Economic Disturbances and Equilibrium in an Integrated Global Economy

Chapter 19

Self-Sufficiency, Nationalism, and Protectionism: The Common Elements

Abstract

Whenever a country has a trade deficit in a commodity or service, politicians are quite fond of arguing that we need to become self-sufficient in the commodity or service in question. Usually the proponents of this viewpoint argue that by becoming self-sufficient, employment in that commodity will improve. So far, we have no complaints about this argument. Then, more often than not, the policymakers and politicians extend the conclusion to the general economy. Unfortunately, while politically appealing, these self-sufficiency, nationalist, and sometimes protectionist arguments do not always deliver the goods. In fact, a strong argument can be made that nonmarket ...