Trade Policy and National Identity: Why Keynes Was Opposed to Protectionist Policies?

Elise Brezis ()

No 2020-02, Working Papers from Bar-Ilan University, Department of Economics

Abstract: The views of Keynes on Trade policy are clear: Protectionism as well as hoarding a surplus in the balance of payment are wrong. This paper analyzes the optimality of protectionist policies and having a surplus in the context of the international political system. I show that in the situation of a hegemonic country, all classes – the working class as well as the elite – opt for free trade. But, in a balance of power context, wherein no single actor on the international scene possesses hegemonic status, the working class will choose protectionism, having a surplus, asking for harsh reparations, while the transnational elite and Keynes will not.

Keywords: Balance of Power; Carthaginian Peace; Hegemony; Reparations; National Sovereignty; Trade Policy (search for similar items in EconPapers)
JEL-codes: B17 B27 E12 F30 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2020-02
New Economics Papers: this item is included in nep-int, nep-pke and nep-pol
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