Home
/
RELIGION & LIBERTY ONLINE
/
What are the unintended consequences of American protectionism?
What are the unintended consequences of American protectionism?
Jul 3, 2025 8:29 PM

Protectionism is often associated with patriotic zeal and concern for America. While citizens should certainly have concern for their nation, protectionist measures do not necessarily secure the economic results desired. Acton’s director of research, Samuel Gregg, writes about the unintended effects of protectionism in a recent article for The Stream. These policies often hurt the very people they’re meant to help. Gregg, while admitting protectionism may be well-intended, indicates the superiority of free trade in bringing about human flourishing. Samuel Gregg begins by criticizing the concept of protectionism:

The very word “protectionism” is one of its selling points. It implies that those who favor protectionist measures want to shield, guard and defend Americans from forces which undermine their economic welfare. But does protectionism realize these goals?

Generally speaking, the answer is: no.

In the first place, measures to protect particular businesses don’t buffer them from the technological changes that are among the biggest disruptors of the economic status quo. No subsidy from the federal government in 1900 could protect the American horse-and-buggy industry from the birth of the modern car when Karl Benz built the first prototype in Germany in 1885. His technology crossed the Atlantic and Henry Ford eventually developed the Model-T. This created wealth for many, jobs for millions, and greater ease for all.

Gregg affirms the fruits that can arise from free trade and criticizes the protectionist ideals that stifle innovation and economic growth. The stifling of free trade will cause more harm than good in its goal of benefiting Americans. Additionally, while having the intention of saving jobs, protectionism can actually cause a net-loss in jobs. To illustrate his point, Gregg covers the U.S. auto-import quotas of the 1980s. He says:

Between 1981 and 1984, the USimposed import quotas on the car industry.In this case, the import quota sought to limit foreign car imports and thus ostensibly benefit American car manufacturers and workers. Indeed, approximately 22,000 jobs were saved.

Unfortunately, it also resulted in a 41 percent average price increasein the cost of a new American car over that same period. In other words, this protectionist policy encouraged the American car industry to be less efficient. Millions of American consumers picked up the bill.

The problems didn’t end here. The price-increases contributed to lower demand for cars from those same American consumers. That led to fewer sales and subsequent lay-offs of over 50,000 American workers by car manufacturers. As one report retrospectively noted, “Thus, even though 22,000 jobs apparently were saved, the layoffs caused by the price increase actually produced a net loss of 30,000 jobs.”

In his conclusion, Gregg affirms that free trade may not be a fix-all to our economic problems, but indicates that it can serve as an incentive-force in the market that creates economic growth and greater access to resources and, although imperfect, is certainly preferable to protectionism.

petition created by free trade generally results in one of two responses from affected American businesses. The first response is to try to out-innovate and pete petitors.

As a result, some businesses will not only survive but grow and prosper. Consumers benefit from better and cheaper products. Other businesses will, despite their best efforts, fail. This happens every single day. And sometimes petition that drives an pany out of es mainly from other panies.

The second response for businesses facing petition is to request state assistance. This is usually made in the name of the national interest or American jobs. But it actually has more to do with (1) protecting what industries regard as “their” markets and (2) their inability to make the hard-decisions which are part-and-parcel of business.

An entire industry may even calculate that it’s more cost-effective for them to spend resources on lobbyists to secure some sort of government subsidy. That’s called crony capitalism, which, because of its corrupting effects, is even more reason for America to resist protectionism.

…Certainly free trade isn’t without its downsides. But that’s not a reason to blind ourselves to protectionism’s manyflaws. In the long-term, protectionism isn’t in America’s national interest. It won’t make America great. Let’s hope we don’t have to rediscover that truth the hard way.

To read the full article, click here.

Image is public domain.

