Economics Explored

Industry Assistance and Crony Capitalism with Darren Brady Nelson

Episode Summary

Should governments assist favoured industries such as the film industry with tax credits and subsidies? Is corporate welfare a sign of so-called Crony Capitalism? Darren Brady Nelson, Chief Economist at LibertyWorks and a Policy Adviser at the Heartland Institute, provides answers to these questions.

Episode Notes

Economics Explored host Gene Tunny is joined by Darren Brady Nelson of LibertyWorks and the Heartland Institute to discuss the economics of industry assistance or so-called corporate welfare. Gene and Darren also consider the concept of crony capitalism. 

This episode’s topic was prompted by an interview request host Gene Tunny had from an Australian ABC journalist regarding the Australian Government’s generous tax incentives for the film industry (e.g. check out Australian Prime Minister Scott Morrison’s July 2020 announcement New $400 million incentive to boost jobs for screen industry).

In 2019, Gene and Darren co-authored a paper on bad spending decisions made by the state of Queensland, Australia for Tax and Super Australia’s Special Centenary Publication: Government Waste, and identified generous spending on Screen Queensland and the state government paying for the construction of a new sound stage at Village Roadshow studios on the Gold Coast.

Gene has previously written extensively on film industry assistance in Australia - e.g. this 2017 Centre for Independent Studies Policy paper: The case against film industry subsidies

On the experience of other jurisdictions with subsidies to the film industry, check out this Advocate article: Film tax break costs Louisiana millions, new study shows

Regarding what a refundable tax credit is, check out the IRS website

On trends in industry assistance in Australia, check out the Productivity Commission’s Trade and Assistance Review

Finally, check out Dan Mitchell’s write up of Milton Friedman’s matrix which Darren and Gene discuss in the episode. 

About this episode’s guest 

Darren Brady Nelson is an Austrian school economist who serves as the chief economist at LibertyWorks and as an associate scholar with the Center for Freedom and Prosperity. Nelson is also a policy advisor to The Heartland Institute.

Since 1994, Nelson has worked as an economist in Australia, New Zealand, United Kingdom, and the United States. Nelson’s work in economics has focused on the energy, finance, government, transportation, water, and telecommunications industries.

Nelson has also worked as a political and policy commentator since 2009. As a commentator, Nelson has written articles for numerous conservative and libertarian publications and think tanks, and he has appeared on countless podcasts, radio shows, and television programs.

He is the author of the book Ten Principles of Regulation & Reform (Connor Court 2017), and is frequent public speaker and media commentator.

Nelson has bachelor’s degree in economics (cum laude) from the Australian National University, where he majored in economic history. Nelson also earned a master’s degree in commerce (magna cum laude) from the University of New South Wales, where he majored in business law.