Why do subsidies, which have such widespread devastating consequences for the economy and for society at large, continue to receive widespread support in an interventionist economy?

• Subsidies, like other forms of intervention, are seldom subjected to careful, reality-oriented, cause-and-effect analysis. If a subsidy is proposed to support end X, people ask only whether or not X is desirable. Consequently, they fail to foresee the unintended side-effects of the subsidy program on human action or even to investigate whether it is the best means to end X.

• People assume that their own favored ends will coincide with the ends favored by others and will therefore receive the largest subsidies. For instance, a business person naturally imagines that everyone recognizes that his or her company or industry is of the utmost importance and will therefore be the first recipient of governmental largess. Such a person, of course, is motivated not by rational selfishness as discussed in Section 3, but rather by an irrational, egocentric world-view.     

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