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Does Mill's case for infant industry protection capture Hamilton's and List's arguments for promoting industrial development?

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  • P. Sai-Wing Ho

Abstract

Mill's case for infant-industry protection is widely regarded as capturing the arguments by Hamilton and List. This paper argues that they are actually analytically different. While all three were influenced by Smith's Wealth of Nations, Mill took from it something different than the other two. His endorsement passage for protection refers to a standalone industry. Hamilton and List attached significance to the pin-making type of division of labor at the economy-level but they emphasized the development of that division as the activation of backward and forward production linkages, � la Hirschman, with increasing diversification and differentiation of occupations and industries. Mill only considered employing customs duties in his passage, although in some personal correspondence in the 1860s he mentioned a subsidy. Contrary to mainstream misrepresentations, Hamilton and List did not restrict themselves to proposing customs duties, but suggested both trade and non-trade interventions to activate linkages. Mill's formulation focuses attention on very simple learning by doing to establish the standalone industry. Thanks to their conception of the development process, Hamilton and List appreciated the complexity of technology acquisitions and devoted far more attention to that subject. The implications of these differences for future research and policy considerations are briefly discussed.

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  • P. Sai-Wing Ho, 2013. "Does Mill's case for infant industry protection capture Hamilton's and List's arguments for promoting industrial development?," Review of Political Economy, Taylor & Francis Journals, vol. 25(4), pages 546-571, October.
  • Handle: RePEc:taf:revpoe:v:25:y:2013:i:4:p:546-571
    DOI: 10.1080/09538259.2013.837323
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    References listed on IDEAS

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    1. P. Sai-wing Ho, 2010. "Rethinking Trade and Commercial Policy Theories," Books, Edward Elgar Publishing, number 2659.
    2. Cimoli, Mario & Dosi, Giovanni & Stiglitz, Joseph E. (ed.), 2009. "Industrial Policy and Development: The Political Economy of Capabilities Accumulation," OUP Catalogue, Oxford University Press, number 9780199235278.
    3. Corden, W. Max., 1997. "Trade Policy and Economic Welfare," OUP Catalogue, Oxford University Press, edition 2, number 9780198775348.
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