Jan 162009
When discussing government intervention in the economy, many times we see industries where government’s role is primarily one of suppression of an industry. That is, regulation, taxation, and trade restrictions serve to depress an entire industry. This is true in my industry, the chemical industry. It is also true in the pharmaceutical industry. While there may be differences in impact from firm to firm, generally all firms suffer from government intervention, and generally all firms can be viewed in some ways as victims of government intervention.But what happens in an industry when government subsidizes a particular set of players at the expense of another? Are all firms victims? No, The picture it turns out is very different.