Can protectionism exist in a purely capitalist economy?
No it can not. However, there is no such thing as a “purely capitalist economy”. Because most economies today are mixed economies, “capitalism” does not precisely describe most contemporary economies, due to these economies containing both private-owned and state-owned enterprises, or that combines elements of capitalism and socialism, or a mix of market economy and planned Adam Smith’s advocacy of letting a free market control production and price, and allocate resources. In 2004 Alan Greenspan wrote, “For the most part, we as a nation have not engaged in significant and widespread protectionism for more than five decades. The consequences of moving in that direction in today’s far more globalized financial world could be unexpectedly destabilizing. A likely fall in wage incomes and profits could lead — ironically — to a fall in jobs and job security in the shorter term. So yes, we can shut out part or all foreign competition, but we would pay a price for doing so — perhaps a rather l
