Globalization is the process in which a firm or economy becomes involved on an international scale. In an effort to become more globalized, many countries turn to open market trading to make the flow of goods and services in and out of the country an easier process. In addition to benefitting the county that participates in globalization, the entire world economy is able to benefit from the process as well. In contrast, protectionism is the process of shielding one’s own economy from foreign involvement. In order to practice the idea of protectionism, countries will often end up taxing imported goods, which makes domestic products more appealing to consumers. Although globalization and protectionism are seen as two competing economic policies, I believe that a healthy and strong economy requires a combination of both. In order to reach the ideal balance, countries will have to protect industries that play a vital role in their economy and engage in trading with countries that are not as advanced in that specific industry. The combination of globalization and protectionism allows countries to promote growth in the domestic economy, which will lead to growth in the global economy. 

When fully understood and properly regulated, protectionism offers countries a way to protect important sectors in their domestic economy. In his article “Free Trade, Theory and Practice” John Nye points out that free trade creates high barriers to entry for small start-up companies and businesses (Nye 302). By promoting protectionism, many companies will have less competition, which allows more domestic companies to enter the market. Protectionism can be a positive policy for the domestic economy because it allows domestic companies the opportunity to grow and innovate without any foreign competition. As a result, domestic companies will have more success under protectionism, which incentivizes more people to create businesses of their own. Protectionism in the domestic economy also protects U.S. jobs from being taken by foreign companies. Although the domestic economy can benefit from having relatively low levels of competition, in the article “Economic Globalization at a Crucial Moment” the author, Zhu Junqing, highlights the idea that protectionism limits the flow of ideas across borders, which slows down potential economic growth (Junqing). Junqing stresses that closing borders causes economic growth to slow because countries will likely run out of resources and ideas because there will be a lack of specialization (Junqing). The ideas discussed by Junqing will cause the domestic economy slow down because eventually, all domestic ideas will be exhausted. 

Protectionism in the global economy has similar effects than what is seen on a domestic scale. For example, take the manufacturing industry in the U.S. because it is plays such a large role in the strength of the U.S. economy. The harder it is for foreign countries to start manufacturing in the U.S., the more people will rely on American companies for manufacturing. If there was a lot of foreign competition in this industry, U.S. manufacturing companies would end up manufacturing less, and because this industry plays such a vital role in the economy, the U.S. may end up at risk of a recession. On the global scale, entire sectors are effected rather than just small companies. In addition to having positive economic benefits, protectionism can also have positive impacts on political regimes as well. John Nye points out that protectionism makes it harder for corrupt governments to be efficient because there is such low trade both in and out of countries with corrupt governments which often cause corrupt governments to fail. Although protecting the economy may be vital to certain sectors succeeding, protectionism has a negative impact on the total level of production in the economy. Instead of focusing on a select few industries and specializing in those areas, a country would need to take a more generalized approach and focus on all industries at once which would cause lower levels of production across all industries, and results in lower global production across all countries. Although some countries may opt to practice ideas and policies of protectionism, some countries are often limited by geological factors. This point is discussed by Ingo Borchert in the article “Services Trade Protection and Economic Isolation” where Borchert points out that countries that have geographical limitations that prevent them from certain infrastructure prevents them from trade (Borchert 641). Taking Borchert’s point one step further, geographical limiting factors can also be seen in certain areas of developed countries as well. For example, if a certain region has a mountainous terrain, there may not be a place for a highway to be built. Because there is no highway, this area will not be accessible for trade, which forces them to become more of a protectionist society. Geographical limitations have a greater effect on the global economy because the limitations often make trade impossible between countries, and therefore lowers the output of the global economy. 

Protectionism has similar effects on domestic and global economies. Although the effects are similar, what is necessary to see that what is good for the domestic economy may not be good for the global economy. Overall, protectionism allows certain businesses and industries to be protected from foreign competition. In the domestic economy, protectionism protects jobs and creates incentives for people to start businesses. In the global economy, protectionism restricts the flow of goods and ideas across borders, so it leads to overall lower global output. 

