The problems with protectionism are many. By simply keeping out foreign goods without attacking the power of U.S. corporations, protectionism merely strengthens U.S. corporations, who then have a monopoly on the U.S. consumer market. Of course, stronger corporations are a danger to U.S. workers' standard of living.
Protectionism also increases international conflicts. The world economy is arranged in such a way -- with U.S. government encouragement -- that many countries are "export-based economies:" they are set up to export goods to countries like the U.S., the most valued consumer market on the planet. This global arrangement has "free-trade" at its foundation: if the U.S. erects trade barriers and keeps out foreign goods, export-based economies are adversely affected, and they interpret such an act as an "economic act of war," with retaliation to be expected. History shows that economic warfare often leads to the military type of warfare.
More importantly, protectionism intellectually disarms American workers, who are naturally skeptical of U.S. corporations' intentions. Protectionism attempts to bind workers interests with "their" corporations, in the same way that corporations attempt to use "profit sharing" to give workers encouragement to work harder, not form unions, and see their interests as entirely the same as those of their employers.
President Ronald Reagan attempted to do the same in his "trickle down" economic theory;the less we tax the corporations, he claimed, and the less we demand from them in wages, the higher their profits will be and the more happy they will be to share with workers. It's a lie, of course. But such lies form the basis of protectionist policy; workers should team up with U.S. corporations against foreign companies, so that, presumably, more U.S. jobs will be saved.
The current recession has shown how eager U.S. companies are to save jobs. If corporations can make more profits with fewer workers who work longer with less pay, they'll do it without a second thought. Likewise, if protectionist policies provide privileges to U.S. corporate monopolies, they'll have only U.S. workers standing in their way to even higher profits.
A similar scenario played itself out a hundred years ago, when American unions teamed up with the "good" corporations who first allowed a unionized workforce. When the "bad" companies were defeated, leaving the "good" companies without competitors, the labor/company "partnership" was abruptly ended with corporate attacks on unions.
Today, this modern equivalent is manifest in the Alliance of American Manufacturing (AAM), an organization where giant corporations and U.S. labor unions come under one roof to advocate protectionist policies (most notably anti-China policies).
The AAM attempts to distract American workers away from their native corporations towards an oversea's scapegoat. This unholy alliance will likely end if Chinese corporations are pushed out of the U.S. market, leaving workers and corporations to battle openly over wages vs. profits.
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