Re: Subsidies ...

From:         Dale Tuttle <dale.tuttle@ciesin.org>
Organization: University of Michigan
Date:         21 Mar 96 02:38:02 
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Ray Carini wrote:

>
> Boeing used it's own money to develop and build the
> Dash 80.  Three weeks AFTER it's first flight, the
> Air Force ordered 29 tanker versions designated as
> the KC-135

Yes, but the Air Force order "validated" the design for other
potential users as well as provided *lots* of cash for further
development.  Boeing clearly did, and continues to, solicit support
from the government (rent-seeking behavior).  Its not that the
government developed the dash 80, government dollars clearly
assisted its development and success.  As per more recent government
intervention, the U.S. government played a crucial role in securing
orders for Boeing (and MDD) from Saudia Arabia and other Middle
Eastern states (what states and the exact orders I don't recall).

Subsidies are often difficult to characterize.  Few subsidies are
like what we see in the agricultural world (direct cash payments for
certain behavior).  But, military orders, political influence, and
tax-breaks are all forms of subsidization.  Boeing clearly does not
receive out-right cash to develop aircraft.  But the government
helps sell its planes overseas (among other things)...which is a
subsidy.

Dale Tuttle