Republicans/free market people, should we end oil subsidies?

[Nym90]

Recently, some Democrats have been calling for a windfall profits tax for oil companies. Most Republicans denounce this idea as nonsensical, because it interferes with the free market, etc.

But if Republicans are so concerned with the free market, why do they continue to support subsidies and special tax breaks for oil companies? Shouldn't the market be free from ALL government influence?

Assuming that your question is in reference to Republicans in Congress or the party leadership in general as opposed to members of this forum, the answer would be that they are beholden to corporate interests. The concept of a free market is merely a means to an end for them, certainly not an end in and of itself.

[Nym90]

If oil prices raise above a certain value due to inreased scarcity, then companies will becomes interested in it exploring it without subsidies.

True, but it would be in the country's best interest to be proactive than reactive and wait for the market, especially in the terms of national (economic) security.

Very true. That's the biggest flaw with a completely laissez-faire economy.

[Nym90]

Unfortunately the proactive approach can backfire just as the reactive can - you might end up spending the money in the wrong places resulting in it going to waste, or the companies being subsidized might not spend the money on extraction research as you want them to. It might be better if the government spent the money on researching oil extraction and refinement itself and exchanging the new technology to the companies in exchange for lower prices for government purchases of oil rather than a direct subsidy. Still, even that might be bad as it could discourage companies from doing research of their own.

Yup.  That's the risk of doing business, be it government or private. 

Except when it's private you're risking the money of people who voluntarily invested it, while in the public case you are using the taxpayers' money.
Besides, last time I checked the government can't predict the future anymore than the market can. In fact, it's worse.

Again, that's all the risk of doing business.  The Government/Companies pay my company money for a task in the hopes that we can do it faster and cheaper than they could internally.  We do the same with other companies.  Usually it works out for the best for both parties, sometimes it doesn't. 

I view it as analogous to shareholders in a corporation. The shareholders don't necessarily agree with every single decision made by the CEO. The government in this case is simply acting as a huge corporation with 300 million shareholders. You are voluntarily investing in the country by choosing to live in it.

[Nym90]

Bono makes a good point, though, in the sense that it all pretty much comes down to who you trust more to make these types of decisions. If your image of the government is highly negative, obviously you won't trust them in these situations.

I personally have more confidence in the government's ability to be proactive than the market and better able to effect a proper solution to the type of problem being discussed here, due partially to the greater availability of capital which changes the risk/reward equation as well as being accountable for its actions to a much larger population.

The question of whether it is morally right for government to be involved in these processes is a completely seperate question.