Protectionism - Why Australia has some industry.: Other than the UK, which industrialised before other countries, every other country that has industrialised and created high tech industry has been protectionist.
Once industries have been established free trade can be allowed, but even then governments need to be very careful to keep incentives for industry around.
The dramatic econmic rise of East Asian countries has been largely protectionist. It is interesting to talk to people about trying to sell things in Japan.
Arguably the American Civil War could be seen as a battle between the protectionist North, who wanted to bolster their industry, against the free trade South who wanted cheap industrial goods from England.
Sweat shop factories can be created by others with expertise in countries that have built it up, but free trade doesn\'t create much else. Capital is inherently more mobile than people.
Government subsidies and the careful creation of conditions that allow businesses that do more than hang out people\'s washing to flourish are critical.
When discussing the Australian Military we frequently refer to how Australia needs to create it\'s own. This is a form of subsidy or protection.
The major black mark against the Howard government is that they rolled back the export enhancement programs and sunset claused research (CRCs) that the Hawke Keating government had set up and that led to double digit growth in Australia\'s exports. Now the balance of trade is coming to haunt the Coalition.
They have adopted with respect to economic development the same economically orthodox system that has led to New Zealand\'s decline.
Today both free trade and protectionism are outdated. Government incentive\'s with research funding and tax incentives coupled with export enhancement programs are better. But in the past, protectionism led to the creation of industry.
Thankfully Australia had protectionist economics.
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