And when you subsidize something, you get more of it. What incentives will the failing companies have to strive for profit through faithful service to their customers and for standing on their own feet? This is a question that haunts all protectionism, whether through bailouts or tariffs or subsidies or monopoly privileges. If the purpose is to make a firm or industry strong or able to compete in the market, then protecting it only makes it weaker. One must throw each company out into the “dog-eat-dog” (ha!) competitive environment and through these pressures force it to improve and excel.
Nor is there an analogy from protecting human children and the elderly to protecting “infant” and “senile” industries. If an industry is foreseen to be profitable only after it matures, investors will still put money into it now. The government can’t find out which industries or firms ought to be kept alive and which, aborted. And if an industry is no longer profitable and its prospects are dim, then it deserves to “die.”