Protectionism

"Protectionist" redirects here. For other uses, see Protectionist (disambiguation).

Political poster by the British Liberal Party presenting their view of the differences between an economy based on free trade versus one based on protectionism. The free trade shop is shown as full of customers due to its low prices. The shop based on protectionism shows higher prices, a lesser selection of goods, and a lack of customers. Animosity between the "protected" business owner and the regulator is also depicted.
Anti-free trade postcard from 1910
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Protectionism, sometimes referred to as trade protectionism, is the economic policy of restricting imports from other countries through methods such as tariffs on imported goods, import quotas, and a variety of other government regulations. Proponents argue that protectionist policies shield the producers, businesses, and workers of the import-competing sector in the country from foreign competitors and raise government revenue. Opponents argue that protectionist policies reduce trade, and adversely affect consumers in general (by raising the cost of imported goods) as well as the producers and workers in export sectors, both in the country implementing protectionist policies and in the countries against which the protections are implemented.[1]

Protectionism has been advocated mainly by parties that hold economic nationalist[a] positions, while economically liberal[b] political parties generally support free trade.[2][3][4][5][6]

There is a consensus among economists that protectionism has a negative effect on economic growth and economic welfare,[7][8][9][10] while free trade and the reduction of trade barriers have a significantly positive effect on economic growth.[8][11][12][13][14][15] Some scholars, such as Douglas Irwin, have implicated protectionism as the cause of some economic crises, most notably the Great Depression.[16] On the contrary, Paul Krugman, winner of the Nobel Prize for Economics, argues that tariffs had no negative impact during the Great Depression.[17] Although trade liberalization can sometimes result in large and unequally distributed losses and gains, and can, in the short run, cause significant economic dislocation of workers in import-competing sectors,[18][19] free trade often lowers the costs of goods and services for both producers and consumers.[20]

  1. ^ Piketty, Thomas (19 April 2022). A Brief History of Equality. Belknap Press. Retrieved 5 January 2024.
  2. ^ Murschetz, Paul (2013). State Aid for Newspapers: Theories, Cases, Actions. Springer Science+Business Media. p. 64. ISBN 978-3-642-35690-2. Parties of the left in government adopt protectionist policies for ideological reasons and because they wish to save worker jobs. Conversely, right-wing parties are predisposed toward free trade policies.
  3. ^ Peláez, Carlos (2008). Globalization and the State: Volume II: Trade Agreements, Inequality, the Environment, Financial Globalization, International Law and Vulnerabilities. United States: Palgrave MacMillan. p. 68. ISBN 978-0-230-20531-4. Left-wing parties tend to support more protectionist policies than right-wing parties.
  4. ^ Mansfield, Edward (2012). Votes, Vetoes, and the Political Economy of International Trade Agreements. Princeton University Press. p. 128. ISBN 978-0-691-13530-4. Left-wing governments are considered more likely than others to intervene in the economy and to enact protectionist trade policies.
  5. ^ Warren, Kenneth (2008). Encyclopedia of U.S. Campaigns, Elections, and Electoral Behavior: A–M, Volume 1. Sage. p. 680. ISBN 978-1-4129-5489-1. Yet, certain national interests, regional trading blocks, and left-wing anti-globalization forces still favor protectionist practices, making protectionism a continuing issue for both American political parties.
  6. ^ "The End of Reaganism". POLITICO Magazine. Retrieved 24 March 2017.
  7. ^ Fairbrother, Malcolm (1 March 2014). "Economists, Capitalists, and the Making of Globalization: North American Free Trade in Comparative-Historical Perspective". American Journal of Sociology. 119 (5): 1324–1379. doi:10.1086/675410. ISSN 0002-9602. PMID 25097930. S2CID 38027389.
  8. ^ a b Mankiw, N. Gregory (24 April 2015). "Economists Actually Agree on This: The Wisdom of Free Trade" Archived 14 May 2019 at the Wayback Machine. The New York Times. Retrieved 10 August 2021. "Economists are famous for disagreeing with one another.... But economists reach near unanimity on some topics, including international trade."
  9. ^ "Economic Consensus On Free Trade". PIIE. 25 May 2017. Retrieved 27 February 2018.
  10. ^ Poole, William (2004). "Free Trade: Why Are Economists and Noneconomists So Far Apart?". Review. 86 (5). doi:10.20955/r.86.1-6.
  11. ^ Cite error: The named reference See P 1994 was invoked but never defined (see the help page).
  12. ^ "Free Trade". IGM Forum. 13 March 2012. Retrieved 24 June 2017.
  13. ^ "Import Duties". IGM Forum. 4 October 2016. Retrieved 24 June 2017.
  14. ^ "Trade Within Europe". IGM Forum. Retrieved 24 June 2017.
  15. ^ Poole, William (September/October 2004). "Free Trade: Why Are Economists and Noneconomists So Far Apart" Archived 7 November 2017 at the Wayback Machine. Federal Reserve Bank of St. Louis Review. 86 (5): pp. 1–6. "... most observers agree that '[t]he consensus among mainstream economists on the desirability of free trade remains almost universal.'" Quote at p. 1.
  16. ^ Irwin, Douglas (2017). Peddling Protectionism: Smoot-Hawley and the Great Depression. Princeton University Press. pp. vii–xviii. ISBN 978-1-4008-8842-9.
  17. ^ https://krugman.blogs.nytimes.com/2016/03/04/the-mitt-hawley-fallacy/
  18. ^ Poole, William (2004). "Free Trade: Why Are Economists and Noneconomists So Far Apart?". Review. 86 (5). doi:10.20955/r.86.1-6. One set of reservations concerns distributional effects of trade. Workers are not seen as benefiting from trade. Strong evidence exists indicating a perception that the benefits of trade flow to businesses and the wealthy, rather than to workers, and to those abroad rather than to those in the United States.
  19. ^ Xiong, Ping (2012b). "Patents in TRIPS-Plus Provisions and the Approaches to Interpretation of Free Trade Agreements and TRIPS: Do They Affect Public Health?". Journal of World Trade. 46 (1): 155. doi:10.54648/TRAD2012006.
  20. ^ Rosenfeld, Everett (11 March 2016). "Here's why everyone is arguing about free trade". CNBC. Retrieved 10 August 2021.


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