Free trade: Does protectionism protect or destroy jobs?

Neither, according to Paul Krugman. Protectionism causes a misallocation of internal resources, i.e. an economy wastes resources on producing products and services it would be more efficient to import.

Any doubts as to where he stands on protectionism v free trade should be readily cleared up by this quote

Just to be clear, I don’t think the Smoot-Hawley tariff was a good thing — it was a really bad thing. Nasty protectionism! Bad Smoot-Hawley! Bad! Bad! Bad!

Krugman on what protectionism does cause –

Bear in mind that what protectionism does, according to textbook economics, is to cause a misallocation of resources, reducing the economy’s efficiency. It does not cause mass unemployment of resources — which is what the Depression was about.


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