Rethinking Trade and Commercial Policy Theories

Rethinking Trade and Commercial Policy Theories

Development Perspectives

P. Sai-wing Ho

This controversial book offers a unique approach to rethinking the trade and development literature and will therefore strongly appeal to researchers, academics, and students of trade and development as well as those involved in the history of economic thought.

Chapter 9: Manoïlesco: Supporting the Expansion of Superior Productive Sectors through Tariffs or Subventions

P. Sai-wing Ho

Subjects: development studies, development economics, economics and finance, development economics, international economics


9. ManoYlesco: Supporting the Expansion of Superior Productive Sectors through Tariffs or Subventions 9.1 INTRODUCTION What has lent coherence to the discussion in the last two chapters is the fact that Hamilton and List are both regarded in the economics mainstream as central figures in formulating and popularising the infant-industry argument for tariff protection. Yet, careful re-examination of their works indicates that their visions for development promotion are much broader than what the standard mainstream version of the infant-industry argument would convey. Besides, they both offered policy proposals that are much more sophisticated and thoughtful than merely tariff protection. At first sight, the works of Mihail Mano'ilesco 1 pose some challenges to maintaining this coherence. The chief reason is that in the economics mainstream he is often not associated with the infant-industry, although he is credited with another, argument for tariff protection. Specifically, that argument is variously labelled as 'imperfections in the labour market' (Gomes 1990, p. 88) or 'different wages for identical labor' (Bhagwati, Panagariya and Srinivasan 1998, p. 323).2 Having attached that label to his argument, the next step - and here one finds consistency with the mainstream treatment of Hamilton and List - is to portray Manoilesco as someone who knew no better than advocating tariffs to correct the 'market distortion' that he had laid his finger on. Thus, in Haberler's opinion, 'Manoilesco tries to base an argument for tariffs upon the existence of permanent differences in wages between different industries and employments, which are due,...

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