Protectionism - why not?

[Jet Setter]

Protectionism can only lead to inefficiency. Better for the UK to work out what they do best and throw resources and training at them. Protectionism under communism provided such gems as Lada cars. The only problem is trying to work out how to stop countries like France and the US from pandering to lobby groups and propping up their inefficient farmers.

If industries can't compete they should fall by the wayside.

[DieScum]

Well things would be more expensive, like food and clothes and general consumer goods, so everyone would be worse off.

Thinks it's better to trade and be better off.

[sasguru]

Looking at the broader picture, there is no reason why the West should always be rich. Its in the nature of history that rich countries become poor and poor ones become rich, depending on what they do well or badly.
Trying to protect youself is really saying we can't compete with your quality. It doesn't work I'm afraid.

Compare a Hyundai with a Citroen and you will see the difference in quality. The Korean car is much better, more affordable and a better buying proposition.

The West needs to up its game.

[mace]

It's been tried and each time failed

Argentina was as rich as the United States in the early 20th century. Country's demise occurred due to crash in demand for beef in the 1930s (short term problem) leading to their government deciding to introduce protectionism to their markets.

India is also a great example of a country which has done a heck of a lot better since removing protectionist tariffs.

What we should be doing is goading other countries in to introducing protectionist tariffs rather than introducing them ourselves. Also dropping communist propaganda leaflets on developing countries would be a great idea.

[expat]

Protectionism can only lead to inefficiency. Better for the UK to work out what they do best and throw resources and training at them. Protectionism under communism provided such gems as Lada cars. The only problem is trying to work out how to stop countries like France and the US from pandering to lobby groups and propping up their inefficient farmers.

If industries can't compete they should fall by the wayside.

There is a logical flaw in your fear of other countries' protectionism: if it is not good for their economies, then we shouldn't fear it, because it will do them harm. If it is good for their economies, it would be good for ours too so we should do it too.

The only risk is that their protectionism does work for them, but our own dogmatism makes us believe that protectionism doesn't work, so we don't do it, and thereby lose out.

[MrMark]

You know, thinking about it, haven't both China and Japan been big on protectionism? Didn't stop them building up big manufacturing sectors..

[pzz76077]

Protectionism can only lead to inefficiency. Better for the UK to work out what they do best and throw resources and training at them. Protectionism under communism provided such gems as Lada cars. The only problem is trying to work out how to stop countries like France and the US from pandering to lobby groups and propping up their inefficient farmers.

If industries can't compete they should fall by the wayside.

Not much hope for IT contracting then?? Unless you relocate to India.....

PZZ

[sasguru]

The only risk is that their protectionism does work for them, but our own dogmatism makes us believe that protectionism doesn't work, so we don't do it, and thereby lose out.

I'm not an out-and-aout free trader by any means, but it's not dogmatism that tells me that protectionism doesn't work. As the OP has pointed out, it's history.

Another factor is the culture of this country which tends towards complacency and laziness. Maybe protectionism might work in a culture like Germany.
Interestingly, East Germany was by far the most succesful country in the old Soviet block - in the 70s its standard of living was comparable to Britain's.

[Not So Wise]

If industries can't compete they should fall by the wayside.

If an industry by it's self cannot compete, sure (generally due to unions forcing wages to high)

But if it cannot compete because of local taxation, regulation, H&S laws (all of which not only raise cost of doing business but also raise cost of living of the workforce, which demands wages increase) then the problem is not the industry made it's self uncompetitive but rather the government did

It's the number one problem with the "global economy", companies and workers are not on equal footing because of the differences between governments, taxation and laws. And in that imbalance it will be the companies that cannot offshore and the local people of the richer country's that lose out. While shareholders of companies that offshore and workers in poorer country's gain

[mace]

Upping our game

Looking at the broader picture, there is no reason why the West should always be rich. Its in the nature of history that rich countries become poor and poor ones become rich, depending on what they do well or badly.
Trying to protect youself is really saying we can't compete with your quality. It doesn't work I'm afraid.

Compare a Hyundai with a Citroen and you will see the difference in quality. The Korean car is much better, more affordable and a better buying proposition.

The West needs to up its game.

That would be incredibly difficult to do. We're currently a lot more productive than India and China per head. We just happen to be not as much more productive as they are cheap. Since India and China have embraced the same capitalist, free market ideas as we have, nothing short of a miracle will prevent China becoming the world's largest economy in the next 30 years only for it to then lose it's crown to India (as India's population continues to grow whilst China's 1 child policy will cause it to shrink). Indians & Chinese are becoming better educated so their relative productivity will improve. It's unlikely, however, that the average income of a person in either of those countries will approach our average income in the next 100 years. I don't see that there's much we can do about these things. We live in a world of rapid communications which means that even if we continually innovate, other countries can quickly adopt and improve those ideas.