Protect British Industry From Imports!
ANSWERING THE MARXIST CASE AGAINST IMPORT CONTROLS
By JOE PEARCE
MARXISM is supposed to be the opposite of capitalism. Yet, like their capitalist counterparts, many Marxists openly condemn the introduction of import controls.
The Marxist case against protectionism is exemplified in a booklet produced by the Socialist Workers Party entitled Why Import Controls Won't Save Jobs.
Right from the start this booklet attempts to blur the real issue behind the call for import controls. It states quite correctly that "at least half of British exports depend on originally imported materials". However, it then goes on to conclude that "this fact means that every expansion of British output will produce an increase in imports... That is why increases in imports today usually go with increasing exports - the one is necessarily dovetailed with the other. If you tried to stop imports, British output - and jobs - would be massacred." This last statement is utter rubbish, deliberately designed to cloud over the real issues and mislead the reader. The fact is that the imports they are referring to in this passage are the raw materials needed for British manufacturing industry. Nobody has ever suggested that the raw materials needed for manufacturing industry should be stopped. The only imports which threaten jobs are manufactured goods and it is these which the advocates of protectionism seek to control, not the raw materials required by industry.
This false reasoning is continued a few paragraphs further on when the writers state that "if companies are prevented from importing, either they go bust because they cannot produce as cheaply as foreign competitors, or they have to be subsidised to an even greater extent than before". This passage is rather vague as to whether the imports concerned in this case are raw materials or components, but either way the statement is inaccurate. If the imports concerned are raw materials it won't be a question of not being able to produce "as cheaply as foreign competitors" because they will simply not be able to produce anything at all! This may sound obvious enough, but since the authors of this booklet don't appear to differentiate between raw material imports and manufactured imports it is necessary for us to do so.
However, if the imports concerned in this case are components and not raw materials it is both inaccurate and self-contradictory. Manufactured components would only be kept out if the same components were being or could be produced in this country, in which case British industry would buy the components from a British company instead of importing them. And if foreign goods were kept out by widespread import controls there wouldn't be any foreign competitors for British companies to compete with. British industry would not “go bust because they cannot produce as cheaply as foreign competitors” or “have to be subsidised to an even greater extent than before”. The statement argues against import controls from a standpoint which assumes economic conditions which exist only when there aren't any!
This same deceitful and illogical reasoning continues in the very first paragraph of the following chapter: "Increased imports may be going into British factories as the raw materials or the components needed for increased production - they may therefore mean more and not fewer jobs."
This argument, as already explained, is so stupid that one must conclude that the writers are either completely naive as to the real facts of economic life or ― which is more likely ― they are cynically attempting to obscure the issue for their own ends.
The Socialist Workers Party policy booklet, Why Import Controls Won't Save Jobs, is remarkably similar to the Conservative Party Manifesto!
What these ends may be and why they necessitate the clouding of the real issues concerning import controls will be discussed later. First, it is useful to note some of the other arguments the SWP uses against the raising of tariffs and the stopping of imports.
The argument advanced on page seven of the SWP booklet is identical to the argument put forward on page fifteen of the 1979 Conservative Manifesto, i.e. that import controls lead to higher prices. Besides noting with interest the similarity in policy between Trotskyites and Tories on this matter, it is absolutely crucial that we nail the lie that protectionism necessarily leads to price inflation.
To quote the SWP booklet: "Import controls automatically mean increased prices in the shops. The cheap imported goods are now either no longer there, or they're more expensive because there's import duty on them".
On the surface, this sounds like a strong argument, and it is one which has led to many people believing that import controls aren't practical. It is, however, not true since price levels can only be measured relative to wage levels. Something costing ￡1 in the shops is cheaper, in real terms, to somebody earning ￡100 a week than to somebody earning ￡50 a week. Therefore, any increase in prices which may be caused by the introduction of import controls will have to be measured against the increase in the nation's wealth and the reduction of unemployment which will undoubtedly come about following a programme of protectionism.
This can be seen even more clearly when one takes into account the effects which free trade is having on the British economy. If imports are allowed to continually flood into Britain, more and more industries will be destroyed and more British workers will find themselves on the dole queue. Meanwhile, the wages of those people still lucky enough to have a job will be kept down by the economic recession thus caused. In such circumstances the average wage will be considerably lower, in real terms, than it would be in a fully protected economy.
Remarkable similarities also exist between Trotskyites and Tories on the subject of whether import controls will save jobs. For instance, the SWP booklet states that “what workers in British companies protected by import controls gain, workers in British exporting companies lose” (page seven). This is identical in meaning, if not in wording, to Tory candidate Peter Lilley's allegation that “as many jobs would be destroyed in the export industries as would be replaced in the import-replacing industries”.
The SWP booklet further states on page eight that “jobs in agriculture fell from 1,340,000 in 1940 to 748,000 in 1970, despite all the import controls and the very big increase in output per worker”. This exposes a great deal of ignorance on the part of the authors as to the reason behind the decline in the numbers of agricultural workers in Britain. This decline was caused by mechanisation (hence the increase in output per worker), amalgamation and, last but not least, not enough import controls!
But if all the arguments employed by the authors of the SWP booklet are easily exposed as being shallow, one of the statements on page eleven is even more shallow and naive than the rest put together: “Because the Third World capitalists are relatively small compared to the giants of the world economic system, their bargaining power in the world market is relatively weak, and they are the first to be pushed out.”
Obviously the economic gurus of the SWP are not aware that these “relatively small” Third World manufacturing sweatshops are merely newly established subsidiaries of the big multi-national companies, “the giants of the world economic system”!
And this brings us back to the earlier point about whether the SWP are using these shallow arguments as a cynical attempt to cloud over the imports issue for their own ends. It is hard to believe that the leading economic theorists in the SWP are so stupid that they are not aware that multinationals control the bulk of the expanding Third World industries. Similarly, it is hard to believe that they don't realise that many of their other arguments against import controls are false.
There is, therefore, another reason for the SWP's support for international free trade, and it lies squarely in the very essence of their ideology. As Trotskyites they believe that their Marxist revolution must be an international revolution, and they reiterate this point in the last paragraph of the booklet: “More than 130 years ago, Karl Marx made the call: 'Workers of the world unite!' He was right then, and today that call is more relevant than ever before. The world is one world with one working class.”
That, in a nutshell, is the explanation for the SWP's opposition to import controls. They, like the capitalists, are internationalists, and import controls, by definition, are specifically national. Import controls have the effect of strengthening national sovereignty, while communists and capitalists alike seek to destroy it.