Protectionism vs Globalization

[PurpleRain]

Globalization refers to the global integration of trade and investment (amoung others) from a nation. I see it as a flow of economy throughout the entire international community.

Protectionism is when the government restrains the trade between countries. Restrictive quotas, and discouraging imports. It strengthens the local markets by protecting the local jobs, as well as having benifits on the economy, environment and health (when looking at farming, etc) it leaves me feeling this is sort of selfish in ways. Perhaps other countries need that trade for reasons.

The latter part of the paragraph can also trail off to 'which countries do we trade with?' Do some countries which are both wartorn or support geneoside deserve our money while local jobs are not able to claim it for families?

Now, I am lacking in knowledge in this field; but as far as I can understand, I am neither for both. Each have good ideals, but are harming in some way.

So, freetrade or not and all those areas in between: What do you make of this?

 

[PurpleRain]

Freetrade, because being isolationist will never help your economy in the end.

Though, doesn't protectionism generate more jobs and circulate money within the country?

Globalization. Mainly because if we all work together then we can do amazing things. We could deal poverty and hunger a striking blow. We have the resources to feed more people around the world than we are right now, the problem is the big countries are hogging all of the food and take more than we need.

But the problem I stated above, 'which governments would really help this?' Certain countries with corrupt power would not help poverty and starvation.

 

[ElephantGuts]

A mix of both. Make independent decisions on a case-by-case basis. Allow free trade where it is beneficial, and impose restrictions where necessary.

No one system is overall better than the other. An intelligent mix of the two will provide the best results.

 

[PurpleRain]

Freetrade, because being isolationist will never help your economy in the end.

Though, doesn't protectionism generate more jobs and circulate money within the country?

I have no idea of economics so I'm drawing straws here. But if that's the case than the U.S should probably switch to that at this point.

That's what it's doing, though the government is warning it to stop (I believe). The Canadian government as well as Australian however seem to be switching to "buy local!"

I kind of feel this is now damaging to the rest of the world. A country as large as America has the type of trade that allows other countries to suckle nicely off it I would imagine.

Note: I'm jumping both points as neither to me sound right.

Fair Trade not Free Trade
http://en.wikipedia.org/wiki/Fair_trade

This sounds good, though hard to make out. Care to elaborate on it some more?

 

[Calobi]

Freetrade, because being isolationist will never help your economy in the end.

Though, doesn't protectionism generate more jobs and circulate money within the country?

I have no idea of economics so I'm drawing straws here. But if that's the case than the U.S should probably switch to that at this point.

Except, if I'm right, our currency isn't based one the gold standard anymore. If that's true, then the only way to determine the worth of the Dollar is to compare it to other nations; which, if trading is discouraged, would either inflate its worth (because items cost less to produce locally) or make it worth less (as items would be very expensive to import).

I would suggest the globalization argument, if only because its currently being used and is working somewhat. Japan was isolated for long periods in the past and only really exploded in terms of production and technology by opening their gates. Which is another good thing about it: improvements. If items are only produced in the country, then you tend to lose out on new technologies for a little bit of time.

At least, this is all what I think. I have no expertise in the subject and this is all just what I just thought up about the subject.

 

[sneakypenguin]

Freetrade, because being isolationist will never help your economy in the end.

Though, doesn't protectionism generate more jobs and circulate money within the country?

Thing about protectionism is others reciprocate, if the US says okay protective tarriffs on steel other countries do the same. So we lose imports, we can't export and prices go up because we don't have productive advantages in certain products. Trade allows us to expand our economies much quicker than if we did everything ourselves.

China TV cost 50 bucks to make
America cost 100 (just throwing numbers out)
America produces meds for 2 dollars a pill
china makes it for 6 (just throwing numbers out)

We trade our productive efficiencies for theirs(we make their meds they make our tvs) X many countries with differing products and you expand beyond what you could with isolationism.

so ideally we get more for less and they get more for less.
* theoretically
Also the balance of trade is an issue. (one exporting a LOT more than the other (china))

 

[Horticulture]

It seems to me that there needs to be a balance between free trade and protectionism. While I see free trade as desirable in general, there are certain instances in which protectionism can be valuable.

For countries that wish to build up local industries that can compete globally, it's essential to engage in some measure of protectionism in order to allow these sectors to develop without rigorous competition from more advanced economies. There are also certain industries (utilities, military technology, etc.) that are desirable to operate domestically, even if foreign firms are more efficient. The possibility of the exploitation of developing economies (and the low wages and poor working conditions their workers will often accept) can also be an argument for protectionism. This type of economic dependence, in addition to propagating terrible working conditions, discourages workers in developing economies from pursuing advanced education and training--and those that do have it are likely to leave for greener pastures due to the lack of work offering suitable pay in their field at home (though this does prove a very good deal for those of us fortunate enough to live in wealthy countries.)

At the same time, protectionism generally encourages less-than-optimal employment of resources (from a global perspective) by reducing competitive pressure on protected industries. As we've seen from recent furor over "Buy American" provisions in the recent U.S. stimulus bills, protectionism can also lead to rapidly-escalating trade wars in which multiple countries raise tariffs or restrict trade with one another in an effort to keep their trade partners from profiting at the expense of their domestic industries. In these situations, no one wins-all countries involved in the trade war are worse off than they would have been with free trade.

I suppose that overall, I'm for free trade with exceptions in certain cases. Ideally, I'd like to see all nations prosper without any suffering unduly from being small fish in a big sea. Pragmatically, however, I agree that a rising tide lifts all boats, and worry principally that those riding makeshift rafts might be swept away at the expense of the luxury yachts.

