In spite of the attractiveness of the concept of isolationism, which seems to get resurrected during hard times, we simply cannot close down our borders to the outside world and try to create our own introspective version of Utopia. The planet is too interdependent.
It's instinctual to protect our family and homes from perceived dangers. The move toward isolationism tends to be a macro version of this innate reflex. But history shows us that in most cases this is not the correct reaction. Walls of all types, be they physical, legal or economic, can and will be breached. We've seen tariffs, quotas, price freezes and numerous other policy decisions not only fail in their intended specific relief but also unintentionally harm the larger economy.
Does that mean we should suffer the damage of unfair, unethical and illegal practices? No, of course not. To me, it's those practices where the full weight of intervention should be brought to bear.
However, in cases where foreign competitors manufacture more efficiently, it seems the efforts directed toward protectionism would be better directed to helping domestic equivalents compete more efficiently. It's an applicable adage that the best defense is a strong offense, and that applies well to participation in global markets. If their governments can create positive manufacturing environments, so should ours.
What it would take in this country is recognition, on a national level, that manufacturing is vital to the health of the domestic economy. I'm not sure that, in their hearts, many of our elected representatives and the bureaucrats that administer things really believe a strong domestic manufacturing base is necessary. I think they believe we can always buy what we need—somewhere.
Relying too heavily on remote, and possibly unstable, lines of supply can make a company and even an economy vulnerable to vagaries that fall outside the control of anyone. Could the Arab oil embargo be repeated in other industries? I believe the more dependent we allow critical areas of domestic manufacturing to become on others, the more likely that scenario can be repeated.
What's called for is not protectionism or isolationism but rather an awakening among policy makers that a globally competitive manufacturing base is a fundamental and vital component of our economy. We must not allow manufacturing to be exported wholesale because there is insufficient political will to say, "we need to make policy incentives that keep manufacturing in this country!"blog comments powered by Disqus