Abstract
Starting with Adam Smith’s criticism against mercantilism, economists of the classical school generally advocated the free trade and were critical to the protection of domestic industries. J. S. Mill admitted, however, the protection of the so-called infant industry, though he imposes a condition which an industry must satisfy to be protected. Then, it was Bastable who followed Mill to add another necessary condition for protection. This Mill–Bastable infant industry dogma was discussed critically by some modern economists from the point of view of the dynamic theory of the gains from trade.
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Notes
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It is to be noted that, to measure the utility in terms of money, we are here implicitly assuming the constancy of the marginal utility of money. In other words, the demand curve is considered as if it is the marginal utility curve. See Problems 6.1 and 6.2.
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Negishi, T., Negishi, T. (2014). Mill and Infant Industry. In: Developments of International Trade Theory. Advances in Japanese Business and Economics, vol 2. Springer, Tokyo. https://doi.org/10.1007/978-4-431-54433-3_6
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DOI: https://doi.org/10.1007/978-4-431-54433-3_6
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