Developing world Protectionism

there broad consensus among economists free trade helps workers in developing countries, though not subject stringent health , labour standards of developed countries. because growth of manufacturing—and of myriad other jobs new export sector creates—has ripple effect throughout economy creates competition among producers, lifting wages , living conditions. nobel laureates, milton friedman , paul krugman, have argued free trade model economic development. alan greenspan, former chair of american federal reserve, has criticized protectionist proposals leading atrophy of our competitive ability. ... if protectionist route followed, newer, more efficient industries have less scope expand, , overall output , economic welfare suffer.

protectionists postulate new industries may require protection entrenched foreign competition in order develop. alexander hamilton s argument in report on manufactures , , primary reason why george washington signed tariff act of 1789. mainstream economists concede tariffs can in short-term domestic industries develop, contingent on short-term nature of protective tariffs , ability of government pick winners. problems protective tariffs not reduced after infant industry reaches foothold, , governments not pick industries succeed. economists have identified number of cases across different countries , industries attempts shelter infant industries failed.

economists such paul krugman have speculated support protectionism ostensibly further interests of workers in least developed countries in fact being disingenuous, seeking protect jobs in developed countries. additionally, workers in least developed countries accept jobs if best on offer, mutually consensual exchanges must of benefit both sides, or else wouldn t entered freely. accept low-paying jobs companies in developed countries shows other employment prospects worse. letter reprinted in may 2010 edition of econ journal watch identifies similar sentiment against protectionism 16 british economists @ beginning of 20th century.