The Economic Case Against Protectionism

This Center for Freedom and Prosperity Foundation video looks at research that confirms how free trade increases economic growth and benefits consumers. It also explains the theoretical value of trade, in addition to providing real-world comparisons between nations that embraced trade and thrived, and those that suffered thanks to protectionist policies.

[dustymiller]

Even though I am strongly against protectionism and all for free trade in general, there are subtleties to consider.

One, it's only free trade if the other country is buying as much from you as you are from them. If the money is flowing one way and goods the other, that's not free trade.

Two, there is economic, social, and military value in knowing how to make things and in using that knowledge. Systems that have redundancy are more resilient than ones with single points of failure. If you outsource nearly all your manufacturing to one country, what happens if that country has a natural disaster, or its government decides to stop selling to you for whatever reason? You can't just find alternative sources or restart local manufacturing all at once. Factories have been shut down, knowledge and skills have been lost.

Putting all your eggs in one basket is bad policy. If you depend entirely on one person for something critical to your survival, that person owns you. International relations are no different.

Even if we manage to achieve a situation where a miniscule fraction of our population is supporting the entire nation by means of tremendous productivity and the rest of it is living on universal basic income, enabling us to buy all our goods from one country, that's still a dangerous situation. The other country has a well-trained workforce, while you have a population that has no job skills - meaning that they still have you by the neck.

Three, the moral argument. If the government of a country is repressive and totalitarian, why would you contribute to it, financially or otherwise?

Four, if the country receiving your money is investing a disproportionate amount of that money in militarizing itself and has demonstrated that it's intent on using that military in ways that go against your self-interest and the interests of its neighbours, you'd have to be a fool to keep making it stronger.

_Free_ trade with _free_ and _friendly_ countries that hold similar values.

[TomQuiNEstPasLa]

Dan, where'd you get the yellow sportcoat? Loving it!

[iansimcox]

I like it. Only problem is, the economic argument doesn't win elections any more. "They're taking your jobs" is a very powerful argument and most protectionists will, if pushed, say they'd rather a little less growth if it meant keeping jobs. It's a tough one to beat, but it needs beating if free trade is to win the day

[Eline]

wow Dan, are you citing an OECD study to support your argument?