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AskMe: Should government protect local industry?   (Site not responding. Last check: 2007-10-29) The problem is that the infants never grow up, because once the protections are established, they become "special interests" who are well-protected and never go away. For example, in Japan, the auto industry in the 1960s was just getting started and faced harsh competition from the established US giants. Infant industry protection does make sense if there are international competitors and you want the industry in your country. www.ontheissues.org /askme/infant.htm   (420 words)

George, Protection or Free Trade, Chapter 10: Library of Economics and Liberty They have scouted the idea of attempting to encourage all industry, and declared the encouragement of industries not adapted to a country, or already established, or for a time longer than necessary for their establishment, to be waste and robbery. On the whole, the ability of any industry to establish and sustain itself in a free field is the measure of its public utility, and that "struggle for existence" which drives out unprofitable industries is the best means of determining what industries are needed under existing conditions and what are not. Since these industries that cannot be protected constitute by far the larger part of the industries of every country, the utmost that by a protective tariff can be attempted is the encouragement of only a few of the total industries of a country. www.econlib.org /library/YPDBooks/George/grgPFT10.html   (2275 words)

Trade: Chapter 100-4: The Infant Industry Argument and Dynamic Comparative Advantage One counter-argument to this theory is that by protecting infant industries, countries are not allocating resources in the short-run on the basis of comparative advantage. Suppose that the infant industry argument is used to justify protection for this currently non-existent domestic industry. Thus in order for infant industry protection to work it is important to set the tariff for the correct industries, at the correct level, and for the correct period of time. internationalecon.com /Trade/Tch100/T100-4.php   (3143 words)

The Infant Industry Argument and Dynamic Comparative Advantage One counter-argument to this theory is that by protecting infant industries, countries are not allocating resources in the short-run on the basis of comparative advantage. Suppose that the infant industry argument is used to justify protection for this currently non-existent domestic industry. Thus in order for infant industry protection to work it is important to set the tariff for the correct industries, at the correct level, and for the correct period of time. www.internationalecon.com /v1.0/ch100/100c050.html   (3131 words)

Nassau Institute According to this argument, the industry loses $10 during its infancy and generates $8 of profits when it is mature, but the overall losses of $2 are offset by the fact that the increase in capital formation generates economic growth that is beneficial to society overall. The problem with this argument is that protection does not increase the amount of capital available, it simply reallocates capital from unprotected industries, comparative advantage industries, to protected industries, which tend to be industries that do not have a comparative advantage. A fourth pro-protectionist argument is the anti-trade deficit argument. www.nassauinstitute.org /wmrate.php?ArtID=344   (3567 words)

Money, Method, and the Market Process Ch 9 The industries of America, and Australia and of the Eastern countries of Europe in their infancy amply enjoyed the blessings resulting from the infant industry protection argument. These arguments are: the argument of national prestige, the war argument, the wages argument, the over-population argument, and the monetary or foreign exchange argument. These modern industrial countries are thus in relation to the rest of the world in the same position as the centers of industry are in relation to the agricultural and raw material producing districts of their own country. www.mises.org /mmmp/mmmp9.asp   (9789 words)

Institute of Economic Affairs Economic arguments for protection of the domestic financial-service sector include three pure economic arguments and a number that are economic in form, but nationalist in substance, in that they depend upon allegedly different responses to economic incentives by domestic as opposed to foreign FSPs. The first possibility is that the industry is subject to economies of scale that are external to the firm -- that is, that the costs of firms in the industry depend upon the output of the industry as well as on their own output. This argument is a version of the more general proposition that the state should use its powers of taxation to reduce the burden on banks of their non-performing debt. www.iea.org.uk /record.jsp?type=article&ID=31   (7075 words)

infant mortality rate - Hutchinson encyclopedia article about infant mortality rate   (Site not responding. Last check: 2007-10-29) Measure of the number of infants dying under one year of age, usually expressed as the number of deaths per 1,000 live births. Improved sanitation, nutrition, and medical care have considerably lowered figures throughout much of the world; for example, in the 18th century in the USA and UK infant mortality was about 500/1,000 compared with under 10/1,000 in 1989. The lowest infant mortality rate is in Japan, at 4.5/1,000 live births. encyclopedia.farlex.com /infant+mortality+rate   (176 words)

AskMe: Should government protect local industry?   (Site not responding. Last check: 2007-10-29) It's called the "infant industry" argument -- when an industry in its in infancy, the argument goes, it needs government protection to get started or it will be swallowed up by international competition. Infant industry protection does make sense if there are international competitors and you want the industry in your country. They couch their request as an "infant industry" protection, but what's really going on is a guy wants to have a protected monopoly on producing local cars so he can make a personal fortune. www.govote.com /askme/infant.htm   (420 words)

