126. Is protectionism bad?

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Modern economic theory, á la Friedman and Hayek, would have us believe that protectionism is bad. As citizens, we are quite conditioned to buy into this idea. But it is a red herring. Protectionism is bad or good depending on perspective. It is bad for the most developed economies, as it prevents their companies from accessing other markets, winning them and sending the resulting loot back home. Fledgling competitors in less developed countries cannot stand against fully grown industrial or commercial giants. But, for less developed economies, protectionism is the only way to successfully foster own industries. A great current example is the birth and growth of WeChat, Ali Baba, Lenovo and Huawei in protectionist China, not replicated in the EU, which opened up its markets to the US giants and has not developed a competitive chat app, search engine, marketplace or computer manufacturer. We gave away the crown jewels of the future economy to an apparent friend who may turn out otherwise

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Location: Hereford, UK

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