There are far more protections of once-infant and now-dominant industries in the United States than regulations designed to protect American infant industries, if any really exist. The U.S. Congress has a long and inconsistent history of infant industry stances. It has been historically very difficult to remove any protections from a mature industry that, on its merit, has no more need of it. The notable modern American infant industry protection was the Communications Decency Act of 1996, for which the argument was made that Internet service providers in the United States needed protection from cheap foreigners.

Types of Protectionist Policies

There are many possible forms of infant industry protections, all of which are designed to raise the cost of buying foreign goods and increase the profits of politically connected domestic industries.

Common forms include tariffs, which raise the direct cost (through a tax) of non-domestic goods. There are also quotas, which set a maximum limit on the amount of foreign goods that may be imported. Voluntary export constraints are self-imposed and designed to be reciprocal, but they work in a similar fashion to quotas.

Infant Industry Protections in the United States

It was once common to believe that American and German economic development in the 19th century resulted in part from infant industry protections. More recent analysis – along with the notable 20th century failures of similar policies in Singapore, Hong Kong, India, Malaysia and Indonesia – suggests that most infant industry policies hurt domestic consumers more than they help domestic businesses.

The United States had protective tariffs as far back as the 1780s, when Alexander Hamilton and his contemporaries wanted to shield small American companies from British, French, Spanish and Dutch competition. In fact, the protections for the textile industry have continued uninterrupted since 1789, making that industry the oldest infant in the world.

Other protections have been extended to steel, oil, agriculture, airlines and other industries. In almost every case, large businesses go rent seeking to keep their privileges long after they have been proven viable.

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