In a piece entitled On FreeTrade in January here I raised the option of protection of what’s left of our industry. This article develops the idea a little more. Yes yes I know it’s boring old economics again, but we’d better realise that it’s on the economy that elections are won or lost. And it isn’t difficult.
And yes protectionismgoes against every convention, every politician’s certainty. ‘Free trade’ is parroted around as though it were the eleventh commandment, and any country which doesn’t go along with it will be heaped with the world’s opprobrium and made an outcast among the nations. It’s also one of the great shibboleths of liberal economics; on which even most of the Left seem to agree with the bastions of capitalism: any miscreant indulging in protectionism will not only bring ruin on themselves, but, through contagion, everybody else as well. And our own UKIP Thatcherites get very worked up if such nostrums are challenged, despite all the evidence that ‘free-market’ economics is failing.
It’s a shibboleth because it isn’t true. Prosperity does not have to depend on overseas trade, and the very term ‘free trade’ gets distorted, the whole idea elevated beyond reason. It might literally mean trade with absolutely no impediments, but rarely has this occurred in history, at least between free peoples, and even less today. Historically Britain was not slow to slap tariffs on industrial imports when they threatened home production. Individual nations and trading blocs use them all the time in one form or another to suit themselves. Even the WTO allows an element of domestic protection. In practice ‘free trade’ is a mish-mash and the term banded about with little common understanding. It means all things to all men, depending on context and purpose.
What prosperity depends on is indeed trade and industry, but the trade does not have to be external. Exports of course help with the balance of payments and current account, and nobody wants to set retaliation off, but we have long passed the stage where it means we would automatically come off worse. A country that now makes so little and is forced to over-depend on its financial services is hardly laying the foundations of long-term solvency. There are many things that need to be done with our economy, but getting manufacturing going again and reducing imports and dependence on the City of London must be a central part of any strategyof regeneration, and a judicious element of tariff protection is an essential ingredient. The domestic demand of over 65 million people is enormous yet is being largely satisfied by other countries.
External trade should be mutually beneficial. In practice the degree of its being really ‘free’ or equal, as opposed to limited in some way, reflects a country’s situation and its interests. There are many areas where we could agree mutually advantageous arrangements with our friends, some of whom are in a similar situation to ourselves. Putting up selective tariffs for many other goods and services from elsewhere is not going to cause lasting harm to total global demand, and trade will always continue. It is a matter of proportion, but the priority must be to increase self-sufficiency, and it should be only one part of a national economic strategy to improve productivity as well as production. It is hard to see how any country like UK, in such dire straits through decades of economic mismanagement, could possibly be any worse off if we started to take a rather more nationalistic view of our self-interest.
We protect agriculture. Subsidies reduce prices and ensure standards, but they also give jobs. If we want to see cows in fields and the countryside managed well, then we’d better carry on protecting it.
So why not also strategic manufacturing, or energy generation, or London property, or British companies? Other countries do, by hook or crook. Why is it always us who seem to think we have to let everybody else plunder our home market and take over the very means of production and wealth on which we and our descendants depend? Is it a warped sense of noblesse oblige? Is it a commitment to ‘globalism’ in this age of over-vaunted inter-dependence? Is it unquestioning pursuit of liberal economics despite its record, including by most of our own UKIP hierarchy? Is it a horror of anything smacking of nationalism, notwithstanding Germany clearly winning the peace and imposing its hegemony over Europe, or the tricks the French get up to in protecting their own industry, or the myriad problems arising from allowing foreigners to buy up central London? I’d say it’s all those things and a few more.
Do we seriously think we can go on as weare? With our pathetically low productivity, low skills, low investment, ever-burgeoning national debt? Do we have no more ambition than to let others buy us up and take charge? Why should anything change unless we start doing things differently, take our destiny in our hands and use our own resources to meet our own needs?
What is the environmental cost of all this international trade? Why is it apparently so essential that we import meat and corn, yet export them too? What is it exactly that all those Polish lorriesare carrying on our roads? How many more green fields can we lose to white sheds? Why do we allow the car industry to carry on with its globalised ways and dictate what they find acceptable or not with our national trade policy?
Then there’s the politics. A degree of protectionism as part of a broader nationalistic economic strategy is just what’s needed to widen our appeal. It would be a popular and unique selling point –controversial, but then UKIP certainly needs the attention, and on something different. And it’s on the economy that we have the best chance to actually achieve power or influence.
UKIP leadership candidates would be wise to give this some thought.