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. Adam Smith made reference to the term in claiming that mercantilist economic doctrine taught nations "that their interest lies in beggaring all their neighbours". The term was originally devised to characterise 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. 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. 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 and BBC News. Race to the bottom "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, though it appears as early as the works of Plato and Aristotle.