As protectionism and a fritrederstvo correspond

As protectionism and a fritrederstvo correspond

That it is better - protection of the market or non-interference policy Today protectionism and a fritrederstvo is not two contradictory principles of economic policy, and the interconnected relations management elements between the countries.

Ratio of protectionism and fritrederstvo

To Fritrederstvo, as a rule, it is directed to achievement of long-term prospects, and protectionism proceeds from the prevailing circumstances and national interests. The Italian economist and the sociologist V. Pareto told once: "Knowing all economic and social conditions of the concrete country in the current situation, it is necessary to understand what and at this moment is suitable for this country – protectionism or free trade".

The ideology of a fritrederstvo arose in England the 18th century under the influence of an industrial revolution. Destruction of the agrarian duties affecting high cost of agricultural products, manufacturing development control, decrease in the customs duties interfering export of goods was the purpose of fight.

Protectionism – the policy of the state directed to protection of national economy against the foreign competition. At the time Europe and North America, only thanks to these measures, could carry out industrialization (18-19th century).

Negative sides of protectionism

1. Protectionism in the long term undermines national production. It deprives of the competition from the world market - and natural desire to develop "is muffled" by a routine, unwillingness to leave the found privileges. Resolute support of a protectionist barrier is nothing but influence of private interests.2. Harm for the consumer - one of consequences of protectionist policy. The overpayment for goods and services completely falls on the consumer due to the lack of the competition in the system of pricing. It concerns both national products, and import. 3. Protection of one of the industries will demand protection and another – effect of chain reaction.4. All temporary becomes constant sooner or later. Protectionism as a temporary measure, is not effective as it liquidates natural development of production.5. Strengthening of interstate rivalry leads to threat to security and stability. Mutual understanding between the countries is lost - and the hostility and mistrust step on "stage". Treat the purposes of protectionist policy: national security of the country, achievement of definite political goals, high salary, maintenance of the high standard of living, preservation of social classes, prevention of a depression and recession.

Free trade as opposed to a fritrederstvo and protectionism

1. Improvement of the welfare growing from international trade; 2. The natural development of the competition increasing quality of the made products; 3. Expansion of sales markets, favorable to the country and consumers in the conditions of mass production of goods.

Author: «MirrorInfo» Dream Team