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.
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[edit] Original application
The term was originally devised to characterize policies of trying to cure domestic depression and unemployment by shifting effective demand away from imports onto domestically produced goods, either through tariffs and quotas on imports, or by competitive devaluation. The policy can be associated with mercantilism and neomercantilism and the resultant barriers to pan-national single markets.
According to economist Joan Robinson beggar-thy-neighbour policies were widely adopted by major economies during the Great Depression of the 1930s.[1]
Alan Deardorff has analyzed 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.[2]
An early appearance of the term, which presumably originates from the name of the Beggar-My-Neighbour card game, 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, Assurance Agents' Press, (Manchester), 1932.
Also today it is in widespread use, as seen in such publications as The Economist[3] and BBC News.[4]
[edit] Extended application
"Beggar thy neighbour" strategies of this kind don't apply only to countries: overgrazing provides another example, where the pursuit by individuals or groups of their own interests leads to problems. This dynamic has been called the "tragedy of the commons," though it appears as early as the works of Plato and Aristotle.
[edit] Other uses
The term has also been used as the title of a number of literary works:
- Gerard, Emily & 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, Arthur, Beggar My Neighbour: A Comedy in Three Acts, Evans Bros., (London), 1953.
- Macelwee, Patience, Beggar My Neighbour, Hodder and Stoughton, (London), 1956.
[edit] See also
- Currency war
- Protectionism
- Mercantilism
- Domestic policy
- Economic policy
- Monetary policy
- International trade
- Balance of trade
- Choum
[edit] References
- ^ Rothermund, Dietmar (1996). The Global impact of the Great Depression 1929–1939. Routledge. pp. 6–7. ISBN 0-415118190.
- ^ Deardorff, Alan V. (November 4, 1996). "An Economist's Overview of the World Trade Organization". The Emerging WTO System and Perspectives from East Asia. Joint U.S.-Korea Academic Studies. 7. Korea Economic Institute. http://www.fordschool.umich.edu/rsie/workingpapers/Papers376-400/r388.pdf.
- ^ "Beggar thy neighbour". The Economist. 25 January 2007. http://www.economist.com/finance/displaystory.cfm?story_id=8601486.
- ^ "CAP: Beggar thy neighbour". BBC News. 26 February 1999. http://news.bbc.co.uk/1/hi/business/the_economy/286761.stm.
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