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Protectionism is Inevitable

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  • Protectionism is Inevitable

    Or is it? Globalization, as it has been implemented, has become a lowest common denominator game. The backlash of protectionism is brewing in Europe. It will come to America as well. The American Right believes you can create global free markets while eliminating the social safety net. This is a lunatic position.

    Looking at how the United States exited the Great Depression under Franklin Roosevelt offers a lesson. FDR was a champion of free trade, a fact that both modern Democrats and Republicans choose to ignore. He saw trade as a route to both prosperity and peace, as trading partners are unlikely to wage war against each other.

    But advocating for freer global trade was always coupled with social protections for the general population—a minimum wage, unemployment insurance, unions, and more. A bargain was struck with society: Open the country up to the vagaries of the global marketplace and in return, society will receive social protections in case they lose out as a result of global trade.

    This lesson shows that markets don't exist in isolation of a broader social system. Just advocating for markets to operate with no protections for those who lose out is certain to further a protectionist backlash. What is necessary is for the country's political leaders to strike a new bargain with society—a new social contract.
    http://www.hbs.edu/centennial/busine...-contract.html

    The more the Right chips away at the safety net, the more fuel they throw on the protectionist fire.
    Last edited by Rohirrim; 02-12-2014, 03:42 PM.

  • #2
    The road to hell is paved with good intentions. Social protections are great in the short-term until they force businesses to leave the country. A global social safety net that's consistent across all borders is the only way to keep global markets fair. Otherwise, the countries that put more restrictions on their labor market are hampering themselves in a global free market.

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