The Real Reasons To Pass On Government Subsidies


June 29, 2015 by Liberty

Being a libertarian introduces you to hundreds of ways of using the system for personal benefits. Libertarianism introduces these methods as a way to show why government programs fail. A libertarian gets a crash course on political manipulation through all kinds of different loopholes.

For example, you might hear that some rich person pays less in taxes than his own secretary. While the mainstream news sources end the story there and let the standard conditioning assume it’s a problem with government not taxing rich people. Libertarian sources will explain how it’s actually just a poor measurement of who’s rich and who’s poor (and completely ignoring taxes paid by the corporations that rich person is in ownership of.) For example, that rich person keeps his assets in sources that the government taxes significantly less. Or, that rich person intentionally doesn’t take in all that big an “income” but gets his lifestyle through his job title. (Business trip… to Hawaii!)

The stories that libertarians listen to introduce them to all the ways people take advantage of the system to improve their own lives. Rich people do it. Poor people do it. Even the middle class does it. Some may benefit more than others but it’s the game that everyone plays.

I’ve always been encouraging about using these subsidies legally. If you legally qualify (or can make yourself legally qualified) for a subsidy. In the past, I would have strongly encouraged you take advantage of it. I recently was introduced to some ideas that made me doubt my original opinion but… before getting to that.


As soon as a libertarian says he’s taking advantage of some government loophole a boatload of idiots will start calling him a hypocrite. It’s been said so many times that even libertarians fall for it but it’s miles from the truth in most cases.

Sure, if a libertarian subscribes to the belief “a person shouldn’t take advantage of government subsidies,” and then takes advantage of government subsidies, perhaps they are hypocritical. That doesn’t make much sense to me though. It seems completely against self-ownership. I’ll get more into that later.

If they subscribe to a belief that says, “a government shouldn’t LET people take advantage of government subsidies” or “government shouldn’t give subsidies because people can take advantage of them,” then it’s not hypocritical.

As much as people like to say you’re doing something immoral when you accept a government benefit, it’s really not that easy to define. It’s similar to asking what’s the moral thing to do when someone is mugging you? Should you pull a gun on them? I don’t know. The truth is, any chance of that being a moral situation left when the first person decided to mug you.

Morality is irrelevant in a coerced situation. If Person A held a gun up to Person B and told Person B to shoot Person C then would Person B be held responsible for Person C’s murder? Of course not. It was a completely coercive situation. What if Person B somehow shot Person A instead? Would Person B be held responsible for Person A’s murder? Still… no… when someone has a gun to your head everything changes.

Government exists under the threat of violence. That is the what makes it different than a business or a knitting club. If you choose to violate government rules you will be kidnapped. If you protect yourself from kidnapping. You will be shot. Morality does not exist in this framework.

And no, this framework doesn’t include everything in life. You have to consider the level of coercion in the situation and provide an appropriately scaled response. For example, if I guy comes up and says “I need a dollar,” and while you’re walking away he adds, “Well… you’ll get what’s coming to you.” You can’t suddenly pull a gun and say that’s a coercive death threat. Common sense applies.

Accepting government subsidies is like getting mugged and then accepting the muggers offer to leave you a twenty for the taxi ride home. It doesn’t consent to the original mugging. It doesn’t make the situation good.

The Precarious Balance

Government is a fickle partner.

You can’t count on it.

Whenever you decide you accept a government subsidy, you’re accepting the requirements laid out by government. You’re stuck using the government’s framework to make your decisions. You’re suddenly playing the government’s own game.

If you decide to take a federally subsidized loan, you’re at the mercy of the government. First of all, at any point, they can change your terms. While private companies have contracts that government will enforce, government typically creates contracts that government wouldn’t legally enforce from a corporation. (Clause 2. We do whatever we want whenever we want. Blow Us.)

Government subsidies are designed with hoops you’ll be required to jump through. If you happen to jump through the wrong hoop, the consequences could be jail time. (Usually you’ll just fail to get the subsidy though.) As long as you’re accepting that subsidy, your life is going to be a bob and weave to try and beat government.

Of course, government is slow. Bobbing and weaving is a very practical thing to do. If you happen to be a million dollar corporation that can afford lawyers to handle all the details then government bobbing and weaving is practical. (You also don’t risk jail time.) If you’re the average Joe without much legal knowledge, this bobbing and weaving could cost significantly more in time wasted than it’s worth in money received.

Is that always the case? I don’t know. I’ve done a number of estimates on it. Some benefits may be well worth the bobbing and weaving. You just need to hope that it stays that way.


This is an idea I was just recently introduced to. I had thoughts about it in the past but I had never been explained the idea as clearly before. It’s an idea that I found particularly fascinating. Honestly, I don’t know how I feel about it but… it’s worth thinking about.

I was being told a story about how they domesticate ducks. A person goes to a place where ducks are. The person feeds the ducks daily. Day after day, the ducks become more comfortable trusting that person to feed them. Just keep that process up, right through winter. If winter starts and they’re still there, you’ve got em’.

Then, to make the situation even better, eventually the ducks will breed. All the baby ducks won’t know what life was like before domestication. It will be a generation of domesticated ducks. Eventually all the ducks will never know anything but being taken care of.

Think about how this applies to government.

Government programs are designed to domesticate people. For example, to milk food stamps, you’d have to make less money and not have a big savings account. Sure, there are some ways you can intentionally set yourself up in that situation without being irresponsible but it’s hard. (Primary residences don’t count for many states as assets. Invest in a home. Spend money to improve that investment. Also, this isn’t legal advice. It’s just a wild example that can for all legal purposes, be considered, fiction.)

Every government subsidy is designed to make it difficult to stay independent and smart. With big corporations, regulations are often subsidies. The big corporation is given free reign to create regulations to drive out their competitors. That’s great but if government were to step out of the situation a few years later, the company couldn’t compete because the increase in competition wouldn’t work for the “domesticated” employees. (Customer service? Who cares when you’re the only source of a service?)

Sure, maybe there are ways to make this work in your favor. I imagine the regular readers of this blog are smart enough to play the system for their own benefit. Quite frankly, it would make me happy to know the stolen resources are ending up in smart people’s hands. That being said, you better hope you’re smart enough.

The risks of working with government are harsh.

If you make the mistake of becoming dependent then you’re going to be the one to suffer the consequences. Sure, we might like to think we’re smarter than ducks but assume too much and you might just be a quack…

( It’s a bad joke… but I’m keeping it. Screw any editor that wants otherwise.)

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One thought on “The Real Reasons To Pass On Government Subsidies

  1. Zer says:

    I am exactly in that position of being called a hypocrite: each year, I do all the paperwork to get 300k$ in subsidies for my software company, from the federal and provincial (Canada) R&D programs. Of course, my socialist friends find this to completely invalidate my libertarian (even anarchist) position. How can this position be taken seriously if I even do not practice what I preach? I tried several analogies with the mafia (similar to yours with the $20 post-mugging return), to no avail. I am a hypocrite, amen.

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