Protectionism: What is there to fear?

Protectionism: What is there to fear?

18th March 2009, Comments 0 comments

"Another fine global mess you've got me into, Stan." Brussels-based John Sheridan explores the new political buzzword and its ramifications.

Here we go again. At this stage I think we are all aware that the rapid globalisation of the world, its finances and lack of control thereof, is to blame for the current crisis we are in. What are we to do?

Well, our politicians are telling us we need to spend more and that stimulus packages are needed. The Oxford English dictionary’s definition of stimulus is “something that promotes activity, interest, or enthusiasm”. Sounds like word-play and fanfare with nothing solid to back it up. Remind me again why the economy is in crisis? Oh yes, too much activity, too much interest and too much enthusiasm.

Let’s build more infrastructure is the solution, we are told. They don’t even bother to tell us we need better roads and bridges. All they say is “build them!” Of course, with these better roads and bridges, we will need more cars to drive on these roads, that sorts Detroit out. Let’s build more hospitals. Our patients need better care, and beds are always a problem - only in countries that have followed American and British health management, where the system is in such dire trouble. Does anyone else see a pattern emerging here?

Exactly what is this stimulus going to be built on? If we don’t have the money to sustain what we already have, how do we afford more? Oh, yes, continue what we were doing and we will figure out how to pay for it later.  Most of all we need to start lending money again and instilling confidence in our markets, we are told. But what will be different this time? Who is going to get these loans? Will it be the giant conglomerates that were mainly to blame for the current crisis, or will we finally face up to the fact that bigger does not always mean better?  If we allow this to be our way forward all we are doing is opening up the casino again. Even the worst gambling addicts run out of money some day, not so our politicians it seems.

Can someone please tell me how this thinking is really any different from Bernie Madoff”s theory of economic planning? A plan I would like to remind you that landed him in jail and rightly so. If Madoff had the ability to print more money to pay his investors, his scam would never have come to light. Let’s not forget that Britain’s Chancellor Darling and Mervyn King, Governor of the Bank of England, were apparently discussing this as a possibility last week.

Now the first thing to do is scare everyone senseless about protectionism policies. Whatever we do, we need to keep everything on a global level, are the words coming from American and British officials. Thankfully Sarkozy and Merkel are putting a spanner in the works and actually questioning the effectiveness of these stimulus packages before more money is thrown on the card table.

Every country in the world practices protectionist policies when it comes to the migration of people. We don’t call this protectionism though, we call it visa control, allowing people to move and work in foreign countries if they have the skills required by that nation. So I presume people agree that these protectionist policies are needed and most welcome. If public opinion is to be believed we want tighter controls in the western world.

Globalisation did not work and, sad as it is, the financial problems in the world cannot be solved globally. Firstly, every government needs to look at their own economy individually and see where they can improve it. “Genius” is said to be “the ability to simplify complicated problems, to make them easier to look at”. By reducing the world’s economic crisis to each country’s own economic problems, we will be simplifying the situation. Is there a connection to be made?

Protectionism will not stop international trade as our politicians would have us believe. It will not mean the end of the EU. What it will do is take away some of the control that multi-national companies have. It will also put the power back in the hands of our elected officials. It will give countries the ability to decide with whom they want to do business. Protectionism should not be feared - it should be explored to see what parts can be used to get us out of a globalised mess.

John Sheridan

Freelance writer based in Brussels

Expatica 2009

0 Comments To This Article