What’s the point in reviving protectionism? You’ve got 15 minutes to answer. Pencils or tablets on board. Ready, steady, go!
Remember Middle-Age somewhat magnificent and impressive battlements aimed at protecting the city against angry rebellious visitors and doubtful merchants. Are we about to move backward to these obscure times? Globalization, supported by mainstream economic vision, doesn’t allow much free space for questioning free trade. We’ve built up WTO further to the GATT agreements, so no need to look back! It’s been agreed by all parties, or at least all countries reps who signed the deal. « Stop the war and let’s make business, instead » Everything’s gonna be alright. And indeed facts show less wars, at least no longer global ones, and a fantastic economic growth, worldwide. Less violence between neighbors. More wealth or, at least, a feeling of having more stuff, and not only food. Consumption became our new religion, sponsored by credit banks. However wealth distribution gap widened, although economists are always proud of showing figures of entire countries, initially deprived of modern wealth, escaping from poverty and misery trap. But schooling and housing prices also kept inflating. Good news for banks, always needed. And actual purchasing power did not really grow further to the 1970’s, whereas appetite for always more stuff remained high. Elder people now feel that changes have gone too fast. Please slow down! But nobody’s listening…
The collapse of Berlin’s wall symbolized the start of globalization takeoff, with a special reward to German-Chinese duet, taking special advantage from former DDR networks with communist China. It’s been a great ride, at a fantastic economic pace. However playtime seems to be over, no matter observers nostalgia from FT or other liberal info providers. Stock exchange weakness, combined with plenty of other worrying trends (credit bubbles, real estate speculations, environmental crises, energy threats…) Interdependence is no longer understood as a purely economic or financial problem. It’s way wider and deeper. We were shortsighted, but now we just keep on pretending we only focus on economic figures. Pretending health data, climate data and others don’t matter to us. This is precisely where super powers of protectionism come into action! Terrible threat for closed clubs of global decision makers, or sponsors of private, non-democratic, world ruling.
Once we could think – good riddance! – communism or socialism are dead (or almost). The simple and romantic idea of caring for others was buried, as it proved simply inefficient. « Has been ». Adam Smith seemed to prevail, with his laisser-faire illusion. But fast-moving globalization not only threatened jobs, wallets, homes, health. It eventually touched our identity, our culture. At times we would start wondering about the point of laisser-faire raids against local cultures.
How to defend diversity, be it natural or cultural? Protectionism is the answer, and funny enough, there isn’t a single government be it in Europe, North America or Asia who didn’t try to protect their people. Otherwise, why would countries set up norms (technical, environmental, sanitary…)? Why would France demand and obtain from Brussels « l’exception culturelle »? What vision of the future are we considering? Will quality prevail over quantity? « Protecting people » means reducing customer’s choice, not leaving all doors open to any kind of quality!
So here’s our current paradox: although a very popular act, protectionism isn’t a very famous policy. As if protecting would mean cheating somehow, disrespectfully of global rules. As if nations would turn to excessive parents, way too careful towards their kids. Overprotective! Think about it… Don’t be afraid, would say Adam S. Stop thinking of archaic protectionism. Some pretend there must be a « clever way » of combining both protection and laisser-faire. Like at home… Why complaining about slow development of pretending « future markets » (like clean cars, better homes, etc.) if in the meantime we don’t put enough force through more demanding norms ? In a perfect world, without abusively strong lobbies, without fast-tracks and favors for investors in Washington or Brussels, in a world without preference for the short-term, yes we could purely eliminate protectionism. Heavy political states would give up. A dream for some corporate bankers or free-mansions! Awaiting this utopic day, protectionism is the one way to reassure citizens about tomorrow (uncertainty control) and a clear signal sent to the rest of the world. Protectionism is a diplomatic weapon to show the way to foreign partners. A modern barricade against the loss of sovereignty, in front of ultra-liberal totalitarianism. To be replaced, in some utopic projects, by a real world governance!
Finally, protectionism within a nation or an economic region (as EU if it would have the required political courage, discipline and vision) could enable start-ups to bloom and spread in the most efficient way, bringing together private and public interest in a way that would please neo-classics. We’re talking about hi tech companies, large firms of tomorrow as well as craftsmanship and agriculture in a very local, sustainable and job-creating dimension. Unless we move ahead with more ambition, towards total opening, as in free software scheme, open 3D printing or smart-grids? In the end, between economic closure and unlimited freedom, there must be a golden mean!