Looking at the other side of the argument, globalization is a way for consumers in the domestic economy to pay lower prices and get higher quality goods. Jerry Ellig points out that prices will be cheaper for consumer and of higher quality because they are being produced in an area that specializes in production of that product (Ellig 19). In addition to making consumers better off, globalization also provides new jobs for people in their respective domestic economies. As ideas are exchanged, new technologies and processes also enter the country, which provides the public with new opportunities of employment. Although this benefit may be hard to see in the short run, it provides better opportunities for people in the long run because the available jobs are evolving with the new information that is entering the country. One negative point that Charissa Yong points out is that people are not educated on globalization, so they automatically do not accept it (Yong). This point is further emphasized by Jiang Shixue as she describes the uncertain future of globalization as a result of the recent election in America and the Brexit vote (Shixue). Most people automatically think of outsourcing jobs when they hear a term like globalization, so generally, most people are not aware of both sides of the issue and their automatic response is negative. Globalization is responsible for certain jobs losses by offering a cheaper alternative for companies in terms of labor. The effects of the job loss caused by globalization are mainly felt in the short run. Globalization in the domestic economy may lead to short run unemployment because of job loss, but contributes new jobs for the future. 

Globalization is especially strong when analyzing the impacts on the global economy. As countries globalize, they make the exchange of goods, services, and ideas easier across borders. As a result, all the countries that practice globalization benefit from each other because they are able to easily exchange with each other. Jerry Ellig explains how countries are able to mutually benefit from trading freely in his article “Why Free Trade Is Good for Consumers”. Ellig explains that globalization leads countries to produce what they specialize in and then engage in trading with other nations (Ellig 19). Becoming globalized will cause the total output of the world economy to rise because there will be so much trade. Not only does globalization provide economic growth, it also provides a way for societies to become more engaged in each other. Globalization causes countries to become more dependent on their trading partners. A negative impact of globalization on the global scale is that if a certain country specializes in a certain good and can no longer specialize in the production of that good, then all of their trading partners will feel the effects. Because globalization creates high dependence on other countries, this can be the case for all of the countries participating in the globalization process.

The effects of globalization on the domestic and world economies are similar to each other, however do contain some differences. In the domestic economy, globalization will cause short run unemployment because jobs will be transferred where labor is the cheapest. Although there will be unemployment, globalization allows for new ideas and practices to easily flow across borders, which creates new jobs in the long run. Globalization in the global economy will make the flow of goods and ideas easier, and contribute to an overall increase in total production. Globalization creates a very dependent global economy, which makes the likelihood of a global recession more possible.

After analyzing globalization and protectionism on a domestic and global scale, it becomes clear that the solution lies somewhere in the middle. The disagreement of whether to implement globalized policies or protectionist policies has cause friction between politicians and economists. Being able to implement components of both processes will cause the most benefit both the domestic and world economy. A solution to which theory is more beneficial is tough to implement, mainly because people either advocate for globalization or protectionism, there is no in between. By protecting industries that are vital to the economy and exporting the goods and services that those industries provide, the domestic and foreign economy will boom. Too much protectionism will lead to stagnant growth and complete exploitation of recourses and labor. Too much globalization can lead to high short term unemployment rates, and even high long term unemployment if there are too many jobs transferred to foreign locations. Allowing countries to globalize their economy can also have positive impacts on society by creating more interaction between people from different areas of the world. In the long run, there will be more domestic job growth, however jobs may be lost in the short run. Additionally, there will be more long term growth by globalizing the economy because new ideas and goods will be available to the public and there will be increased levels of innovation. It is clear that specialization in an economy can lead to economic success, which is an aspect from globalization that will benefit the population. Furthermore, the industry that is being specialized in will need to be protected by practicing protectionism in the given industry. By combining forces, globalization and protectionism will be able to not only benefit domestic economies, but the world economy by increasing the availability of new goods and services and protecting the area in which they were exported. The problem with implementing a solution is that in order to have long run growth, there may be a period of short run recession. Although domestic economies may suffer from a period of slowed economic growth, it will eventually lead to growth in the global and domestic economies. 

In conclusion, it is clear that both globalization and protectionism have positives and negatives. Protectionism may cause stagnant economic growth in the domestic and global economy, but is able to protect industries that are vital to economies around the world. On the other hand, globalization has the ability to increase productivity, innovation, and long run job growth; however, globalization may be fought by the public and cause short term unemployment in domestic economies. Keeping in mind both sides of the argument, it is easy to see that the solution to which policy offers better economic stability and growth lies somewhere in between the two policies. By marrying the two theories together and utilizing the positive aspects that come from each side of the debate, it is clear that the economic benefits are greater than either one of the theories can provide alone.
