cay. Free Lunch (The Penguin Group, New York, 2007.)
  • Jansson, Bruce S. The $16 trillion mistake: How the U.S. bungled its national priorities from the New Deal to the present (Columbia University Press, 2001)
  • Mandell, Nikki. The corporation as family : the gendering of corporate welfare, 1890-1930 (University of North Carolina Press, 2002).
  • Glasberg, Davita Silfen. Corporate welfare policy and the welfare state: Bank deregulation and the savings and loan bailout (Aldine de Gruyter, NY, 1997).
  • Whitfield, Dexter. Public services or corporate welfare: Rethinking the nation state in the global economy (Pluto Press, Sterling, Va., 2001.)
  • Folsom Jr, Burton W. The Myth of the Robber Barons (Young America)
  • Rothbard, Murray N. Making Economic Sense, Chapter 51: Making Government-Business Partnerships ISBN 0-945466-18-8 (1995)

External links

Wikimedia Foundation. 2010.

Look at other dictionaries:

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