Passage:
In economic history, the 'infant industry' argument posits that newly established domestic industries require temporary tariff protection to achieve economies of scale and compete against mature foreign rivals. Historically, proponents pointed to nineteenth-century American manufacturing as a primary exemplar: high tariffs enacted during this period coincided with rapid industrial growth and technological innovation. However, recent quantitative re-evaluations by historical economists challenge this causal attribution. By examining sector-specific productivity metrics across protected and unprotected industries, researchers discovered that productivity growth was actually concentrated in non-protected sectors, such as agriculture and transport infrastructure, which benefited from vast domestic market expansion and public land grants rather than trade barriers. Furthermore, in heavily protected manufacturing sectors like textiles and iron, tariffs frequently incentivized capital misallocation toward inefficient production methods, insulating domestic firms from foreign innovation. Proponents of the infant industry model counter that protectionist policy was essential for safeguarding high-wage domestic labor against low-cost European imports, thereby sustaining internal consumer demand. Yet this counterargument overlooks the broader systemic effect: by artificially inflating the prices of intermediate capital goods, tariffs increased input costs for export-oriented sectors, ultimately depressing aggregate domestic purchasing power. Consequently, rather than functioning as the engine of American industrialization, tariff protection appears to have imposed net deadweight losses, with growth occurring largely in spite of, rather than because of, trade barriers.
Which of the following, if true, would most seriously weaken the author's claim regarding the negative impact of tariffs on manufacturing efficiency in nineteenth-century America?
- The advanced, capital-intensive manufacturing technologies adopted by nineteenth-century American textile and iron producers required massive initial capital outlays that domestic firms could secure only when domestic market revenue was guaranteed by tariff protection.Cevap
- BUnprotected sectors such as transport infrastructure and agriculture experienced significantly higher rates of total factor productivity growth than did protected manufacturing sectors throughout the nineteenth century.
- CArtificially high prices for intermediate capital goods forced export-oriented agricultural producers to delay equipment modernization, reducing their overseas competitiveness.
- DEuropean manufacturers routinely lowered export prices on textiles and iron to partially absorb the cost of American tariffs and preserve their market presence in North America.
- ELand grants provided by the federal government to railway companies decreased overall freight charges for both protected manufacturing goods and unprotected agricultural commodities.