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Bombardier and business subsidies

From a very good text by Pierre Lemieux on subsidies to Bombardier, visit the following interesting discussion on the effects of such policies. Specifically, comments David. It all comes back to Frederic Bastiat (1801-185), which was extensively discussed "what we see and what is not seen". Several of his texts can illuminate the debate on the utility to subsidize an activity, including public works A gain and two losses against .

Here's a comment I added to the thread:

According JNH, "In effect, these subsidies are necessary. No, I mean no cutting industry in the area of Bombardier aircraft can boast of successful without subsidies. In the U.S., Boeing receives subsidies in the form of contract R & D military. "And according to Richard," Most other aircraft manufacturers (Boeing, Airbus, Sukhoi ..) depend on the lucrative military contracts to maximize their commercial arm, that Bombardier can not enjoy (sic) by the absence of an air force with bottomless pockets

...". In fact, military grants have little to do with competition in civil aviation. Unless the military funded research is not directly usable a civil suit by the company, the profits of a military branch have no impact on profits of the industry calendar. How could we understand that a firm that makes, say, 5 billion in profits military would choose to lose money in the civilian sector? It's almost as if Toyota decided that, as it makes profits with the production of cars, it will now begin to produce more bicycles, then it is sure to lose money forever in this field. I do not think the shareholders are very excited about this opportunity. The

bottom line is simple: we produce civilian aircraft if it is profitable, so if the value of the aircraft exceeds the value of resources put into it. If the only way to do that is through grants, it is destroying value. It is certainly not becoming more prosperous ... (Unless the shareholders of Bombardier subsidized).

Finally, a word about the possibility of military research, Boeing, for example, has the effect of lowering its cost of production of civil aircraft. In this case we are dealing with a positive production externality: it is cheaper to produce two types of real one. Pierre Lemieux pointed out to me, very fair to me that Boeing would then be more efficient and produce civilian aircraft with fewer resources than Bombardier. The logic of comparative advantage leads to a clear conclusion: Bombardier to go do something else.