 

[Clashero]

You can go the whole yard and do what our ridiculous, dimwit, brainless president of Argentina, Cristina Kirchner did. She implemented protectionist measures on businesses that don't exist in the country.
I'll explain: Argentina doesn't produce laptops nor cell phones. There is a great demand for these products, but every laptop and cell phone in the country is imported. So, why, pray tell, did she raise taxes so heaviliy on these products? She certainly isn't helping anyone. Oh, wait, she's becoming richer with every cell phone bought. I suppose that's what matters to her.

/angry political rant.

 

[Arcticflame]

Well it doesn't have to be black or white, both with restrictions.

 

[NeutralDrow]

It seems to me that there needs to be a balance between free trade and protectionism. While I see free trade as desirable in general, there are certain instances in which protectionism can be valuable.

For countries that wish to build up local industries that can compete globally, it's essential to engage in some measure of protectionism in order to allow these sectors to develop without rigorous competition from more advanced economies. There are also certain industries (utilities, military technology, etc.) that are desirable to operate domestically, even if foreign firms are more efficient. The possibility of the exploitation of developing economies (and the low wages and poor working conditions their workers will often accept) can also be an argument for protectionism. This type of economic dependence, in addition to propagating terrible working conditions, discourages workers in developing economies from pursuing advanced education and training--and those that do have it are likely to leave for greener pastures due to the lack of work offering suitable pay in their field at home (though this does prove a very good deal for those of us fortunate enough to live in wealthy countries.)

At the same time, protectionism generally encourages less-than-optimal employment of resources (from a global perspective) by reducing competitive pressure on protected industries. As we've seen from recent furor over "Buy American" provisions in the recent U.S. stimulus bills, protectionism can also lead to rapidly-escalating trade wars in which multiple countries raise tariffs or restrict trade with one another in an effort to keep their trade partners from profiting at the expense of their domestic industries. In these situations, no one wins-all countries involved in the trade war are worse off than they would have been with free trade.

I suppose that overall, I'm for free trade with exceptions in certain cases. Ideally, I'd like to see all nations prosper without any suffering unduly from being small fish in a big sea. Pragmatically, however, I agree that a rising tide lifts all boats, and worry principally that those riding makeshift rafts might be swept away at the expense of the luxury yachts.

And here I was going to write a page or two saying pretty much the same thing, but you beat me to it.

Thanks!

 

[Horticulture]

And here I was going to write a page or two saying pretty much the same thing, but you beat me to it.

Thanks!

I should thank you; it warms my heart to know I'm not the only one with a tendency to wordiness

 

[PurpleRain]

I'm generally seeing a support moreso for freetrade if anything. Though I understand protectionism has its merits.

Well it doesn't have to be black or white, both with restrictions.

Oh of course. I would sit in the grey area. Or maybe something as different as blue. Point is, it's still good to hear the discussion from both sides.

 

[Anarchemitis]

Globalization can restrain the ability for a culture to stew in itself, everything eventually becoming one gross mass of monoculture.

 

[PurpleRain]

Globalization can restrain the ability for a culture to stew in itself, everything eventually becoming one gross mass of monoculture.

That's slowly becoming inevitable no matter. That thing called the internet seems to be giving a pretty fair slate for everyone to endulge within people from across the globe. Boarders like this aren't as effected as much by trade.

 

[Labyrinth]

Economically, I'd go for protectionism. Environmentally too. Take the example of fresh food. Australia produces enough of this that we export copious amounts. Meat, wheat and other such things. However, we also import fresh fruit such as kiwifruit from Italy and lemons from the USA. My problem with this is that such things are produced right here and don't require the environmental damage that such vast travel can cause.

 

[Horticulture]

Economically, I'd go for protectionism. Environmentally too. Take the example of fresh food. Australia produces enough of this that we export copious amounts. Meat, wheat and other such things. However, we also import fresh fruit such as kiwifruit from Italy and lemons from the USA. My problem with this is that such things are produced right here and don't require the environmental damage that such vast travel can cause.

What's your opinion on importing food that can be produced locally if it's still cheaper after accounting for the environmental costs (assuming we could do so accurately)?

 

[thiosk]

freetrade is great.

sadly, what we have is managed trade. Any time someone tells you about the excesses of free trade, just remember, what we have is not free.

 

[Labyrinth]

What's your opinion on importing food that can be produced locally if it's still cheaper after accounting for the environmental costs (assuming we could do so accurately)?

My complaint is that it has to be transported, not necessarily that it costs more/less. Local's better.

 

[Knight Templar]

As in all things its about the balance, too much free trade and complete industries could just move shop devestating the old regions economy. However not enough fair and open trade (ie. too much protectionism) and the region becomes more expensive but with a lower standard of living.

If I had to pick one and only one, I'd pick Globalization. Given I live in Australia where our entire economy depends on exporting raw goods (mostly) and importing manufactured goods, its not a good idea to have Protectionism as our objective in trade.

 

[Agayek]

It's been proven time and again that Protectionism hampers the economy.

Every single major (reputable) economist in the last 500 years has supported the idea of free trade between nations.

The basic premise is that protectionism limits the market for your producers which in turn reduces production, and lowers consumption, thus it lowers your GDP. GDP = Consumption + Investment (+ Government + some other crap I don't remember, but I'm 95% sure none of it is relevant). If producers are not consuming resources, then they're most likely going to save it, and it does nothing to help your GDP.

Protectionism actually deepened the Great Depression back in the 30s.