I return to an old favorite topic of mine this week, government subsidies for business relocation, in my column at Forbes.com. An excerpt:
To see this clearer, lets take the example of Major League Baseball (MLB). We all know that cities and states have for years been massively subsidizing new baseball stadiums for billionaire team owners. Let’s for a minute say this never happened – that somehow, the mayors of the 50 largest cities got together in 1960 and made a no-stadium-subsidy pledge. Would baseball still exist? Sure! Teams like the Giants have proven that baseball can work financially in a private park, and baseball thrived for years with private parks. But would baseball be in the same cities? Well, without subsidies, baseball would likely be in the largest cities, like New York and LA and Chicago, which is exactly where they are now. The odd city here or there might be different, e.g. Tampa Bay might never have gotten a team, but that might in retrospect have been a good thing.
The net effect in baseball is the same as it is in every other industry: Relocation subsidies, when everyone is playing the game, do nothing to substantially affect the location of jobs and businesses, but rather just transfer taxpayer money to business owners and workers.