Why in news
Beggar-thy-neighbour policies are becoming a topic of discussion due to rising trade tensions and protectionist measures between countries, including tariffs and currency devaluation, which impact global trade and economic stability.
What are Beggar-thy-neighbour Policies
Definition: Protectionist measures aimed at benefiting a country’s economy at the expense of others, like imposing tariffs or devaluing the currency.
Common Examples: Trade wars, tariffs on imports, or currency devaluation by central banks to boost exports and discourage imports.
The term was coined by Adam Smith in 1776 to criticize mercantilist policies.
Supporters’ View:
They argue these policies protect national industries and jobs, especially in strategic sectors.
Depreciating currency boosts exports by making them cheaper.
Opposing Views & Criticism:
These policies can make all countries poorer if retaliatory actions (tariffs, devaluation) escalate, as seen during the Great Depression.
They harm consumers, increase prices, and disrupt global trade.
They raise prices and reduce the purchasing power of domestic consumers.
Trade wars and retaliatory measures reduce global trade, harming the global economy.
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