Protectionism


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Any of several political-economic doctrines that have in common advocating that government impose political barriers to international trade (usually taxes on imports or quantitative restrictions limiting the volume of legally allowable imports of each particular good) in order to “protect” a domestic firm (or firms) manufacturing these same goods from foreign competition and thereby make it (them) more profitable than would otherwise be the case under free competition. Although difficult to justify on the basis of economic theory, protectionist measures often enjoy considerable political support because it is usually much easier for a tiny group of firms (and their associated labor unions) that stand to benefit greatly from a protectionist measure to organize for political influence than it is for the much larger group of consumers who each stand to lose smaller individual amounts by the proposed measure — even though the total losses normally greatly exceed the total gains.

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