Beggar thy neighbour
In economics, a beggar-thy-neighbour policy is an economic policy through which one country attempts to remedy its economic problems by means that tend to worsen the economic problems of other countries.
Alan Deardorff has analysed beggar-thy-neighbour policies as an instance of the prisoner's dilemma known from game theory: each country individually has an incentive to follow such a policy, thereby making everyone (including themselves) worse off.[3]
Reconciling the dilemma of beggar-thy-neighbor policies involves realizing that trade is not a zero-sum game, but rather the comparative advantage of each economy offers real gains from trade for all.
An early 20th-century appearance of the term is seen in the title of a work on economics from the early period of the Great Depression:
- Gower, E. A., Beggar My Neighbour!: The Reply to the Rate Economy Ramp, Manchester: Assurance Agents' Press, 1932.
The phrase is in widespread use, as seen in such publications as The Economist[4] and BBC News.[5]
Extended application
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"Beggar thy neighbour" strategies of this kind are not limited to countries: overgrazing provides another example, where the pursuit by individuals or groups of their own interests leads to problems. This dynamic was dubbed the "tragedy of the commons" in an 1833 essay by British economist William Forster Lloyd,[6] though it appears as early as the works of Plato and Aristotle.
These trade policies can lead to
Other uses
The term has also been used as the title of a number of literary works:
- Gerard, Emily and Gerard, Dorothea, Beggar My Neighbour: A Novel, W. Blackwood and Sons (Edinburgh), 1882.
- Drew, Sarah, Beggar My Neighbour, J. M. Ousley & Son (London), 1922.
- Fielden, Lionel, Beggar My Neighbour, Secker and Warburg (London), 1943.
- Ridley, Arnold, Beggar My Neighbour: A Comedy in Three Acts, Evans Bros. (London), 1953.
- Macelwee, Patience, Beggar My Neighbour, Hodder and Stoughton (London), 1956.
See also
References
- ^ Adam Smith: An Inquiry into the Nature and Causes of the Wealth of Nations, Book IV, Chapter III (part II): "The sneaking arts of underling tradesmen are thus erected into political maxims for the conduct of a great empire ... . By such maxims as these, however, nations have been taught that their interest consisted in beggaring all their neighbours. Each nation has been made to look with an invidious eye upon the prosperity of all the nations with which it trades, and to consider their gain as its own loss. Commerce, which ought naturally to be, among nations, as among individuals, a bond of union and friendship, has become the most fertile source of discord and animosity."
- ISBN 0-415-11819-0.
- ^ Deardorff, Alan V. (November 4, 1996). "An Economist's Overview of the World Trade Organization". The Emerging WTO System and Perspectives from East Asia (PDF). Joint U.S.-Korea Academic Studies. Vol. 7. Korea Economic Institute.
- ^ "Beggar thy neighbour". The Economist. 25 January 2007.
- ^ "CAP: Beggar thy neighbour". BBC News. 26 February 1999.
- ^ Lloyd, William Forster (1833). Two lectures on the checks to population. England: Oxford University. Retrieved 2018-09-16.