Quote:
Originally Posted by Kali Yuga
But on a fundamental level, protectionism doesn't work.
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If you believe in the perfect and equal world, then yes, protectionism is a bad idea. But the world is not perfect and there are times when without protectionism there is no chance for a country to develop competitive industries.
Every first world country has achieved the prosperity by some kind of protectionism. And they still practice it in certain industries, for example, agricultural subsidies in the US and EU while developing countries are specifically forbidden to implement such subsidies by IMF and other lenders. It benefits the EU and US but poor African countries are unable to compete in the market with their agricultural products (which are often their only exports) and remain in poverty.
Another example applies to automotive industry which are nurtured and subsidized in almost every country. Only when the industry has become strong, it can participate in the free market and make profit but before that it will not survive.