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| quote: | Originally posted by Lebezniatnikov
So why don't they revert back to free trade? Because it's a classic prisoner's dillemma [EDIT: ZERO-SUM GAME]. |
Prisoner's dilemma is not a zero-sum game. Zero-sum game means that the set of outcomes will sum to zero regardless of the actions of the participants, like a chess game, where you can count a player's loss as -1, tie as 0, and win as 1. There are three possible outcomes, {1,-1), {0,0}, and {-1,1}. Each possibility sums to zero.
Protectionism is just a subsidy for economic inefficiency, i.e. the protections implemented must be proportional to the level of inefficiency of your industries (otherwise they wouldn't "protect" anything). If your country lacks the stimulus for growth provided by genuine competition, then other countries who are not protectionist will eventually outrun you, because your tariff levels will have to increase each time the non-protectionists come up with an innovation before you. It may look good in the short term, but it will eventually fuck you over (just as "always defect" is not the optimum strategy in iterated prisoner's dilemma).
You can always go for total autarky, but just try doing that and maintaining the standard of living desired by people in first world countries. Good luck.
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