How Much Globalization Versus Nationalism/Protectionism is Needed Right Now to Resolve the Economic Crisis?

BY Business Desk  December 16, 2008 at 11:50 AM EDT

Wall Street during the Depression; file photo

Question/Comment: How much globalization versus nationalism/protectionism is needed right now to resolve the economic crisis?

Paul Solman: Interesting. Your question prompts a warning. The Smoot-Hawley Tariff Act of 1930, an attempt to protect American industry only eight months after the crash of 1929, has been credited by some economic historians with helping bring on the Great Depression.

The misguided anti-globalization policies of the era have been called “beggar-thy-neighbor”: one country after another trying to protect its industry with tariffs while promoting it by devaluing their currencies (making their goods cheaper abroad and thus promoting exports).

There’s great debate as to the extent that these policies CAUSED the worldwide depression. But no one I’ve ever met or read thinks they HELPED.