Paper on International Economics Essay Example | Topics and Well Written Essays - 1750 words

Paper on International Economics - Essay Example Protectionism, in other words, has survived globalisation and in that survival is both a testimony and concession to the fact that, beyond the globalisation-rhetoric, the state has retained its role as a significant economic player. There is no doubt that globalisation has reduced the role of the state in the economy but, there is equally no doubt that protectionism has survived globalisation and remains one of the more significant of the state's instruments for ensuring the welfare of its domestic market. Following a definition of protectionism and an examination of its pre- and post-globalisation forms and mechanisms, this paper shall argue that despite arguments to the contrary, protectionism often serves fundamental and constructive economic purposes. In general, it is possible to define protectionism as strategies used by a national economy to protect its own goods, industries and businesses from unfair competition or, in some instances, from competition per se. Often criticized by economist and free-trade proponents such as Adam Smith among others, protectionism is not only a logically valid strategy for the protection of domestic economies from such unfair economic competition as could have adverse effects upon infant industries and domestic producers and manufacturers, but it often imposes itself upon decision-makers as the only viable mechanism for the fulfilment of the aforementioned. Indeed, as important as it may be for Lesser Developing and Developing nations, protectionism is as important for Industrialised economies. As Schwartz (2000) succinctly explains, protectionism traditionally functions to protect national economies from all of the virtual destruction of domestic industries, unemployment and inflation (Schwartz, 2000). It does so through the utilisation of a wide array of strategies, ranging from implementation of prohibitions against the entry of certain imports into the domestic economy to the imposition of heavy customs, tariffs and taxes upon specified imports in order to ensure that, upon entry into the domestic market, domestic goods retain a price-competitive edge (Schwartz, 2000). Proceeding from the information presented in the preceding paragraph, it is possible to articulate a definition for protectionism. In brief, protectionism can be defined as a