When doom-mongers predicted that the Great Recession would lead to the vampire of 1930s protectionism rising from the dead, they may have been watching the wrong graveyard.
Since the global financial crisis struck in 2008, worldwide increases in import tariffs of the type seen during the Depression have been largely absent. But governments, richer with cash and regulatory power than in the 1930s, have found other ways to back their struggling producers at a time of deficient global demand. Disputes over state subsidies are spreading, the trade law to constrain them is not easy to use, and few governments can throw stones without worrying about the glass in their own houses.
Some interventions have been crisis-related, like the many bailouts of car and financial services industries – France continues to proffer aid to the troubled carmaker PSA Peugeot Citroën – but others predate the global recession. China, in particular, has for more than a decade raised hackles with an aggressive state-led growth model, supporting export industries with measures including direct subsidies, tax breaks, export credits, cheap land and electricity, and subsidised loans from state banks.