Protectionism?

[Dóchas]

Ok so with all the economic turmoil we are going through at the moment there has been some talk about protectionism in America and now France has been accused of protectionism.

so i have a basic understanding of what it is. when people are encouraged to by products from the country they are living in and not imported products (as they are sometimes cheaper).

What i want to know is, is it really a bad thing? i know in relation to France it is pretty bad because the EU is meant to be one market and if a country starts a policy of protectionism it just doesnt work but the best example is the US. does protectionism not protect the jobs of the workers in the US? so is it therefore a good thing? But then it endangers the jobs of the workers in the countries they have stopped importing from. i can understand why people dont like it but im just not sure why it is a bad thing

any views on this you would like to share? :)

[cyu]

If other nations are using what basically amounts to slave labor, and the employees of your country are forced to compete with that, the important thing to ask is, would that eventually cause conditions in your own country to resemble the slave labor conditions of other countries?

But let's take slave labor out of the question - let's assume all the other countries treat their employees like kings - is there still an argument for protectionism? I would say yes, but maybe not in the traditional sense that protectionism is described.

What I would say is, instead of measuring how wealthy your nation is by how much foreign currency it can gather in its vaults, or how much gold it can gather in its vaults, your nation should be measuring it by how able it is to produce the things your people need.

Your nation should put efforts into being able to grow food, produce medicine, produce transportation, etc. So what if your car makers are simply less able than foreign car makers to make good cars? The answer isn't to abandon your car makers to bankruptcy. Remember, we're measuring our wealth in terms of what we can produce. So, if your own car makers suck, and you want to make your nation wealthier, then you try to improve them. This isn't to say your car makers should produce trillions of cars nobody wants to use - instead, improve the technology, the production process, the research, the factory equipment, the training needed to kick production into gear - even if you don't produce a single car, all that stuff is still valuable. Why? Because if natural or political disasters strike the nations that normally supply you with cars, then you'll have something to fall back on.

[KC]

A good analogy for why protectionism is an absolutely terrible policy during a recession/depression is that of the Great Depression. When the economy started tanking everyone pulled their money out of the banks, exponentially worsening the problem. So protectionism is like that in a sense: countries pull their domestic economies out of the world market, which starts a trade war and causes the economy to free fall.

[Cumannach]

No it causes international trade to free fall. Pro-domestic economic production doesn't have to free fall. We already have protectionism in Europe by the way. especially in Agriculture.

[Iowa656]

Protectionism basically says this;

"This is OURS so you can't have it".

Do I need to explain how it is bad to you?

It doesn't work. The economic problem will be much worse if we just care about our self. A analogy I heard the other day; "If a street of houses on fire represent this economic situation, protectionism is like using your fire extinguisher to put out your flames and ignoring all the others. Then not letting anyone else use it".

Protectionism may sound good for you ie your house isn't on fire any more. But sooner or later you'll realise it only makes it worse, ie flames from next door blowing onto your house, neighbours refusing to help you in future etc.

If every country in the world said "our commodities and jobs are for us only" world trade would collapse, chaos would result. Imagine China saying it was stopping all exports. Not only that but the worst effected countries would be the poorest ones, how is that fair?

Surely you understand that one state/person etc can never solve an global problem themselves?

[Cumannach]

No protectionism is like forcing everybody to buy their own fire extinguisher.

Protectionism would have the effect of making a country less dependent on the global capitalist system. But as long as you have capitalists in your country, they will want to be a part of that system, or foreign capitalists will want it for them. Socialist support for protectionist measures should depend on the specific situation, there's no general principle there in my opinion.

And by the way, every relatively developed wealthy industrialized nation became developed and wealthy via protectionism.

[Iowa656]

Okay, so if someone hadn't brought his fire extinguisher would you do anything to help him? Shouldn't you help those that can't help themselves?

You can't just flick a few switches and become self reliable. No single country can EVER be self reliant in modern society. What if you don't have oil, metal, enough labour etc etc?

The question is how successful can "socialism in one country" ever become?
Look at Cuba, because the USA refuses to trade they have a heap of problems. Now, these can be minimised, but until the embargo ends there's going to be problems.

Protectionism only increases your wealth by exploiting others. The current protectionist slogan in the UK is "British jobs for British workers", is that something that should be supported? Protectionism draws a line around your box and rejects all those outside it. If your not in my country then I'll watch you die. I don't understand why you support it.

[cyu]

No protectionism is like forcing everybody to buy their own fire extinguisher.


Actually, traditional protectionism is not allowing anybody else to use their fire extinguishers on your house, because you want to use your own.

Protectionism is not "forcing" everybody to buy their own fire extinguisher, because often it's the people in those nations that are volunteering to be the fire extinguishers.

Protectionism is also not ignoring every other house that's on fire - it's actually saying we're going to subsidize our own fire extinguishers, so we can extinguish fires in other homes better than anyone else. (Or alternatively, we're going to make it so expensive for the fire fighters from other houses to operate here, that the people here will use native fire extinguishers instead.)

The anti-protectionist position is that if you're not good at extinguishing fires, you don't deserve to have a fire extinguisher. That's stupid too.

