POLI 205 Lecture 4: Trade and Investment
15 Oct 2017
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Document Summary
Believes that government should not intervene in economics except to regulate markets: neo mercantilism. Argues that governments should protect domestic jobs and industries through protectionist measures. Their goal is to maintain balance of trade and balance of payments surpluses. States adopt different types of trade strategies in order to maximize their own wealth while minimizing their dependence on other states. Some states have tried a policy of autarky (self-reliance). An autarkic state avoids trading altogether and instead tries to produce everything it needs. Autarkic states have been characterized by declining relative power. E. g. , albania (until 1991), china (1950s-60s), north korea. Many states engage in protectionism where they protect domestic industries from international competition. States often protect infant industries until they are mature enough to compete on global markets. States also protect industries that are critical for national security, such as electronics and computer industries. States often protect their domestic industries if market conditions worsen (e. g. , the.
