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by dragonwriter
2177 days ago
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> David Ricardo mathematically proved it was a bad thing over 200 years ago. Ricardo’s proof applies to comically simplified conditions which fail to consider a number of factors that exist in real world trade and resulting shifts of specific industries between countries including: (1) potential impacts of current activity on future production possibilities, and (2) strategic impacts of different production patterns and how that effects non-trade international relations, including war. That's not to say it's not an important result that has massive implications for policy, but it is far from proof that protectionism is a bad thing in every case. It does prove that it always comes at a short-term cost, so you'd better have a specific long-term strategy that justified the short-term cost, though. |
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Economists have always befuddled politicians.
Unfortunately, the collision of the two typically leads to the worst of all outcomes without the benefit of any. E.g. Implementing protectionist policies without a low term plan for their withdrawal.