Friday, March 18, 2011

NPR: Poster Child for Milton Friedman's Fourth Category of spending?

The House of Representatives voted 228 to 192 to defund NPR.

"The bill calls for an end to all federal funding to NPR and its affiliates.

It also prohibits stations from using federal funds to pay NPR dues and to purchase programming. It would block NPR from applying for grants provided by federal agencies such as the Corporation for Public Broadcasting, Department of Education, Department of Commerce and the National Endowment for the Arts." (1)

Simple Proposition

The simple proposition is: what is the mission of government? What public goods should state offer? Would the list of public goods include radio and television broadcast?

Government has obviously gotten into the delivery of public goods that are very much in a gray area. However, radio and television is a competitive market with many, many, many outlets. Demand for a wide variety of content had spawned a supply of a wide variety of content.

In the gray area of government delivered public goods, public radio and television is the poster child. The market delivers the content demanded by consumers. Why would the government enter a market that smoothly functions in the area of demand and supply?

If people demand the content of NPR, then NPR can deliver such content or a competitor can offer such a service. That is to say, if the market actually exists for NPR's content, NPR can deliver such content in a free market place and other competitors will enter the market and deliver the content as well.

Neither the possible competitors nor NPR deserve or should require a subsidy in a highly competitive free market that delivers a wide variety of content. That is, if NPR requires and needs a subsidy then why doesn't all radio and television outlets require a subsidy? Why do radio and television outlets thrive in a free market without subsidy but somehow some way NPR needs a subsidy?

The Simple Answer to a Simple Proposition

The simple answer to the simple proposition is that particular politicos have decided to subsidize NPR. That a non-free market solution of government intervention and subsidy has been a chosen path of particular politicos. One might say that politicos chose winners and losers and NPR was been granted "winner status" with government subsidy.
One must remember, the particular politicos that have chosen the subsidy path are doing so with your tax dollars. Its a classic case of Milton Fiedman's fourth category of spending: other people (politicos) spending other peoples' money (taxpayer money) on other people (NPR).  (2)

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