Untitled Document Another popular argument in favor of protectionism based on national interests is the desire to protect infant industries in order to nurture them to a point of competitiveness. Nigeria's attempts to properly identify an infant industry with growth potential (which would benefit from trade barriers) are likely to encounter the same difficulties as the 1970's top down efforts to promote economic development by correctly pinpoint goods for which import substitution is likely to prove successful. Our hypothetical infant industry is currently noncompetitive because its small size denies it the cost advantages of economies of scale and its lack of experience in the field admits for the possibilities of efficiency gains as it learns by doing. www.columbia.edu /itc/economics/weissman/u4595/lectures/lecture6/lecture6.html   (7370 words)

International Economics: Infant Industry Protection   (Site not responding. Last check: 2007-10-29) The so-called "infant industry" argument is frequently used as justification for either erecting or maintaining barriers to trade. The argument is this: new industries, often in the manufacturing sector, are unable to survive in the global market because of competition from established firms--often based in developed countries--in a particular industry. There are instances when the infact industry argument is "theoretically valid", but these instances are very specific, and it is often the case that it is used to justify protectionism when the industry in question is not in fact an infant one. john.mcadams.com /intlecon/infantindustry.html   (895 words)

Econ 201 Exams. #3 Professor Twomey UM-D One of the arguments that is proposed in favor of tariffs is the "infant industry" argument. One of the arguments in favor of tariffs is the so-called infant industry argument. One of the standard arguments in favor of tariffs is the so-called infant industry argument. www-personal.umd.umich.edu /~mtwomey/econhelp/201files/201ex3.html   (14418 words)

The Protective Tariff In practice this argument is destroyed, as those "infant industries" that are protected usually fail to grow out of the infant stage, and are not able to face foreign competition. Protection of Home Industry: This argument is most prevalent at the moment, and it involves government and entrepreneurs appealing to the public patriotism to buy "Australian made" products, no matter the price the public has to pay or the quality of the product purchased. Labor's exact plans are to reduce tariffs for most industries to 5% by 1996, clothing, textiles and footwear at 25% and automotive rates at !5% by the year 2000, with no possible changes to legislated program until 1996. www.studyworld.com /newsite/ReportEssay/Science/Technical\The_Protective_Tariff-381758.htm   (1026 words)

Chapter 10 Krugman Summary & Homework Government policy to promote industrialization has often been justified by the infant industry argument, which says that new industries need a temporary period of protection from competition from established competitors in other countries. The infant industry argument is valid only if it can be cast as a market failure argument for intervention. Using the infant industry argument as justification, many less-developed countries have pursued policies of import-substituting industrialization in which domestic industries are created under the protection of tariffs or import quotas. www.cba.nau.edu /eastwood-j/eco486/krugch10.htm   (894 words)

International Economics Glossary: I Thus growth that is based disproportionately on accumulation of the factor used intensively in the import-competing industry and/or technological progress favoring that industry. It may be motivated by the infant industry argument, or simply by the desire to mimic the industrial structure of advanced countries. Refers to the structure of intermediate transactions among industries, in which one industry's output is an input to another, or even to itself. www-personal.umich.edu /~alandear/glossary/i.html   (4035 words)

Arguments for Protection   (Site not responding. Last check: 2007-10-29) Those in developed economies working in old fashioned manufacturing industries where the good can usually be made cheaper in a developing country must accept the fact that developed economies are moving away from the production of manufacturers towards the service sector. The infant industry argument asserts that a new industry having a potential comparative advantage may not get started in a country unless it is given a temporary protection against foreign competition. If the long run outlook of an infant industry is so bright, there would be domestic entrepreneurs who would be willing to invest in that industry. www.eco.utexas.edu /graduate/Konstantinova/i5_Protection.htm   (4597 words)

The Eight Myths of Protectionism Closely intertwined with the "cheap 'labor" argument is the llovervaluedll dollar argument As the value of the dollar has risen against other major currencies since 1980, so has the chorus of complaints about a loss of competitiveness due to factors beyond the control of industry. Some young industries will achieve competitiveness in world markets, it is argued, if they receive temporary protection from foreign competition ness in their early years by mature foreign competitors imposed, barriers are difficult to eliminate--witness the textile industry, which received infant industry protection in the early 19th century and is still protected today. Those industries that already benefit from barriers will fight intensely to preserve their advantage seeking protection from competition have plenty of spurious argu ments at their disposal In the short run, the best antidote to these arguments will be a sustained recovery of the world economy. www.heritage.org /research/EnergyandEnvironment/bg297.cfm   (2566 words)

