Protectionism Vs Free Trade (Historically)

[Kidlicious]

Originally posted by paiktis22
There are many cases in many many countries where this is the case. Where you simply "harvest" the dynamism of self interest but don't let it rule you or your country. Or at least that's what sought and in many cases accomplished. However this is only the very very beggining IMO.

In the case of globalization you have to let self-interest rule. That's the only way you can make your workers work for that lower wage that allows you to compete in the global market place. Look all over the world. Workers are losing their jobs, wages and benefits in the name of global competativeness.

[Bereta_Eder]

Globalization was just a try to push an unregulated free markets policy everywhere on the planet. However nothing is written in stone so to speak. And many unexpected winners emerge from this and some rather unexpected losers. But as I said nothing is written in stone. We'll see.

[Kidlicious]

Originally posted by paiktis22
Globalization is just a try to push an unregulated free markets policy everywhere on the planet. However nothing is written in stone so to speak. And many unexpected winners emerge from this and some rather unexpected losers. But as I said nothing is written in stone. We'll see.

Labor in this country has worked hard to get where we are now. Globalization will eventually destroy all of that. There is no labor regulation for us in the global market place. We simply have to compete with the lowest bidder.

[Ned]

American industry really took off with the election of the Republican party in 1861. A lot of this had to do with the factories that were built to supply war production. But it also had a lot to do with the building of the intercontinental RR and of the spreading the telegraph virtually everywhere. I am unfamiliar with the tarriffs imposed by the Republican administration at that time. But I my gut reaction to tarriffs is that they always cause more harm to the economy as a whole than the particular beneficiaries of the tarriffs.

Since WWII, both American political parties seem to share the opinion that free trade leads to prosperity. But, as others have observed here, the US at that time was the predominate industrial power in the world - again due to war production and investments.

[Whoha]

I think tarrifs were lower then under the Jackson administration at that point, but Lincoln believed in tarrifs.

[Ramo]

The tariffs in the initial part of the Jackson administration (the "tariffs of abominations")/latter part of the JQ Adams administration didn't actually have broad political support. Jackson actually introduced the law during JQ Adam's presidency, to tank his political career (which was quite successful - look at how he's still commonly thought of as one of our worst Presidents). Basically they were designed to pressure him into either alienating his already shaky constitutency in the North or royally pissing off the South (and it almost lead to Civil War). Those tariff rates didn't last more than a few years.

Lincoln was a definitely a tariff man. The Morrill Tariff passed shortly after the initial round of secession raised duties it to extremely high rates.

[VetLegion]

AFAIK, tariffs in USA were raised during the American Civil War for the purpose of raising money for the war.

First act of the Congress was to raise taxes also for the purpose of funding the government.

Everything in between that first tariff and ACW, and afterwards, was for the purpose of protecting domestic industries. Also, the trend during the whole period was to increase tariffs, with some shorter periods of decreasing them.

USA came out of WW II with 35% of all production power (correct phrase?) in the world (Kissinger). That strong position contributed to the free trade attitude USA adopted and is pursuing since then (with minor bumps).



So, following the example of Britain, USA, Germany and other industrial countries, it seems it would make sense for developing countries to practice a significant protection of their domestic markets.

However, this is not happening. How come?

Another interesting thing is that WTO, an organization solely dedicated to lowering the international barriers for trade, is a voluntary organization. Countries are not forced to join. Yet almost all countries in the world are members. Why are the countries that struggle with their weak industries opening to the world?

Also, a good point raised in this thread is how long is this all going to last. WTO rules still don't include any regulation of labour standards or ecology and that means countries without those are competing unfairly.

[The Andy-Man]

in the long term a nation can only benefit from total free-trade, because it creates cheeper, higher quality goods and weens out the inefficiant buisnesses in the country. It also makes the ones that survive inmitially much more competative overseas.