Who needs subsidies for alt-fuel cars?

Every entrepreneur that’s in the business of making something new or better would love to get government subsidies to help them “reach economies of scale”, or “pay for the social benefit of being green”, or some such thing. Of course they would. Government intervention can reduce the risk of innovation, and can even force customers to buy your product whether they like it or not. Such subsidies are fundamentally unjust, however, because in effect, taxpayers end up paying for the research and carrying the risk, without being able to share in the entrepreneur’s profits should he succeed. I’d also like to do business on those terms. After all, the only cost of such a subsidy is a pledged vote. It would put a floor below my losses, and boost my potential profits, all at some other sucker’s expense. Nice. And that sucker can’t even argue, because tax is the sole remaining debt for which people still get thrown in prison.

This Cato Institute paper from 2005 explains the problem neatly:

The current debate about U.S. oil policy is equally enlightened. It is dominated by a special-interest lobby whose primary interest is to enrich automakers and alternative-fuel producers, and by journalists whose enthusiasm for the green agenda has clouded their understanding of basic economics.

My question is, when a private organisation raises a prize purse, and the contenders look like this, who needs government subsidies anyway?

(Click on any of the images for the relevant Popular Mechanics page.)

I haven’t looked into the economics of each car, because that’s not my problem. The Tesla Roadster, for one, has already proven perfectly competitive and very, very desirable. All that’s required is an investor with his own money to stake on the notion that a market might exist. Governments are not only singularly unsuited to determine the latter, but have no right to gamble taxpayer money on it.

So welcome back to the glory days of the industrial revolution, when ingenuity, risk and free market capitalism built the modern world. And thanks to the X-Prize Foundation for demonstrating that the economics of human action and progress is alive and kicking.

PS: Prescient typo, perhaps, on www.tesla.com? “The associated domain name has been reserved by a GANDI’s customer and parked as unsued.”