Social expendiure at a high level for Corporations

Robert Reich, a professor of public policy and US Secretary of Labor under President Bill Clinton, advocates abolishing subsidies to aerospace and oil companies, pharmaceutical and defense industries, McDonald’s, and agriculture.

Richly, the argument that corporations create more jobs thanks to subsidies or tax breaks is rife. For example, in 2013, the US state of Washington gave Boeing a huge sum of USD 8.7 billion to leave its production facilities in that US state. In the years that followed, Boeing left 12,000 employees there.

Corporations could secure billions of dollars in social spending by spending hundreds of millions of dollars on lobbying and election candidates, Reich said.

Small and medium-sized enterprises could only dream of such ‘welfare programmes’.

What Professor Reich does not mention in his brief summary: Corporations are granted subsidies or tax breaks across the industry without the state ever controlling whether individual companies create jobs, for example, or in more efficient production facilities, or whether they are misusing their profits to buy up their own shares on a large scale or to pay exorbitant compensation to management and the board. Dedicated funds are also not audited but simply paid. Jobs is the argument that protects against control.

By contrast, individual welfare recipients must disclose all their income and expenses to public authorities and be constantly controlled (and often harassed). Compare the files of a Bertelsmann Stiftung 2 (ALG2) victim with, for example, the tax file of a wealthy fellow citizen!