Comments
Welcome to mreligion comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
RELIGION & LIBERTY ONLINE
How Michigan’s licensing laws hinder the disadvantaged
Proponents of greater government intervention often argue that some freedoms are well worth sacrificing for greater social stability or public health and safety. Such is particularly the case with occupational licensing and other micro-regulations, where the government routinely imposes barriers with the stated aims of “protecting consumers” or “stabilizing industries.” But while such regulations may overly technical and practical, the cost of the corresponding freedoms is far from abstract. It’s personal—felt in the form of new economic obstacles for the...
Sir Roger Scruton: How to preserve freedom in the West
One of the leading philosophers of our time says Western culture will have to be handed down outside the ivory towers and college lecture halls – and he has strong reason to believe that its promulgators will be successful. Sir Roger Scruton’s optimism is not unfounded; he found the dissident, underground munities munist-dominated Europe had a greater thirst for truth and Western culture than their contemporaries in the politically correct West. Scruton reminisced about his career as a pioneering thinker...
How the populist moment can become the liberty moment
Since the War of Independence, the American self-image has set individual liberty against oligarchic power. Abraham Lincoln encapsulated this when he described the American experiment as a government “of the people, by the people, for the people.” Perhaps it was inevitable that populism, in the form of the People’s Party, was born on U.S. soil – and that, as it experiences a modern-day resurgence, it begins in the United States. The original Populists described themselves as “the plain people” fighting...
Understanding Bolsonaro
When Jair Messias Bolsonaro walked into TV Cultura’s studio in July, no one had any idea of ​​the political tsunami that would engulf Brazil 90 days later. The “Roda Viva” is the oldest talk show on Brazilian television; a group of eight journalists sit on a wheel-shaped bench and in the center lies the interviewee. That Monday, Bolsonaro spoke about how he would toughen criminal laws, turn back the sexual revolution, and restore Christian morality. He admitted to not understanding...
Samuel Gregg: What is crony capitalism?
In an interview for Guatemala’s Universidad Francisco Marroquin, Samuel Gregg, the Director of Research here at the Acton Institute, answered questions about crony capitalism, mentioning how it works and his worries about this problem. Gregg explains crony capitalism by contrasting it with the free market and political market. He mentions how it works in the economy, what happens in the marketplace when it’s used, and why it’s a problem for both the people doing business and for entrepreneurs. ...
Video: Samuel Gregg on Russell Kirk’s contributions to conservatism
This is the fourth in a series celebrating the work of Russell Kirk in honor of his 100th birthday this October. Read more from the serieshere. On October 3, Acton’s Director of Research, Samuel Gregg, joined a panel at the American Enterprise Institute memorate the life and legacy of Russell Kirk, one of the leading American intellectuals of conservative thought.Hosted by AEI’s Ryan Streeter, the event also mentary from Daniel McCarthy of Modern Ageand Ted McAllister of the Pepperdine School...
Jaime Balmes: constitutional politics at the service of conciliation
This article is written by Josep Mª Castellá Andreu and translated by Joshua Gregor. It was originally published by RedFloridaBlanca and is republished with permission. Nineteenth-century Spanish constitutionalism is usually interpreted as a pendulum swinging between liberal or progressive constitutions and moderate or conservative ones. This interpretation highlights constitutional instability and the minimal impact of constitutional documents on the nation’s political and social life. Former Constitution Square in Barcelona French writer Théophile Gautier (1811-1872) described Spain’s constitutional reality very well...
Brazil’s conservatives mount a counter-revolution
Writing to a friend about his pessimism regarding the future of Western Civilization, Jacob Burckhardt made an interesting observation. The Swiss historian believed that history was not a linear process and that he could see that sometimes that Providence contains some surprises for us. It is with bination of surprise and pessimism that we should analyze the Brazilian presidential election in which Jair Bolsonaro, a populist candidate with conservative tendencies, who made the defense of traditional Christian values the main...
YouTube powers Brazil’s conservative Catholic wave
Father Paulo Ricardo is a very sympathetic man. Always smiling, he is tall, thin, and balding. His austere appearance reminds us of priests portrayed in the films of the 1960s. Father Paulo could easily pretend to be Dom Camilo, the wise Italian priest created by Giovannino Guareschi and immortalized in the cinema by the brilliant French actor Fernandel. Like Dom Camilo, Father Paulo is a provincial priest, far from the axis of Rio de Janeiro – Sao Paulo, who lives...
William Penn on the three fundamental rights of citizens
Yesterday was the birthday ofWilliam Penn, the influential English Quaker and founder of Pennsylvania. This year also marks the 300th anniversary of his death. Although Penn was an Englishman, he became, as Gary M. Galles says, the first great champion of American liberty. As Galles notes, When Charles II died, a large debt to Penn’s father was settled in 1681 by granting him what would e Pennsylvania. Penn implemented his authority over the colony in his 1682Frame of Government, Pennsylvania’s...
Related Classification
Copyright 2023-2025 - www.mreligion.com All Rights Reserved