The Global Economic Crisis of 2008, has been regarded as one of the most serious financial crises since the Great Depression of 1930. This crisis featured the fall of the world stock markets, collapse of large financial institutions which resulted in some of them being bought out and the scrambling of some of the world’s wealthiest governments to bail out and rescue their financial systems.
It was of some concern by economists that the introduction of Globalization was a factor that played a small part in the happens of these crises. The effects of the crisis slowed down the further introduction of globalization which as a result then made countries start to consider implementing trade barriers or reverting to protectionism to help protect and boost their countries. This range of events regarded Globalization as an irreversible trend that is advancing as the years go by.
Every industrial revolution has driven a wave of globalization. It can be considered as a process of increasing integration and growing economic interdependence between countries worldwide. It has brought about widespread benefits both to the United States economy and the global economy through mostly international trade and liberalization. Some countries such as the United States may not be in total agreement with Globalization and for that reason, they look more on the side of Protectionism.
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Protectionist policies are measures that are put in place by a countries government that protects their domestic industries from unfair competition from foreign industries. Protectionism is the implementation of economic policies that restrict free trade between countries using tariffs, quotas, and other restrictive methods. Free trade is the exchange of goods and services between countries without restrictions. So, protectionism can be considered as being directly opposite to free trade, since free trade is based on the free movement of goods and services in and out of a country’s border. Globalization is seen as being much broader than free trade but can also be considered the opposite of protectionism since it is partly related to the trade of goods and services and because it agrees with most of the arguments that protectionism is against.
Both Globalization and Protectionism are seen as broad and controversial issues. To get a proper understanding of what each issue about they have to view from both the point of view of those who are in agreement and those against. Those for in favor of Globalization usually see it stabilizing their economic growth and helping them move towards good trade policies, free trade, liberalization, and global interdependence. While others that are not in favor usually go for protectionist policies for their countries as an alternate way to achieve their economic growth.
They both have effects on a country’s economy depends on the process that they are operating under. But when put together for a discussion they can be narrowed down to focus on just economy’s and how the effects of one issue on an economy may force countries to consider the other issue. This topic was chosen since we see the US in modern times moving towards Protectionism even though they have an active role in shaping world trade and investments. The United States has played a major role in shaping and driving globalization in the form of international trade but even with that influence, we see in recent times they may be moving more towards implementing more protectionist policies.
Although the United States may see protectionism as a better way to help their economy at the moment it may or may not be the best option being that Globalization has had such influences on their economy and similar economies.
