Is protectionism really as bad as people suggest?
As the worldwide economy continues to head downwards we are seeing more and more signs of protectionism around the world as governments look inwards to protect trade and employment. Gordon Brown has been a particular critic of protectionism even though he has come under significant pressure at home to ensure "British jobs for British workers". So what really is protectionism and is it really as bad as people suggest?
Protectionism is simply a system which effectively secures employment and trade for constituents of a particular market. For example, the American government recently introduced a protectionism clause into various rescue packages which effectively meant that businesses had to "buy American" in order to assist the US economy. In the short term there will be a benefit to US employment figures and US internal trade but in the longer term there are possible harmful implications.
If all countries were to introduce protectionism for their own markets we would see a collapse in world trade and countries such as America, Japan, China and the UK for example would suffer a collapse in exports. We did see protectionism back in the 1930s when the depression began in America and spread around the world and indeed this severely hampered the eventual recovery of the worldwide economy.
Share this..
Related stories
Discipline of saving 'important'
It has been claimed that more people need to get into the habit of saving money for their future, particularly now that the credit crunch is beginning to take effect.Colin Jackson, director of Baronworth Investment Services, has pointed out that the slowdown in the financial sector is going to make it more difficult for people to access credit in the future and this means savings will come in hand...
Read MoreDebt culture 'forcing mothers into work'
High levels of debt in British society mean millions of UK households need two salaries to stay financially afloat, a survey has claimed.Scottish Widows' research claims that 44 per cent of households require at least two salaries while of the 7.1 million households with dependent children, 3.5 million need two salaries.The bank's study links this need to a lack of savings, claiming that over half...
Read MoreIs George Bush set to bail out the US car industry?
As the potential effects of yesterday's Congress no vote against a potential multi-billion-dollar rescue package for the US car industry starts to hit home, there is speculation this evening that George Bush is on the verge of announcing an 11th hour deal. He has received serious criticism in the US financial press where many people blame him for the current situation in the US car market.
...
Is the UK economy really the worst in the developed world?
As we covered yesterday, the International Monetary Fund (IMF) has issued a suggestion that the US and the UK economies, taking out the oil-producing countries, are the weakest in the world. To put this into perspective, the UK government is expected to borrow 9.5% of GDP in 2009 which is equivalent to £140 billion although this will increase further in 2010 to 11% of GDP equating to borrowings o...
Read MoreWhy do the authorities always attack UK motorists?
With news that a number of UK cities are set to implement an employer parking levy from 2012, which will see employees charged £250 to park in their office car park, it seems that UK motorists are easy prey for the UK authorities. But why do the authorities always attack UK motorists when they require more tax income?
The simple fact is that UK motorists are an easy target and any...