| Chapter 15 Outline |
| V. THE CASE FOR PROTECTION |
| A. Infant Industry |
| 1. Some argue that initially a new industry may be unable to compete with corresponding mature industries in other countries and should be protected. |
| 2. This view is not particularly relevant for mature industrial economies like the United States. |
B. National Defense
| 1. Some argue that industries producing goods vital to national security should be protected. |
C. Save American Jobs
| 1. Some argue that some form of protection should be maintained because foreign competition can reduce employment in import-competing industries. |
| 2. The solution to unemployment in import-competing industries is pursuing
policies that will provide for full employment and policies that will help those
workers who become structurally unemployed. |
D. Cheap Foreign Labor
| 1. Some argue that some form of protection should be maintained because high wages in the United States keep many industries from being competitive in world markets. |
| 2. If wages are high because productivity is high (as in the United States), then high wages do not necessarily imply high costs. |
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