Remember the in-flight safety video? Where the oxygen masks drop during turbulence and you are told to mask yourself first and then help others out? Well, economic recessions and fluctuations are a lot like mid-air turbulence. They throw all sense of routine and uniformity out of balance and every one's life is thrown in disarray. At such a time, is it wise for a country to take on a similar 'protect yourself before you protect others' approach when it comes to economic growth?
The answer, I felt till a very long time was yes. Each one for himself. Tough times need tough action. And if I don't safeguard myself, how can I expect someone else to safeguard my interests?
As it turns out, this idea is wrong in a globalized world. Given the current economic downturn, many nations are feeling the pinch of recession, and are scrambling to save themselves from collapse. Underdeveloped nations that depend on the developed world for survival have had to bear the maximum brunt of the recession. But what is surprising is that in spite of the degree of development achieved by the developed world, in spite of the cushion of comfort the numerous years of growth have afforded them, the developed world also tried to scramble for cover! A glaring example is the 'Buy American' clause in the rescue package of the American government. I happened to see the hue and cry against this clause in Canada, whose dollar value of trade is the largest with USA, and it was then that the full force of the argument hit me. Look at it this way. The world is going through turmoil. Internal consumption is hit badly. So, to keep the economy afloat, you need to look outside - trade. And if your counter party (who happens to be an economic superpower) in the whole trade equation turns away, to protect his own interests, where else do you go? Superpowers are afforded that status for a reason - the immense accumulation of sustained growth over the years is actually supposed to put them in a position to help other 'comparatively needy' countries out in times such as these.
I remember having read an article once, when the whole cap on H1 visas came out in early 2009. The article spoke about parochial decisions that make a government want to look inward and at short term political benefits while forgetting about the long term implications of its actions. In other words, the article went on to say that in a recession, where a sudden spurt of growth through innovation is the need of the hour, if a country like US were to shut its door to skilled labor, they are in a way missing the forest for the trees! And later, when the recession goes away, the opportunity cost for the skilled labor may not be incentive enough to make them want to go to work in the US. At such a time, the long term picture would have effectively been ruined on account of protectionary tactics of the past.
Funda conclusion - Protectionism - not good. A superpower must use her superpowers to elevate all those suffering under recession, and such a mass elevation can alleviate every one's issues collectively.