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What are 2 benefits and disadvantages of protectionism, with 2 examples of both?Iv been...

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lordtimbob | Student, Undergraduate | eNotes Newbie

Posted May 27, 2010 at 1:50 PM via web

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What are 2 benefits and disadvantages of protectionism, with 2 examples of both?

Iv been stuck on this question for awhile now, thanks :)

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted May 27, 2010 at 2:39 PM (Answer #2)

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The major drawbacks of protectionism are that consumers in your country have to pay higher prices and get lower quality products.  If we had more protectionism, for example, we would not have so much stuff that is made in China.  That means the stuff would be made here by workers getting higher wages.  We would have to pay more for it.

An example of low quality can be seen in how American-made cars used to be low quality because they had no competition.  Then Japan started selling cars here and we got better quality cars.

The main advantage is that American jobs (like the ones of the carmakers) get protected.  Another advantage would be that we would not be dependent on other countries for stuff we need.

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brettd | High School Teacher | (Level 2) Educator Emeritus

Posted May 27, 2010 at 4:15 PM (Answer #3)

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The main form that protectionism takes is in tariff charges on imported goods, making local goods less expensive by comparison, and therefore, more popular.  While this does trend to encourage job growth in your own country, it almost always results in tariff retaliation by the other country.  We call this a trade war.  So the net job savings can easily be nullified because your exports decrease once the other country puts a tariff on your goods.

For example, if we put a $10,000 tariff on all Japanese cars, sales of American cars would likely rise.  But they might then put a tariff on beef, or lumber or airplanes, things we export to Japan.  So we protect jobs in one industry but lose them in an other. 

Nobody wins in a trade war, and this was a major impetus in the trend towards free trade agreements in the 1990s.

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krishna-agrawala | College Teacher | (Level 3) Valedictorian

Posted May 30, 2010 at 9:36 AM (Answer #4)

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Protectionism refers to the practice of restricting free trade, particularly imports, across national borders to protect the interests of local industry and business in a country.

The biggest disadvantages of protectionism is that it tends to the pressure among local industry and business for improving efficiency and effectiveness by protecting them from international competition. In this way is tend to promote inefficiency and poor performance.

Protectionism also interferes with the process of improving productivity by use of division of labour. Global trade allows a nation to produce and export to other countries products and services that it can produce most efficiently, and, in exchange, import from other countries what they produce most efficiently. Protections comes in way of this give and take process and reduces the total volume of both imports and exports, reducing the advantage gained form the specialization and division of labour at international level.

The biggest advantage of protectionism is that it promotes development of the basic capabilities of countries to produce goods and services efficiently by providing them with a protected market during the period when they are developing. Also, protectionism protects the local industry from monopolistic competition from large and powerful overseas competitors, who may indulge in unfair practices like dumping.

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litteacher8 | Middle School Teacher | (Level 1) Distinguished Educator

Posted July 23, 2011 at 2:54 PM (Answer #5)

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Protectionism is an alternative to outsourcing. An advantage would be that more products would be made in America, so we would have more control over how they are made. We may be less likely to get cheap goods, but we would definitely be less likely to get antifreeze in our toothpaste!

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