Government grants always end up doing this: so let's not have government grants


We don't share the reason why these people are outraged but we do share the outrage:

Snack food and confectionery companies, including Nestlé and PepsiCo, are paid substantial government subsidies to help them make products that will damage the nation’s health, according to charities involved in heart attack prevention and obesity.

Mondelez, which split from Kraft and owns the Cadbury’s brand, was given nearly £638,000 by Innovate UK – formerly known as the Technology Strategy Board – from 2013 to 2015 to help the multinational giant develop a process to distribute nuts and raisins more regularly in its chocolate bars.

Nestlé received more than £487,000 to invent an energy-efficient machine for making chocolate, while PepsiCo was awarded £356,000 to help develop new ways of drying potatoes and vegetables to make crisps.

Given that people seem to like chacolate and crisps if taxpayers' money is going to be splurged on food companies then it might as well be on food that the taxpayers enjoy. So, to that particular criticism we offer a heartfelt "Meh".

Our outrage is concentrated upon the splurging and waste of taxpayers' money. Even, perhaps, the illogic of the attempt to defend it:

Innovate UK says the money is to make the companies’ food processes more energy-efficient and reduce their carbon footprint. In the case of Mondelez, for instance, a better way of distributing nuts in chocolate bars would mean that fewer nuts have to be bought by the company, reducing the amount of transportation used.

“The goal of the projects highlighted was to help reduce emissions and water usage in food processing,” said a spokesman. “These large firms produce a lot of food, which uses a lot of energy, so to make a difference we need to work with those large companies to help reduce their carbon footprints.”

The UK does now have a system that largely approxiamtes to a carbon tax. Therefore those carbon emissions are already internalised in the decision to transport or not transport more nuts. What this means is that the provision of a grant is in fact a complete waste of money, a reduction in the general wealth of the human species.

Think it through this way. Reducing the number of nuts purchased and or transported might well reduce the costs to the chocolatier. Against which are the costs of reducing those purchases and transporting. Only if the benefits of less purchasing and transporting outweigh the costs of doing so is the process as a whole value generating and wealth enhancing. The company itself, as a profit making institution, looked at this and decided it was not. Thus the requirement for the subsidy to get them to do this. That is, the very fact that there is a subsidy proves that (because, as above, the emissions costs are already internalised) this is wealth destruction.

The point and purpose of our paying taxes in order to stimulate innovation in the UK is not for the orgainsation spending the money to make us poorer in aggregate. Therefore let us abolish this organisation which is making us all poorer through its actions.