Economics Volume II: Modern Economic ProblemsFetter, Frank A. (Frank Albert)
General
Economics Volume II: Modern Economic Problems
Fetter, Frank A. (Frank Albert)
Economics
§ 4. #The infant-industry argument.# Most free-trade writers concede a
limited validity to the claim that protection may be used to encourage
infant industries and thus diversify the industries of the country. If
the natural resources of a land are adapted to an industry, it may be
called into being earlier by a fostering protective tariff. This is
merely anticipating and hastening the natural order of progress. In
the American colonies the manufactures of such goods as iron, cloth,
hats, ships, and furniture sprang up and continued not only without
"protection," but despite numerous harassing trade restrictions made
in the interest of English merchants. Can it be doubted that many
of these industries would have developed and flourished after the
adoption of the Constitution with no other favoring influences than
those of rich resources and of economy in freights? In the Mississippi
Valley since 1880 natural gas, abundant coal, ore, and timber have
made possible a great growth of industries without protection against
the Eastern states. Industries capable of eventual self-support must
in most cases naturally appear in due time. Economic forces will bring
them out. The protective system has often been likened to a hothouse,
anticipating the season by a few weeks and at great cost. The question
is whether the mere possession of the hothouse is a luxury worth the
price, if meantime the products can be got more cheaply by trade.
English manufactures flourished in the nineteenth century because they
were well established, had excellent coal supplies, great stores of
iron ore, and low-paid labor which did not have the opportunity of
better alternatives, as did the American workman. If America had
imported more (it would not have been all) of her iron and coal, the
English mines would have begun to shown signs of exhaustion earlier,
and America's advantage surely would have asserted itself in time. Her
iron manufactures undoubtedly were hastened--they cannot truly be said
to have been created--by the protective tariff.
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