Game, Set, and Match for Mr. Ricardo? the Surprising Comeback of Protectionism in the Era of Globalizing Free Trade

By Went, Robert | Journal of Economic Issues, September 2000 | Go to article overview
Save to active project

Game, Set, and Match for Mr. Ricardo? the Surprising Comeback of Protectionism in the Era of Globalizing Free Trade


Went, Robert, Journal of Economic Issues


One of the central aspects of economic globalization is increasing free trade. Since Adam Smith [1776] and David Ricardo [1817] armed advocates of free trade with the theorem of comparative advantage, they have been "winning every battle in the textbooks" [Pen 1967, 104]. Today, opponents of protectionist policies and proponents of globalized free trade are claiming victory [IMF 1997; Irwin 1996; Krueger 1997]. However, public anxiety about globalization and free trade is rising [Rodrik 1997]. In an increasing number of grassroot movements and Non-Governmental Organizations [NGOs], proposals for new forms of protectionism against the social and ecological consequences of free trade and increased capital mobility are being discussed.

This paper discusses some contemporary debates about free trade and protectionism. After a very brief look at the genesis of the classical theory and major criticisms raised at the time, especially from a national [List 1841] or class conflict [Marx 1848] perspective, I take up today's criticism of the free trade paradigm. It will be argued that the case for free trade is not at all as strong in today's globalizing world as its proponents claim. In the last section, I discuss the rationale and conditions for certain types of protectionist policies in today's globalized world. The possibilities for such policies to be implemented are closely linked to the answers of new and already existing social movements to the current globalization of competition and neo-liberalism.

The First Victory of Free Trade

As every economist knows, Smith and Ricardo were the first to make the case for the principle of free trade in a coherent way. Smith challenged mercantilist doctrines and succeeded in defending free trade as being not only important for a particular industry or class, but as a general interest. The case for free trade was further strengthened by the theory of comparative costs or comparative advantage, which is generally credited to Ricardo [1817]. He introduced the idea that even countries that are superior in producing all goods in comparison with potential trading partners will benefit from trade. He basically went one step further than Smith, because he took into consideration that productivity levels between industries differ from one country to the next [Altvater and Mahnkopf 1996, 201]. By incorporating that aspect, he succeeded even more than Smith in showing that free trade is in the interest of every country, because there is always something that can be traded. Neither Smith nor Ricardo propagated free trade for general cosmopolitan or unselfish reasons, but did so because the extension of the international exchange of goods is more in each nation's interest than protectionism. In fact, they explained that there is no contradiction between the national interest and free trade [Irwin 1996; Weiss 1968, 33; Robinson 1968, 117].

Smith and Ricardo argued the case for free trade from--what today would be called--a "win-win" perspective, in which there are no losers but only winners. They consider international economic relations as "essentially harmonious" [Gilpin 1987, 188] and benevolent for all, as long as trade is allowed to take its "natural or spontaneous course" [Mill 1874, 21]. But Friedrich List and Karl Marx challenged the assumption that the world is like a "harmonious world republic." List [1841] strongly opposed the "bottomless cosmopolitanism" of the free trade school. He argued that the state has an important role to play in coordinating and carrying through policies for industry and the economy and that unrestricted free trade, as propagated by the classical school, should be opposed. His basic argument is that nations have to protect themselves temporarily against imports from more developed countries until they have the time and means to develop to the highest possible stage of development. For Marx [1848] the debate about free trade was neither timeless nor a discussion about principles in general.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Game, Set, and Match for Mr. Ricardo? the Surprising Comeback of Protectionism in the Era of Globalizing Free Trade
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?