In the last issue Joe Pearce answered the Marxist case against import controls. In this issue he answers the capitalist case.
THE CAPITALIST case against protectionism was recently outlined in an article in the Daily Telegraph entitled “No Salvation In Import Controls”. The author of the article was Peter Lilley, the prospective Conservative candidate for St Albans and a consultant director of the Conservative Research Department. In this article Mr Lilley explained the orthodox laissez-faire approach towards international trade, an approach which is fully endorsed by official Conservative Party policy and fully supported by International Big Business.
However, on closer scrutiny, Lilley's arguments in favour of lifting all tariff barriers can be demolished with relative ease.
For instance, he starts his article by stating that a policy of selective import controls is “objectionable on three major grounds”.
“First,” he states, “he hardest-hit industries which would naturally be the beneficiaries of selective protection would, by definition, be the most costly and least worth saving”. This is absolute rubbish, since the “hardest-hit” industries are not, “by definition”, anything of the sort. Many of these industries could prosper and the firms concerned could become highly competitive within the national economy if they enjoyed protection from unfair foreign competition.
British industries can't compete with the cheap sweated labour employed in many Third World and Eastern bloc countries. However, to state that this "by definition" makes our industries too costly and not worth saving is tantamount to economic suicide. There are only two alternatives to the destruction of our industries by cheaper foreign labour costs. Either British workers must be paid the equivalent of "two bowls of rice a day" in order to become "competitive" with the coolie labour in the Far East, or else we must protect British industries by introducing import controls. The only third course, and the course which appears to be favoured by Mr Lilley, is the wholesale destruction of large sections of British industry.
The second capitalist argument against the raising of tariff barriers is that "selective protection on semi-finished and capital goods inevitably benefits the British manufacturer of such goods only at the expense of other British industries buying those goods. For example a tariff on imported steel will enable BSC to raise its steel prices. But as a result the car industry, a major steel user, will be made less competitive and demand tariffs of its own."
This statement by Mr Lilley is indeed true, excepting only that Mr Lilley thinks that this would be a bad thing when in fact it would be a good thing! The introduction of tariff on imported steel, or better still the exclusion of all steel imports, would save the steel industry from imminent destruction. The British car industry would then buy British steel instead of foreign steel. If that made British cars less competitive than foreign cars, the car industry would also have to be protected by tariff barriers. If this course of action was taken the British steel industry and the British car industry would prosper through mutual co-operation.
Mr Lilley's third argument against import controls is that "many of the most hard-hit industries are already receiving large subsidies. BSC is costing the taxpayer over ￡1 million a day".
This argument is absurd in the extreme; BSC needs to be subsidised because cheap steel imports are making it uncompetitive. If anything, this last statement is more of an argument for import controls than against them!
But Mr Lilley's case against import controls doesn't end there. He goes on to use the Common Market as another weapon in the Free Trade armoury: "So long as we remain members of the EEC it is nearly impossible for us unilaterally to raise our tariffs against non-members' goods and quite impossible to act against fellow members' goods."
This indeed is a very strong and very true argument and one which Peter Lilley might consider to be the ace in his hand. The introduction of widespread import controls will indeed be impossible while Britain is a member of the EEC, but if ever there were good arguments for pulling out of the Common Market then that surely is one of them!
Mr Lilley then states the old and often-used arguments against protectionism. He points out, for instance, that “in all probability as many jobs would be destroyed in the export industries as would be replaced in the import-replacing industries.”
However, this argument, like so many other arguments used by this Tory champion of Free Trade, is obviously very shallow. The fact remains that Britain imports far more than she exports and, as such, she stands to gain much more' from jobs created in the import replacing industries than she will lose from the export industries. This is particularly true when it is realised that many of the industries, which currently specialise in exports will not need to do so once a secure home market is available for them to sell their products in.
In conclusion, Mr Lilley states that “Britain now exports nearly half of its manufactured output - a higher proportion than nearly any other major country. It would be absurd for us to provoke others to exclude us from their markets.”
This argument can easily be demolished by countering that British manufacturers would gain far more from the increased size of the protected home market than they could ever lose from any loss in foreign markets caused by “retaliation”. However, another important factor arises out of this and some of Peter Lilley's earlier statements in favour of international free trade.
He envisages a British economy which is flooded with foreign imports, many of which may undermine Britain's own domestic industries. In this world of unlimited free trade the only way that Britain can pay for these imports is to frantically export as many of her own manufactured goods as possible. This will lead to a fully internationalised world economy of blind buying and selling; a world economy which can only benefit the barons of international capitalism at the expense of national sovereignty.
This may indeed be what Peter Lilley and the rest of the Conservative Party desire. They have always been the most devout and staunch defenders of international Big Business. But for those people who wish to see Britain an independent nation, capable of producing the goods she needs for her own survival, this is totally unacceptable.
Seen in this light, import controls are not only economically desirable, they are absolutely crucial to the maintainance of national sovereignty!