Chapter 9 Arguments for and against Protection Another argument in favor of protection is assistance to industries that are declining because of rising import competition. The infant industry argument states that a country can benefit by shielding an industry (the infant) that is currently uncompetitive against foreign rivals, if that industry can lower its costs over time and become competitive in the future. It is potentially a valid argument for the government to do something to assist the infant industry, because the future benefits can be larger than the current costs of doing so. www.wright.edu /~tran.dung/Chapter9_Pugel.htm   (2999 words)

Protectionism This argument is totally fallacious, and is one of the most deceitful ever advanced in support of protection in the U.S. Problems: A close examination of this argument reveals many problems. The IIA argument was first initiated by Alexander Hamilton, the first secretary of the Treasury of the US. IIA argument does not apply to most industries in a developed nation such as the US. www.econ.iastate.edu /classes/econ355/choi/prot.htm   (3182 words)

[No title]   (Site not responding. Last check: 2007-10-29) The counter arguments are that; capital is raised locally, little profits are reinvested, and tax avoiding transfers policies are conducted by multi-national firms. Infant Industry versus Export Orientation Chapter 13: resource Korea used both the Infant Industry technique and then followed it by an outward looking export-oriented strategy. What are the essential ingredients in the infant industry argument to insure that gains are available in short-run What policies must be in place to insure an export oriented policy both at home and in the developed countries. www.sfu.ca /~devoretz/lec16.txt   (341 words)

infant industry argument   (Site not responding. Last check: 2007-10-29) It is therefore not at all improbable that in many infants who die in convulsions the real cause of death... Infanticide is the practice of intentionally causing the death of an infant. One frequent method of infanticide in antiquity was simply to abandon the infant, leaving it to death by exposure. www.solutionsellinggroup.com /infant-industry-argument.html   (343 words)

[No title]   (Site not responding. Last check: 2007-10-29) The main arguments for industrialisation based on the dualistic hypothesis are as follows: Agriculture provides a source of supply of labour to industry since the MPL in agriculture is low or zero. Infant Industry Argument The main argument here is that certain industries in developing countries may not be able to withstand import competition in the short run but they may be capable of doing so given time to develop. The second argument may be valid, but the first argument may be fallacious as economies of scale need not be time bound; sufficiently large-scale plants, which yield scale economies, can be set up without a lapse of time. www.lancs.ac.uk /people/ecavnb/bham7.doc   (2102 words)

What Did Frederick List Actually Say? Some Clarifications On The Infant Industry Argument In fact, he emphasizes the importance of trade and envisages free trade as an ultimate aim of all nations; he regards protection as an instrument for achieving development, massive export expansion and ultimately free trade. He is aware of the limitation of size for infant industry protection but claims that in most cases this obstacle could be overcome through collaboration with other countries. The infant industry argument is not only still valid, if properly applied, but, in fact, it is at present ever more relevant owing to recent technological revolution and changes in the organization of production. ideas.repec.org /p/unc/dispap/149.html   (528 words)

[No title] There were “wrong” theories, such as the infant industry argument, the “big push” theory, and Latin American structuralism, not to speak of various Marxian theories. Indeed, the first systematic arguments for infant industry were developed by American thinkers like Alexander Hamilton and Daniel Raymond, while Friedrich List, the supposed intellectual father of infant industry protection argument, first learned about the argument during his exile in the USA during the 1820s. The third possible objection to my argument, which particularly concerns the issue of institutional development, is that the “world standard” in institutions has risen over the last century or so, and therefore that the current developing countries should not consider the NDCs of 100, 150 years ago as their models. www.worldbank.org /research/inequality/June18Papers/KAL-Summary%20Paper.doc   (8656 words)

Mises Economics Blog: The Infant Industry Argument Posted by: Horatio at January 2, 2005 07:02 AM The infant industry argument relies upon the empirical claim that historically many countries industrialised behind tariff barriers. Those industries may be reborn in the nations they were destroyed in (or bought out) but they will only survive if (A) continues free trade or under protectionist policies from their own government. The only industries which are flourishing in the shadows are the ones which have been banished there by legal persecution, such as marijuana cultivation. blog.mises.org /blog/archives/002908.asp   (5750 words)

Buchanan on the history of U.S. protectionism "The intrinsic soundness of the argument for protection to young industries therefore may not be touched by the conclusions drawn from the history of its trial in the United States, which shows only that the intentional protection of the tariffs of 1816, 1824, and 1828 had little effect," Taussig said. In practice, so-called infant industries never grow competitive behind trade barriers, but, instead, remain perpetually underdeveloped, thus requiring protection to be extended indefinitely. Nearly every industrial tariff was first imposed as an infant-industry tariff under the promise that in a few years, when the industry had grown sufficiently to face foreign competition, it would be removed. www.freetrade.org /node/444/print   (1781 words)

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