Hacker News new | ask | show | jobs
by dragonwriter 2177 days ago
> 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.

1 comments

Politicians have always befuddled economists.

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.