Economics Protectionism Questions
The infant industry argument is an economic theory that supports protectionism. It suggests that new and emerging industries in a country need protection from foreign competition in order to develop and become competitive in the long run. The argument states that these industries are like "infants" that require nurturing and support to grow and become self-sufficient.
Protectionism, in this context, refers to the use of trade barriers such as tariffs, quotas, or subsidies to shield domestic industries from foreign competition. By implementing protectionist measures, the government aims to create a favorable environment for the growth of infant industries.
The rationale behind this argument is that without protection, infant industries may not be able to compete with established foreign industries that benefit from economies of scale, advanced technology, and lower production costs. By protecting these industries, the government provides them with a temporary advantage, allowing them to develop and gain a competitive edge.
Once the infant industries have grown and become competitive, the argument suggests that the protectionist measures can be gradually removed, and the industries can then compete on a level playing field in the global market.
Overall, the infant industry argument supports protectionism by advocating for temporary trade barriers to protect and nurture new industries until they become self-sufficient and competitive.