Can someone (perhaps and ex-protectionist) please tell me what draws people towards protectionist economic policy? it baffles me how some, otherwise supposed free market advocates could pull a u-turn on this one issue.
Isn’t it obvious? Wealth is seen as a finite amount that either we have or China has. They see the positive effects of protectionism, but not the hidden downsides, and conclude that it’s a net positive. It’s the same logic that’s behind unions, government health care and every other “free lunch” scheme. They think when you enforce something through the government it doesn’t come at a cost.
Many people just don’t know economics. Even mainstream economists argue that protectionism is bad(Ricardo and comparative advantage). Basicly if you want to argue about issue, it will most likely be you keeping a lecture on economics to the listener.
I think even among people who do have a fairly good grasp of economics, protectionism appeals to them because of nationalist sentiments. This could be either pride in the country itself, or the belief that we can’t become too dependent on a country that we may end up fighting.
To demonstrate the pride issue, imagine you give 2 scenarios to people: 1) China’s GDP grows at 10% and America’s GDP grows at 5% 2) China’s GDP doesn’t grow and America’s GDP grows at 3%. I think most people would choose scenario 2 simply as a matter of national pride even though both countries are worse off in the second scenario.
Not growing too dependent on a country we may go to war with is pretty self explanatory (I’m not saying it’s right though). So if the US sucks at producing steel and we have to import it from those horrible Chinese, we should put tariffs on steel to ensure we have a steel industry in case we go to war (again, not my belief, but that’s what some people think… also I’m just using this as an example; I don’t know if the US actually imports steel from China or not).
So you mean that free trade would force us to negotiate peacefully before going to war? SHOOT.
But how do they respond to standard hazlitt style responses?
I think people usually say that Ricardo’s law only holds good when capital isn’t allowed to cross borders. I think people believe that if the means of production moves to another country then they will get poorer -which is true if poor is taken in an objective sense as “lacking a certain quantity of goods” but not in a subjective sense as “being the best choice I could’ve chosen”.
it all just seems to be a zero sum falacy, he got my job, therefore there is one less job, ignoring the increase in productivity that will allow for him to be hired somewhere else.