To me, the much more logical position is, even if I suck at extinguishing fires, nobody has the right to tell me whether I'm allowed to have a fire extinguisher or not - and it is also in my own best interest to have a personal extinguisher, even if I usually rely on the local fire department to put out my fires.

[Cumannach]

I agree...I think. Who's fire extinguisher is broke again?;)

If a nation produces it's own products instead of importing them, it is less dependent on the global capitalist system. If a nation has it's own fire-extinguisher industry, it will be safe from fires no matter what the international situation. If it doesn't produce any, it must import them. To import something you have to export something. If the market for your exports suddenly disappears, you'll be left without the means of importing fire-extinguishers and be in trouble.

If protectionism results in a country increasingly building up it's own industries including strategically important ones, like energy production, heavy industries like steel and cement, weaponry, chemicals etc, pharmaceuticals and so on, it makes the 'delinking' of that nation from the capitalist system all the easier and more feasible. Stepping out of the global capitalist system is ultimately a step that must be taken under socialism. Not least because, with the overthrow of the nation's bourgeoisie, all the foreign bourgeoisie attempt immediately to crush socialism, which will mean placing an international embargo on imports and exports from that country. So, the socialists will be in a spot of bother if they can't guarantee their own supply of fire-extinguishers.

Capitalists are ultimately not interested in this balanced development, because their greed requires every market be open to their products, every source of raw materials be open to their purchase, and every labour market be open for their capital. This is in contradiction to the even development of industries throughout all the world's nations.

[Iowa656]

If a nation produces it's own products instead of importing them, it is less dependent on the global capitalist system. If a nation has it's own fire-extinguisher industry, it will be safe from fires no matter what the international situation. If it doesn't produce any, it must import them. To import something you have to export something. If the market for your exports suddenly disappears, you'll be left without the means of importing fire-extinguishers and be in trouble.

If protectionism results in a country increasingly building up it's own industries including strategically important ones, like energy production, heavy industries like steel and cement, weaponry, chemicals etc, pharmaceuticals and so on, it makes the 'delinking' of that nation from the capitalist system all the easier and more feasible. Stepping out of the global capitalist system is ultimately a step that must be taken under socialism. Not least because, with the overthrow of the nation's bourgeoisie, all the foreign bourgeoisie attempt immediately to crush socialism, which will mean placing an international embargo on imports and exports from that country. So, the socialists will be in a spot of bother if they can't guarantee their own supply of fire-extinguishers.

Capitalists are ultimately not interested in this balanced development, because their greed requires every market be open to their products, every source of raw materials be open to their purchase, and every labour market be open for their capital. This is in contradiction to the even development of industries throughout all the world's nations.

But can a nation ever be self reliant?

Does any one nation on earth have ALL the natural resources necessary for long term stable development. Western nations have little fossil fuels left, the can't just remove themselves from the world oil trade over night. Yes self sustainable renewable energy would be ideal, don't think it's not going to take decades to achieve. Nations need to trade with each other. If I have copper and you don't, you have Gold and I don't, then inevitably there's going to be a trade. Trading doesn't have to be capitalist.

What would be more advisable would be to increase trade with the "lefter" nations whilst decreasing trade with the most capitalist ones. Gradually removing yourself from trade with capitalist nations.

The problem I have with protectionism is it's interwoven relationship with nationalism. Protectionist "All our resources go to us", nationalism "We are the best". They go hand in hand. Would a protectionist nation be willing to help other nations in problems? I don't think so. If we were all protectionist, and there was a serious natural disaster in a certain country, would we just expect them to sort themselves out? If all our resources are for only us as a nation, whose going to help those with out resources? Protectionism would be great for the selfish interests of developed nations, but disastrous for the developing ones.

[cyu]

But can a nation ever be self reliant?


No, but it's certainly better to be more self reliant than be a banana republic. Imagine if the only thing your nation produced was bananas - suddenly the world market for bananas fell out from under you (for whatever reason - maybe a new virus killed off all your crop, maybe a new scientific study showed that bananas caused birth defects, maybe a much better replacement for bananas was found) - what will your nation do now? There's an old saying for this: "Don't put all your eggs in one basket."



If I have copper and you don't, you have Gold and I don't, then inevitably there's going to be a trade. Trading doesn't have to be capitalist.


While I agree with the general statement here, I'm going to point out a somewhat irrelevant detail - why are you trading for gold? What are you going to use it for? If it's for electronics or decorations, then fine. If you're just going to put it in a vault, that's stupid.



Protectionist "All our resources go to us"


Where does protectionism say that? I've never heard a self-described protectionist say that. Instead what I hear them say is that they want to protect local jobs.



Would a protectionist nation be willing to help other nations in problems? I don't think so.


Why not? One protectionist policy is the subsidizing of local businesses, so that they can outcompete foreign companies, to the point of outselling foreign companies in those foreign countries - which is one of the complaints those foreign countries often have - they want an even playing field and don't want to have to compete against subsidized businesses in their own country. This is a far cry from what you are describing.

It sounds to me like you don't even know what protectionism is.