The High Cost of Fear: Why Protectionism and Isolation Rarely Work

Throughout history, societies have often responded to crisis and uncertainty by retreating behind walls—literal and figurative. But while this instinct is understandable, the evidence shows it’s almost always counterproductive.



Take the infamous Smoot-Hawley tariff of 1930. Intended to protect American jobs, it instead triggered a global trade war, slashing world trade by a quarter and deepening the Great Depression. Or consider Tasmania, where isolation from the Australian mainland led to the loss of basic technologies and skills over centuries.

Isolation doesn’t just hurt economies—it erodes the very fabric of society. Closed societies lose the flow of new ideas, the spark of innovation, and the resilience that comes from diversity. Stagnation and decline often follow.

But the story doesn’t end there. Societies can—and do—recover when they reopen to the world. The lesson is clear: while openness can be risky, the price of fear is far higher. The future belongs to those who reach out, not those who shut down.