I am not all too sure how I feel
about the infant industry argument for protectionism. For the most part, I
disagree with the claim that a budding country necessitates trade barriers and
tariffs in order to grow. If a country has the ability to profitably produce a
good or service, then I would hope that doing so could be done simply through
development and trial and error. The country’s comparative advantage will indeed
emerge with time and effort, and any initial losses will be either made up for
through profits or regarded as essential steps towards later prosperity. I do
not feel as though protecting the infant industries will induce any sort of
destined growth, nor do I recognize losses at the start of an industry as a
beacon for tariffs that will help recover those losses. On the other hand, I do
see some merit in the logic or the infant industry protectionism. How can an
industry be incentivized to sprout up if losses are to be expected? (By
extending the view farther into the future.) Why would an industry put in the
work to hammer out efficient processes when others will just free-ride off of
their discoveries? (Because there will generally be competition in most
industries, and a market equilibrium will arise eventually regardless of when
the free-riders came about.) Don’t tariffs provide a bumper for infant
industries to fail and then succeed? (Yes, but they may also foster a false or
misplaced sense of having a comparative advantage.) In general, I would like to
think that the world and its systems tend to work themselves out. As a result, I
say “boo” to protectionist policies as they are for the weak and those who are
unfit to succeed on their own.
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