Word: protectionist
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...fact. Certainly, full-blown protectionism would inflict great harm on the American economy. But that does not necessarily imply that free trade is the answer. Rather, the United States should discard the obsolete notion that free trade is the best alternative in every case and instead selectively engage in protectionist practices both to force other nations to lower their own trade barriers and to benefit U.S. companies competing in imperfect markets...
...these implications of traditional trade theory simply do not hold true in the real world. It does matter if a nation maintains protectionist barriers against U.S. goods because such barriers hurt the U.S. economy. Admittedly, such trade barriers do not affect the trade balance, as free traders point out, because international flows of capital determine the trade balance and trade barriers do not affect such flows. However, trade barriers do hurt the American economy by denying it the benefits of producing for and competing in an additional market. In particular, such barriers, by limiting the number of goods individual...
...their markets closed to U.S. goods. The goal of such retaliations should be to ensure free trade by forcing other countries to the bargaining table. Admittedly, this is easier said than done. But the United States remains by far the largest economic market in the world, a market that protectionist nations like Japan depend on to a far greater degree than the U.S. depends on their markets. For example, Japan currently sends 30 percent of its exports to the United States while we send only 11 percent of our exports there. At the same time, U.S. exports account...
Reviewing this background, historian Alfred E. Eckes Jr. has lately come up with one of the few intellectual arguments Buchanan has been able to cite. In a 1995 book, Opening America's Market, Eckes argues that the protectionist U.S. grew much faster than free-trade Britain between 1871 and 1913, and that the post-World War II competitive position of the American economy weakened greatly after the 1968-72 period, when a U.S.-led round of sharp tariff cuts went into effect. Some students, though, think Eckes is reading into the statistics a cause-and-effect relationship that...
...overall economy. Unfortunately, the sermonizers have been less than prolific with ideas about how to help the losers. The lead idea is retraining, but it would have to be conducted on a scale difficult to finance at a time of pinched federal budgets. The alternative, however, might be a protectionist spirit that keeps reviving, just as Frankenstein's monster kept coming back in movie sequel after sequel...