Rather than increasing competition in the market and decreasing government spending, neoliberalism has driven states to compete by appealing to transnational corporations. Direct subsidization to attract investment has become one of the most egregious normalization of this process, and Hollywood and the film industry have become some of the most active participants to this system. Indeed to have a functioning film industry, government subsidies are essential, commonly paying out up to a third of the production costs. Per employee these are some of the highest subsidy rates of any industry, and with most of the world participating, they offer little long-term benefit to anyone besides the most global Hollywood studios. Rather, this creates greater dependency on the Major film studios by local government, workers, and small production companies to attract large production spending, but end up supporting an ever expanding system of subsidization.

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