Protectionism in an era of free trade and globalisation is seen as bad news. It is regarded as a prelude to war. The Second World War was preceded by a raising of economic drawbridges across the world. This was a response by some governments to the global crash of 1929 and the Depression that followed.
In this context Donald Trump’s imposition of tariffs on Chinese goods is viewed by some with alarm. But then every single Republican incumbent of the Oval Office after Eisenhower has been accused of being a warmonger. So the accusation is more of a tradition than it is accurate. People forget that Nixon started the process to end US involvement in Vietnam, and that the Korean War ended on Eisenhower’s watch. The Cold War finally wound down and came to an end under Republican presidents. Bush was provoked into war by foreign-originated attacks. So all we are hearing is the traditional non-stop bleating of Left-wing losers.
There is, however, a moral argument to Donald Trump’s action, not the least his objection to China’s ongoing theft of American intellectual property.
Cheap labour is exploited in corrupt dictatorships. The West benefits greatly from the fact that China and other countries do not have powerful lobbies for workplace safety and wages that would drive up the costs of production. Consumer goods are now relatively low-priced. But there is a human cost that is routinely ignored even by the the most active socialist, ideologically programmed with a data feed from Momentum or some such group through a Chinese-manufactured mobile phone.
China and other developing countries are having their 19th Century 200 years after ours, where the peasants are migrating into the smokestack cities in search of work. What has yet to emerge seems to be politicians who see the need for intervention to improve workplace rights and safety, even for people who are unable to cast a vote, and for organised labour to campaign for better conditions and remuneration. The irony is that while Labour hates Saudi Arabia, it ignores the state of labour relations in the newly-industrialised developing countries, whose low-priced products prevent competitive manufacturing in the UK, and thus cost the UK jobs amongst people who could support Labour. And this is from a party that is openly internationalist. It campaigns to boycott Israel over state actions in self-defence but does nothing over China where the one-party state will deploy tanks to prevent its own people from enjoying political debate and human rights.
A ‘labour rights tariff’ would attract support, and would not be protectionist. We do see this in how some clothing stores take steps to ensure their overseas suppliers do not exploit workforces, but it is badly enforced. There seems to be ‘fairtrade’ in agricultural commodities, but not manufactured goods. This is despite the existence of the International Labour Organisation and similar agencies. Prices would go up, but this would mean it would be economic to bring jobs back to the UK.
Trump has had enough, and this is part of his plan to bring decent jobs back to the USA. He is, in effect, imposing a tax on goods which should have been sold for more if the employers of the workers that produced them paid those workers a decent wage and guaranteed safe working conditions. If overseas manufacturers charge more for their goods, and pass the extra money made on to their workforce, Trump will have succeeded. In the meantime, decent and safe jobs will be created in the USA.
Paying overseas workers a decent wage is not just an area of campaign for the unions. Henry Ford bucked the trend of US car manufacturers by paying relatively high wages. The effect was that he could retain the best workers and they would work well to hold on to their jobs. Ford also demanded and got high levels of personal propriety. Because his workers had higher wages, they were able to live better and buy more, stimulating economic activity. This was ‘trickle-down economics’ and a voluntary redistribution of wealth by a capitalist without any state intervention. Developing countries could also do this. It worked for Henry Ford and helped make the USA the world’s greatest economic power.
It does seem strange that ‘internationalist’ socialists in the UK do not campaign for labour rights overseas that would increase the competitiveness of the UK manufacturers by increasing the manufacturing cost elsewhere. Instead they campaign for protectionism to maximise the bargaining power of the unions, by preventing imports that could replace local goods should there be a strike. In the 1970s British Leyland went bust for a number of reasons, not least very poor industrial relations. The succession of strikes meant that frustrated car-buyers would purchase reliable Datsun Sunnys if they could not, or would not, buy Morris Marinas of questionable quality. If they had got their way, the unions would have stopped the import of Datsuns, creating a captive market shorn of innovative competition.
Socialists are missing a trick here by failing to remind people of the true cost of imported manufactured goods. It is strange that they fail to do so.
Trump is leading the way. Workers in the USA and developing countries may stand to benefit from his actions.