Saturday, 14 February 2009

What is wrong with protectionism?

Have you noticed how Gordon Brown and other world leaders have been banging on recently about the dangers of protectionism? Apparently, protectionism is bad and if we became protectionist that would make our difficult economic position even worse. Before we look at protectionism its worth remembering that these are the same leaders who supported the neo-liberal economic policies which have caused so much damage to people's lives recently - so would you trust them to get this right?

For these are the very same people who support globalisation, and globalisation is a system of economic imperialism in which the giant capitalist corporations loot the riches of poorer nations - minerals, oil, coffee, rubber etc - whilst being able to freely exploit their people as cheap labour. Globalisation is presented to us as an inevitable development of international and national economies, but there is nothing inevitable about it. Globalisation is maintained by capitalist rules enforced through the WTO, IMF and World Bank. Globalisation increases world poverty by moving wealth from the poor to the rich.

So what about protectionism? Well protectionism - trade and tariff barriers - was what made us - Americans and Western Europeans - relatively wealthy. We practiced it a century or so ago and built up our economies in the process. Now we seek to deny that opportunity to developing nations by forcing them to open up their markets to the big corporations and by privatising their infrastructure. No wonder Gordon and Co. are so keen on knocking protectionism. Protectionism is bad for capitalists but good for the developing world.

In a recent excellent Guardian article, Larry Elliot slayed the myth of the evils of protectionism and showed that it is necessary for economic development:

"The historical evidence is conclusive: free trade is good, protectionism is bad. Except that isn't what the evidence actually shows. The Cambridge economist Ha-Joon Chang has demonstrated that no country since the dawning of the modern age has managed to industrialise successfully without protectionism."

The same article showed that the infamous Smoot-Hawley tariff - oft quoted as worsening the Great Depression - did nothing of the kind.

The truth is that protectionism is bad for the economic exploitation inherent in the globalisation project. That is the real reason why Gordon and the G7 are against it. But countries have an absolute right to protect their economic infrastructure from the chill wind of capitalist exploitation and the race to the bottom in terms of labour and environmental standards. Cheap labour is simply unfair competition. We need fair trade, not free trade.


Anonymous said...

Lighten up, mate - it's Valentines Day....another excuse for us to be exploited?!


tapsearcher said...

We do need fair trade and not Free Trade. We also need to define what Free Trade is today. It is not really trade as historically defined and practiced.

So called Free Trade today is primarily centered on moving production from place to place anywhere on the planet for the sake of cheaper labor The real commodities involved are human beings who are put on a global trading block to compete with one another for the same jobs down to the lowest levels of wage slave and even child labor.

Raw Capitalism in a Free Market setting is ravaging the Free Enterprise system and local value added economies, we have enjoyed for centuries.

This all has to be added to the debate, otherwise we are comparing things in history that do not match up. The debate is useless until we define these differences. The closest thing in history to Free Trade was the slave trade.

See and mobile user friendly summary of articles based on The World is Flat by Ray Tapajna at