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My Take on Economic Nationalism

international relations, foreign policy, economic nationalism, trade, free trade

One can never downplay the interconnectedness of economies and politics. This relationship has been affirmed over the years and the shift of trends after the World War will actually tell us that economics has become more important internationally due to the increase of trade levels, ever tightening economic interdependence between countries and the growing impact of international economics.

Also, in the process one can never deny the North and South divide.

An essential dispute felt lies in the issue of economic nationalism, is this a wise way to go or not?

Those who wish to resist the advancement of free economic interchange believe that states should benefit from its own produce and harness its economic strength solely for national interest. They also favor using the state’s power to assist in the economic build-up. States that adhere to this actually allows its politics to control economic policies. Also discussed in the chapters are varying explanations why the South remains poor and how certain policies exacerbate their situation.

When you look at the status quo however and attempt to be pragmatic in your view, you can actually conclude that an open market does more good than harm and that it will actually cost us more if we would go with trade protectionism, economic sanctions and the like.
A state’s openness to international trade and investment enables it to achieve stronger domestic economy than would otherwise be possible. Such gains from trade stem from the fact that not all economic activities can be performed with equal proficiency in every country and not all firms are equally competent in producing each line of goods and services. Through trade, certain firms gain access to cheaper components and services from abroad. The result is more cost-competitive domestic production of both goods and services for the said state and international markets. By concentrating on the production of certain goods and services and trading for others, one market can consume more of all products than would be possible without trade. This is what economists call the doctrine of comparative advantage.

Not only is it advantageous to Western countries but also beneficial to third world nations. One way of aiding Third World nations is through free trade. By lowering import barriers, states can allow the private sectors of the Third World easier access to their markets. With the huge markets of the United States available for their products, entrepreneurs will have the opportunity to develop new industries or expand old ones. As Lord Bauer writes, removing protectionist barriers will allow more Third World countries to experience the success of such Pacific Basin countries as Hong Kong and Singapore:

As for economic development, the West can best promote this by the reduction of its often severe barriers to imports from poor countries. External commerce is an effective stimulus to economic progress. It is commercial intercourse with the West which has transformed economic life in the Far East, South-East Asia, and parts of Africa and Latin America.
Published: 2009-06-17

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I am a 20- year old fresh graduate in Political Science and wish to maximize my time and skills through this. Hopefully I would get just compensation too!

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