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This is a different case against subsidy than the one you might be accustomed to hearing. The more usual tack is to point to the opportunity cost of such “investments.” However many jobs might be saved in the favoured industry, that is, they are offset by the jobs destroyed (or never created) in other sectors. The investment diverted into the favoured sector is simply investment diverted out of others.

Photo by Lars Hagberg/AFP/Getty Images

But in fact the case against subsidy is stronger than that. It doesn’t save jobs even in the subsidized sector. They are simply bottled up, eventually to be lost, not in tens or twenties over time but by the hundreds or thousands all at once. But by then the political leaders who provided the subsidy may hope to be out of office.

Indeed, subsidy arguably makes the eventual demise of those jobs more rather than less likely, so far as it blinds business to the reality of its situation or encourages it to avoid the sorts of hard decisions needed to put it right: a pattern I fear my own industry is about to repeat. Certainly the willingness of jurisdictions around the world to subsidize the auto sector has been materially responsible for the chronic overbuilding to which it is prone. But the industry might have been better off had it never gotten into the subsidy game in the first place.

Not that the Oshawa plant closing signals the end of it. Whatever combination of factors may have been responsible, it would be hard to call them “market forces.” Consumer demand may have shifted from sedans of the kind made in Oshawa to SUVs and light trucks, as in the longer term it is likely to shift from gasoline to electric, and self-driven to driverless. But the decisions of both industry and consumers are so distorted by multiple layers of subsidy — for different types of fuel, different sizes and makes of vehicle, to say nothing of the subsidies provided to competing modes of transport — that it is impossible to draw any firm conclusions about the underlying economics.

Except, perhaps, one. It isn’t only Oshawa that GM is shuttering: four other plant closings were announced, all in northeastern states. That suggests GM sees its future in the South and other lower-wage jurisdictions and, if that is true of GM, it is likely also true of the other American auto companies.

It would not be worth trying to save the Canadian industry if we could — Australia watched the industry depart rather than go on subsidizing it, and is thriving for it — but as we cannot, it seems a better use of our time to plan for a future without one.