Cronyism: Intel Edition | National Review

Cronyism: Intel Edition | National Review

An Intel computer chip logo at the Electronic Entertainment Expo in Los Angeles, Calif., June 11, 2019. (Mike Blake/Reuters)

It isn’t difficult to see why capitalism gets a bad name when many big companies have the receipt of government subsidies as part of their business plan. See the Wall Street Journal here:

Intel Corp. INTC said it would invest $36 billion in chip production and research across Europe, including a new chip-making complex in Germany, to keep pace with surging demand for semiconductors….

Intel is among a raft of chip companies responding to unprecedented demand for digital products and a global chip shortage that has amplified the need for more manufacturing. Semiconductor industry sales globally surpassed $500 billion for the first time last year, and executives believe that total could double in less than a decade. . . .

Mr. Gelsinger suggested that the German project was contingent on government support coming through, saying in a webcast Tuesday that there was still work to be done to secure permits and “financial support needed to make the project competitive.” . . .

The precise amount of cash needed will depend on the scale of government subsidies, the company said.

This is Europe, but the same dynamic is true in the U.S., where Congress is considering throwing lots of cash to private chip production. Scott Lincicome documents the many weaknesses in the case for subsidizing domestic chip production. And yet companies keep asking for, and counting on, such subsidies. It’s no wonder then that the public supports government regulation of these companies’ affairs. You can’t have it both ways: Play the free-market card when you don’t like the government constraints and beg for handouts every opportunity you get.

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

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Tony Beasley
Tony Beasley writes for the Local News, US and the World Section of ANH.