Hammer Time: Protectionism Uber Alles?

I love stability. Give me a world where folks can put forth a solid effort in their work and not worry about their future, and I’ll gladly join it with membership in hand. But then with too much stability also comes mediocrity. In times of yore, a lot of folks could simply get by with offering products and services that were less than world class. To put it kindly, they sold crap. But they also benefited from a playing field where the strongest and fiercest were kept far from the action and their kids inevitably got the education needed to make the laggard company successful. Auto Companies in South Korea, Japan and now China have benefited from protectionist policies that offered different degrees of medium-term stability and long-term learning for their once weak automakers. Should we follow suit?

I don’t know. I do believe that the current system we have now stacks the cards against the domestic automakers and encourages them to produce their products overseas. For those of you who believe that this is the only function that’s exported, dream on. China is literally building an exceptionally large market by educating their population and stealing technology whenever possible. The South Koreans throw in a very long line of trade barriers and restrictions that have made foreign competition very minimal in their market. Who did they learn that from?

Primarily from the Japanese. And nearly every country and economic union have policies that intentionally regulate foreign competition. Throw in the fact that a lot of Volkswagen’s (and Daimler’s) success is determined by being the in-house favorite in several developing countries, and you end up with a ‘myth’ of truly open markets. Given our untenable deficits and high unemployment, I repeat: is it time for us to follow suit?