Why Do Countries enact Protectionism?
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With trade being encouraged by most Economists as beneficial – why then are there countries that erect barriers to free trade? What are some of the reasons certain countries have decided to restrict the extent of trade its country engages in?
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your map is wierd
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Being that we are no longer under a gold standard having a trade deficit no longer means "the country is living beyond its means". We don't have a fixed amount of money available. Money is created by growth and thus is only limited to the ever -expanding potential of the economy. Money flowing out of the domestic economy is offset by the benefit to all consumers of foreign products, both in price and quality due to specialization. It provides the tools for an economy to develop and grow. And as I said growth is the only thing that we need to mathematically expand our money base. We don't need to import our money anymore, we can create it by growth. Also, without free trade, protectionism hurts the exports of an economy and all the industries that depend on it. So you will create losers and unemployment on the exporting side of the economy as well. You hurt your right hand while trying to heal your left. So its not that we need less imports or more exports ,the only thing we need is more growth. That's were our money actually comes from.
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