There are many economists who find Keynesian theories obsolete and old school. Keynes's emphasis on increase in employment and government spending to boost the economy by creating multiplier effect has been criticized highly. However, if we look at today's world and see what the governments are doing, I think we owe an apology to Keynes. We are seeing many examples of governments imposing additional tariffs on particular products to protect their own industries from the effect of imports. These type of government actions helps these inefficient industries to survive which is against the nature of 'real' free market. Industries which needs to vanish continuing to produce with the help of governments. Does the government do good for society or just for the industry? Inefficient industries might not compete with their competitors in global market because of the differences in price. Citizens are being affected from the situation in very first place because the products are sold much higher than its real market price by the imposition of additional tariffs and protection of inefficient industries. Citizens are forced to pay more as a result of the government actions. We could say the Chinese-American Tire war is a significant example for this particular case. The US imposes additional tariffs to protect its own industry against cheap Chinese tires. The additional taxes protects the local manufacturing, but has huge impact on prices and real market prices.
In my opinion, a country cannot manufacture or service everything due to scarcity in resources. Therefore, the protection of US tire industry is against free market rules. If the industry is not able to compete with it other countries, I think there is no reasonable understanding to protect this inefficient industry by imposing additional taxes. In my opinion, US should stop protecting the tire industry and switch to different attention which they have competitive advantage on. There is no need to create Trade Wars in today's world. We should let countries or industries to do what they are good at without protecting our inefficient local ones. Otherwise, this trade war would keep going as today's wars such as chicken feet and tire wars. To sum up, I think the countries needs to say ` laissez-faire`and stop protecting their ' own ' industries and punishing their own citizens.
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