Widespread unemployment change the economic logic of protectionism

The rise of local protectionism in the late s 6Trade between provinces developed considerably after the launch of the reforms in the late s.

Widespread unemployment change the economic logic of protectionism

The focus on job growth is widespread among both conservative if I may use this term liberally and left-leaning economists. Furthermore, if you ask the man on the street what the pressing economic problem of the time is, he will certainly respond, "Jobs.

This finding was reinforced in a poll conducted by the Washington Post in October of In fact, the lack of job creation was one of the major reasons that the GOP achieved such widespread electoral victory in the midterm elections. It is clear that job creation is essential. But where are these jobs to come from?

Free Trade, Protectionism, & the Limits of Economic Analysis - The Imaginative Conservative

The huge stimulus plan of the Obama Administration and the quantitative easing of the Federal Reserve have failed to solve the problem. In fact, with time, these actions will create greater ills than the problem that they were intended to cure.

The reality of high unemployment continues to plague the economy. Therefore, we must look elsewhere for solutions to the unemployment problem. We must ask, what is the correct path to sustained, noninflationary economic growth?

To answer this question, I suggest that we take a step back in time and examine the writings of the early economic thinkers. In doing so, we find that the main concern of these economists was in the production of goods and services.

Widespread unemployment change the economic logic of protectionism

Jean-Baptiste Say makes the case most succinctly, He writes, In a community, city, province, or nation that produces abundantly, and adds every moment to the sum of its product, almost all of the branches of commerce, manufacture, and generally of industry, yield handsome profits, because the demand is great and because there is always a large quantity of products in the market, ready to bid for new productive services.

And vice versa, whenever, by reasons of the blunders of a nation or its government, production is stationary, or does not keep pace with consumption, the demand generally declines, the value of the product is less than the charges of its production; no productive exertion is rewarded; profits and wages decrease; the employment of capital becomes less advantageous and more hazardous; it is consumed piecemeal, not through extravagance, but through necessity, and because the sources of capital have dried up.

The essence of the argument is that an increase in productive capacity will create employment and naturally increase the demand for products in general. Therefore, productive capacity is seen as the foundation for job creation and for the economic well-being that follows.

Say's law had been the foundation of economic growth for decades. Yet, for the past odd years, it has been a point of contention and ridicule among most mainstream economist.

Say's law has been replaced with such economic myths as the Phillip's curve, the stimulation of "aggregate demand," and the specter of deflation. What caused this detrimental change in perception?

All Roads Lead to Keynes As with most of the pitfalls in economic thinking, John Maynard Keynes is the person responsible for sidetracking most of the generally sound logic of the early profession. It is amazing to see that, with all empirical evidence to the contrary, mainstream economists and government policy makers still cling to the timeworn postulates of the General Theory.

The return of trade protectionism - Livemint

Although his tenets have been proven wrong time and time again, Keynes is constantly rejuvenated by the intellectual fountains of youth that occupy our institutions of "higher learning. The basic thread that holds together the illusions of Keynesian economics is the so-called refutation of Say's law.

Henry Hazlitt has eloquently disproven this Keynesian myth. His arguments need not be repeated here. A businessman does not spend his day considering how a job is to be created. On the contrary, if he is a successful businessman, he spends his time thinking about those activities that he can engage in to produce a profit.

Once he has determined the profitable activity, he then channels resources to achieve the desired result: It is from this profit motive, this potential increase in productive activity, that jobs are created.

As a developer, I do not hire an employee before I have conceived of a construction activity that will earn me a decent return. I hire an employee when I have a productive need for his services. As Say so clearly understood, it is the productive activity that creates the employment that puts money in people's pockets that can then be used to purchase other products.

The Phillip's Curve The Phillip's curve is another economic myth; it leads to the illusion that jobs can be magically created by simply increasing the price level. It is the economic concept that led to the supposed tradeoff between inflation and jobs that nearly wrecked the US economy in the s.

In fact, the s' economy provides the empirical evidence needed to conclusively prove that the Phillip's curve does not work. I stress the use of empirical evidence because it is the lifeline of the mainstream economist. And it is the mainstream economists that indoctrinate us with these economic myths as we pass through their classrooms.

The application of the Phillip's curve by the Johnson and Nixon administrations so devastated the economy that a new term was coined to identify the hitherto unknown condition of high inflation and a stagnant economy: Hazlitt has proven the historical lack of empirical evidence to support the myth of the Phillip's curve.

Once again, there is no reason to repeat his findings.

And logic defies how an action that is designed to bring about an inflationary environment can create a job. As prices increase and public expectations are factored in, we find the economy in an inflationary environment with stagnant job growth.

Productive capacity is diminished because entrepreneurs — those individuals whose actions actually create jobs — are uncertain about the future.Chapter 2 The Dynamic Environment of International Trade Questions: 1.

Define the following terms: GATT IMF Balance of payments nontariff barriers Balance of trade voluntary export restraint Current account protectionism Tariff WTO 2.

Discuss the globalization of the US Economy 3. A guaranteed income isn’t the solution to widespread unemployment In a recent article for Public Discourse, Dylan Pahman, a research fellow at Acton, examines the ineffectiveness of trade protectionism and universal income guarantees.

During the s, UK unemployment was double the pre level and also higher than in all the other major economic powers.

Conclusion

On average, each year between and , almost 10 per cent of the UK insured workforce was unemployed. Populist economics has rarely had it so good. The U.S. economy is roaring, the stock market is soaring, and U.S.

President Donald Trump administration’s protectionism has apparently had a. Upward mobility declines sharply as the rich make off with the growth. an interesting academic research paper was released by the National Bureau of Economic Research There is a widespread view that rising income inequality mostly owes to booming wages at the top end, i.e., a rise of the “working rich.”.

Below is an essay on "Does Widespread Unemployment Change The Economic l" from Anti Essays, your source for research papers, essays, and term paper examples. Protectionism is based on world trade; countries will protect its markets from foreign companies diluting the home countries markets with unwanted goods by inducing .

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