Actually, all the major economic powers got there by means of protectionism. Economic liberalism is nice when you're already at the top.
Comfort and suffering seem to go hand in hand. Subsidized rice creates a surplus, which floods the market, which [seemingly paradoxically, but not really] results in famine in Haiti.
[1] - http://www.salon.com/2014/09/07/we_still_lie_about_slavery_h...
It seems like protectionism would help in this case, by creating a market that can only be satisfied by domestic industries. And since there's a spectrum from this case to more realistic cases, there's also a spectrum of usefulness for protectionism. Does that make sense?
I'd imagine, if they provide something unique, they can succeed. However, if it's (for example) a commodity industry, they're unlikely to have faced the same pressure to become efficient that their new competitors have.
Although, on the flip side, that timeline sounds excellent for growing a monopoly-busting competitor. (E.g. what my understanding is that the French do from time-to-time)
Ricardian comparative advantage always applies when ignoring transaction costs; reducing transaction costs for any given set of transactions (e.g., by eliminating formal restrictions on capital movement) increases (rather than reduces) the likelihood that Ricardian comparative advantage applies.
(If you want an extreme case in which Ricardian comparative advantage to fails to apply, you need to assume extreme transaction costs -- one of the canonical hypothetical examples where this is argued to the case is an interstellar civilization without FTL travel.)
1) England can produce a unit of cloth for 100 units of labor, and a unit of wine for 120 units of labor. Portugal can produce a unit of cloth for 90 units of labor, and a unit of wine for 80 units of labor. Portugal has absolute advantage in both goods, but England has a comparative advantage in cloth. By the standard Ricardian argument, we get lots of trade and happiness.
2) Now let's change the situation slightly. Replace all occurrences of "units of labor" with "units of capital", and assume that capital can move freely between countries. We've lost the key component of comparative advantage, the idea that producing a good forces you to "forgo" producing some other good. Everyone just produces everything in Portugal, and England dies. Whoops!
3) Now allow England to set up protectionism, so that all wine consumed in England must be locally produced. This way it can survive. Not very nicely, but between (2) and (3) I'd choose (3) every time.
Am I missing something?
If you look at actual neoliberal trade, a lot of production of goods (and even services, to the extent that they can be provided remotely) moves to the peripheries, but the core's comparative advantage becomes in renting out surplus capital (which produces even more surplus capital to rent out). That is, the developed world in actual neoliberal trade with free capital movement are the countries that are like England in your example.
Why? Because nature abhors a vacuum? :-)
As far as I can tell, production doesn't really move to the poorest countries like the one in my example. It seems that it moves to countries that have an absolute (not just comparative) advantage in manufacturing costs.
Well, because "England" and "Portugal", on the level that Ricardian comparative advantage really works, aren't really countries, but sets of people (and, really, the comparative advantage really exists on the individual level, its existence between sets of people is simply an aggregate of its individual existence.)
Absent an external actor using force to compel an involuntary transfer, productive capital moving from person E to person P requires some item(s) of value moving to E such that the value to E justifies surrendering the capital.
I would argue the US' protection from the ravages of WW1 and WW2 led to its economic power. Before WW1 the US wasn't a major player on the international stage.
EX: The first cotton gin was patented in 1793 which is 68 years before the American civil war. But, with cheap labor there is little pressure to improve it. http://en.wikipedia.org/wiki/Cotton_gin Sadly, it ended up increasing slavery in the south by making it more profitable, where a modern farm uses far less labor the south simply doubled down on cheap labor.
PS: There is actually a fair amount of evidence that Slavery significantly reduced US economic growth over time. Paid workers keep more of their output which is a non-issue from an overall economic standpoint, but they need far less supervision which is a large boon. There also more mobile and easier to fire and higher as needs change.
So ya, maybe by the mid-1800, additional forces were established. But the only reason that was a possibility was because, from the 1500s onward, people wanted to (and did) exploited the fertile soil. It's like taking a snapshot of 1979 and saying Michael Corleone was a legitimate business man.
Also, there was other crappy stuff going on beyond slavery (but slavery-like). The building of the transcontinental railroad. Taxes on non-US citizens (with restrictions on what races could become US-citizens).
The US did that after several centuries of economony building with huge protectionism and slavery. And remained there by using their army to ensure cheap resources, favorable contracts, lackeys in place in subservient countries, etc. The environment to create the "advanced tech" comes from that.
Similarly the UK and France become major economic powers by enslaving half the globe with their military. Their great "tech" and such come after the colonies, not before.
It was technological advantages that enabled them to enslave half the globe with their military.
Nothing to write home about, tech wise.
I am not sure if the US had, on average, higher tariffs while it was developing than other countries. The US really became passionate politically about free trade after the great depression. Many economists felt that the depression was made much worse by protectionism that undermined world trade.