Stop Confusing Protectionism With Isolationism

Manufacturing health depends on knowing the difference between isolationism and protectionism

I’ve just read an article by Mike Collins – a straight-shooting, knowledgeable & experienced editor and manufacturing consultant. If you haven’t seen his post ‘Balancing Our Trade Is Not Protectionism‘ yet, you should. It’s fantastic, like most everything else this champion of US manufacturing writes.

There isn’t much to deny here. Mike describes how and why free trade and our policies have led us to critical economic straights, and – I believe, correctly – assigns who’s been steering this course for the last 20 years.

But I do have one bone to pick with Mike – and it’s the title. I don’t mean to single Mike out (this just gave me a chance to plug a fine piece by a fine US manufacturing ambassador). I actually have a problem with the overall misrepresentation of the term ‘protectionism.’ While it may seem like I’m splitting hairs, I think it’s time we stop vilifying the term as though it’s a bad thing.

The fact is, it’s not. On the contrary, protectionism – in just about any form you can think of – is a staple of healthy, successful economies, businesses, families and lives.

I’m often shocked – but rarely surprised – by the propaganda perpetuated by politicians, and by how often that propaganda is swallowed whole by the masses. Look, I’m not perfect. And I don’t have an inside track on the cave wall.

Maybe confusing ‘protectionism’ for ‘isolationism’ is just opportunism or deft political gamesmanship. But while linking the terms may seem minor to you, it’s actually played an important role in convincing us that ‘fair trade’ is bad – and THAT’S what has us into a BIG pickle right now. It took our eyes off the ball.

To understand my point, let’s take a look at the definitions:

pro-tec-tion-ism: The theory or practice of shielding a country’s domestic industries from foreign competition by taxing imports.

i-so-la-tion-ism: A national policy of abstaining from political or economic relations with other countries.

Isolation is a horrible thing for nearly anyone or anything, socially, culturally and economically. It’s final, and complete. Cutting oneself off from contact with others brings with it so many obvious negatives they’re nearly unnecessary to bring up:

  • For individuals, look no further than Michael Jackson or Elvis Presley for obvious examples – extraordinarily talented people that surrounded themselves with sycophants and enablers that let them become recluses living outside the boundaries of reality. The same can be said for the neighbor or widow or widower or hermit or ‘cat-lady’ downstairs from us – isolation leads to loneliness and helplessness. We aren’t built to be alone. And the same thing can happen to whole countries.
  • Look no further than North Korea – a country that suffers from extreme poverty in all forms due in no small part to isolation.
  • And look no further than our own manufacturing base – by off-shoring our production in the name of ‘free trade’ and the ‘invisible hand,’ we’re losing (have lost?) our ability to create and innovate by isolating a generation from their place in the evolution of making things. The results? A lack of appreciation for how valuable manufacturing is, along with the loss of acceptable talent to take us beyond the processes and products we helped to innovate ourselves.

Isolationism is extreme, and it’s bad. But to equate protectionism with it is worse – because we’ve let ourselves be convinced the two are synonymous. And that’s just not true – or, it sure shouldn’t be.

Protection is vital to the same elements of our lives that isolation can destroy.

  • Imagine your  family has been threatened, and about to be physically – or economically – attacked. What man or woman would rationalize that doing nothing is the right response? What parent would sacrifice the health of a child by depriving them of nutrition or medical care? We protect ourselves and our families everyday, the best we can.
  • What country, when attacked, wouldn’t protect itself & its citizenry?
  • And what company, if under intense competition, wouldn’t TRY to compete, adjust, renew or innovate its way out? (Sure there are plenty of examples of companies that have failed to compete successfully, but nearly all at least TRIED.)

The fact is, our country was built on protectionism – Alexander Hamilton created a manufacturing & economic blueprint for our infant nation that was in place for over 150 years. It was protectionist – and far from isolationist – and it served us pretty darned well. His Report on Manufactures was full of protections that not only ensured economic and industrial growth, but considered the mutual benefit to our trading partners.

(We didn’t always follow the blueprint, but it was there as a handrail to steady us when we fell.)

Finally, look at China today. Despite its many challenges with inflation, its own labor issues & social evolution, protectionism has served them pretty doggone well. Forget the points of currency or mercantilism for a moment, and understand that those things aren’t so much part of the primary problem at the moment.

Our real problems are, in fact, that we haven’t protected ourselves, and we just let it happen. And what kind of country would do such a thing? We’ve allowed the term ‘protectionism’ to be demonized and portrayed as an evil equal to ‘isolationism.’ The two are mutually exclusive – and they’re actually quite different. One will lead to manageable prosperity and control of our own destiny, while the other will kill us. Just like doing nothing will.

We mustn’t let others define our values for us. Otherwise, we’ll abdicate even more of our industrial base before the alter of ‘free trade.’ Despite what you hear – and I choose to follow Alexander Hamilton’s lead on this – government CAN and SHOULD play an integral role in this direction.

Personally, I think I’ll take a strong, healthy dose of protectionism right about now, as opposed to what we’ve been getting to this point. How about you?

Written by AJ Sweatt