Protectionism

In my previous post I talked about economic protectionism in very broad terms, rather than the common definition (protecting a some domestic industry from foreign competition). But in a broad sense any kind of policy that protects certain agents from the full effect of market forces can be seen as a form of protectionism. This would include policies like setting a minimum wage.

If we took an even broader view, any regulation of the market can be conceived as some form of protectionism as it will usually result in protection for some agents. Assuming that markets need rules to function (i.e. that they are “not self-creating, self-stabilising, self-regulating or self-legitimising”), then the main issue then becomes – what rules?

Conventional party lines were formed as follows: right-wing parties advocated for rules that tipped the balance in favour of the owners of capital, left-wing parties campaigned for rules that tipped the balance in favour of workers. Now, a new battlefront has formed between rules that prioritise domestic interests and rules that prioritise free trade and globalisation.

It’s difficult to see where the old and new battlefronts cross, but you could make the argument that with more resources and wealth, owners of capital (in many cases, corporations) side with globalisation (given they operate in markets that have already transcended national borders), while only some workers would benefit from a globalised labour market (i.e. not everyone has skills to offer to the global market) and in any case several factors limit individual mobility including:

  • visa and immigration laws (in general, while markets have transcended national borders, citizenship has not and you could even argue, has become more exclusive),
  • issues of social and cultural-fit, in addition to economic opportunity, and
  • the personal cost of moving to a different country.
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