Subsidies

5 Pages 1160 Words

Subsidies are payments, economic concessions, or privileges
given by the government to favor businesses or consumers. In the
1930s, subsidies were designed to favor agriculture. John Steinbeck
expressed his dislike of the farm subsidy system of the United States
in his book, The Grapes of Wrath. In that book, the government gave
money to farms so that they would grow and sell a certain amount of
crops. As a result, Steinbeck argued, many people starved
unnecessarily. Steinbeck examined farm subsidies from a personal
level, showing how they hurt the common man. Subsidies have a variety
of other problems, both on the micro and macro level, that should not
be ignored. Despite their benefits, farm subsidies are an inefficient
and dysfunctional part of our economic system.
The problems of the American farmer arose in the 1920s, and
various methods were introduced to help solve them. The United States
still disagrees on how to solve the continuing problem of agricultural
overproduction. In 1916, the number of people living on farms was at
its maximum at 32,530,000. Most of these farms were relatively small
(Reische 51). Technological advances in the 1920's brought a variety
of effects. The use of machinery increased productivity while reducing
the need for as many farm laborers. The industrial boom of the 1920s
drew many workers off the farm and into the cities. Machinery, while
increasing productivity, was very expensive. Demand for food, though,
stayed relatively constant (Long 85). As a result of this, food prices
went down. The small farmer was no longer able to compete, lacking the
capital to buy productive machinery. Small farms lost their
practicality, and many farmers were forced to consolidate to compete.
Fewer, larger farms resulted (Reische 51). During the Depression,
unemployment grew while income shrank. "An extended drought had
aggravated the farm problem during the ...