Protectionism Theory

STATE POWER AND THE STRUCTURE OF INTERNATIONAL TRADE: STEPHEN D KRASNER.

Stephen was able to identify that states behaviours are constructed by their interest, this implies that major states should not be praised for the openness of the international trading system they create because it was only a function of their goals and interest (a means to an end), after all they are involved in major productions and these products have to be sold out to the world for economic gains and this is the reason behind the pressure from the individual entrepreneurs in Europe. Looking closely, we will discover that major powers only maintain a structure of free trade only when it works in their favour because they tend to drift towards protectionism when their

Mercantilism is a theory that conceals a country’s resources to itself and prevent it from enjoying the much blessings of resources from other countries. Such policies leads to destruction of economy because it never allowed free flow of goods and this also discourages industrialisation because manufacture goods could not enjoy international market. France reacted greatly against this protectionist theory because it was an evil that ruined the country financially as a result of excessive taxes and this weakened agriculture. It was a wise move for states in Western Europe to strive against this bondage of mercantilism and enjoy the many privileges and freedom of a free international trade. The depression in the eighteenth century was indeed an eye opener to a flexible and pleasurable world of global trade for those

Lake gave a long history of British and American hegemony, stating how Britain dominated the Dutch industries with the theory of mercantilism (protectionism) and thereafter, how America took over British hegemony with the theory of liberation (free trade). In comparing both hegemony, America dominated with a foresight by adopting the theory of liberalism which does not only encourage free trade, but also created an environment that encouraged continuous trade with other part of the world, this further strengthen and sustained their dominance. Britain on the other hand, adopted a theory of protectionism that scared states from it , thereby forming less economic alliance because of their prohibitions and trade restrictions, for this reason, they could not sustain their dominance. I consider America a better state in terms of strategic thoughts because during their dominance, they were able to establish international financial institutions that supported their dominance and increased their economic strength, insttutions like GATT, IMF, World Bank etc. Britain failed to establish such institutions that will serve as economic backbone. America imported and exported chemicals, machine tools etc. this encouraged industrialisation among other states because they could even export their manufactures goods to the states, this freedom of trade with America led to continued trade with other countries especially with the third world countries, which further strengthened and