Fashions change. From the miniskirt we moved to the drape dress. From obligatory neckties we now have cool-biz. And whatever happened to those loose socks?
Ditto for loose economic theories. My economics education began back in the days when protectionist polices were the norm. After all had not Germany and the United States relied heavily on such policies to create their industrial empires? And was not Japan already booming ahead because it protected its industries? The rationale then was as valid as it is now: Certain industries crucial to the industrial base should be protected to create the foundation for further industrial progress.
But somewhere along the line they discovered some industries were getting protection they did not deserve. Ugly trade wars were also breaking out. So a new generation of economists emerged armed with blackboards and diagrams that proved the universal merits of free trade. Only newly emerging industries — "infant industries" — could qualify for protection, we were told, grudgingly.
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