From the US to Britain, politicians are trading threats of imposing measures to protect “their” national industries.
Donald Trump boasted on Twitter that “tariffs are the greatest” ahead of a summit with European Union (EU) supremo Jean Claude Junker last week.
Trump has already slapped a levy of 25 percent on imports of steel and 10 percent on aluminium from Europe.
And Junker was planning a £15 billion package of tariffs on US imports—on top of recent ones on whiskey, motorcycles and peanuts.
He also warned Tory Brexit secretary Dominic Raab that a free trade deal was not guaranteed after Britain left the EU.
Other cabinet ministers scrambled around to reassure businesses they would still be able to maintain tariff-free trade.
These threats are sending shockwaves through global capitalism—and confusion on the left over how to respond.
The likes of the Tories, Trump and Junker have never tried to look out for the interests of working class people.
But apologists for free market policies have denounced protectionist measures, such as tariffs, as harmful for global capitalism.
And arguments for protectionism are often cloaked in rhetoric about protecting workers’ wages, terms and conditions and jobs from international competition and cheaper labour abroad.
This means that some socialists and trade union leaders in Britain go along with forms of protectionism. They see protectionist measures as an alternative to the ravages of free market shock therapy.
From the 1980s, the US and British ruling classes have spearheaded an assault on working class living standards to restore profitability.
Inequality has spiralled, workers’ wages have stagnated and manufacturing bosses have slashed jobs.
Trade liberalisation has been a big a part of the drive for free market reforms. One of Margaret Thatcher’s biggest achievements for the bosses was taking Britain into the European Single Market.
As part of the fight against the Tories and bosses’ attacks, many socialists have focussed on job losses in manufacturing through free trade.
This was in evident in Jeremy Corbyn’s “Build it in Britain” speech to the bosses’ Institute of Directors last Tuesday.
He promised to “reprogramme our economy so that it stops working for the few and begins working for the many”.
But the bulk of the speech was about supporting British capitalism against international competition. “We’ve been told that it’s good, even advanced, for our country to manufacture less and less and to rely instead on cheap labour abroad to produce imports,” he said.
And while Corbyn shied away from calling for import controls, he outlined other protectionist measures.
But protectionism is no socialist alternative to global capitalism.
Protectionism is no socialist alternative to global capitalism ... protectionism assumes that bosses and workers in one country have the same interests—interests which are different and possibly hostile to workers elsewhere
The first problem is that import controls and other forms of protectionism don’t protect jobs. And, secondly, protectionism assumes that bosses and workers in one country have the same interests—interests which are different and possibly hostile to workers elsewhere.
In the middle of a global depression, British tariffs were introduced in 1931 on “basic industries”—coal, iron and steel, ship building and textiles.
Two years before tariffs were introduced some 2.3 million workers were employed in the basic industries. After eight years of protectionism, only 1.8 million worked in them.
And the level of unemployment in these industries was double the general rate of unemployment in Britain in the 1930s.
The British state introducing tariffs was part of a broader shift towards economic nationalism in the 1930s. The liberal apologists for capitalism still point to that period—and warn that the likes of Trump are returning to it.
They argue that the unemployment of the 1930s shows free trade benefits working class people by generating jobs. This is rubbish.
The loss of jobs took place against the backdrop of capitalist crisis. This was triggered by a general crisis of profitability, not international trade policy.
And the loss of jobs in the heavy industries in particular was part of broader trend within capitalism to shift from manufacturing to service sector jobs.
The proportion working in manufacturing in Britain peaked at around 40 percent in 1911.
Apart from a brief bump during the Second World War, the proportion has continued to decline to around 10 percent today.
Capitalists face constant competition from their rivals to grab as much profit as possible.
This forces them to plough investments into more efficient methods of production, whether that’s the latest machine or IT equipment.
And doing so raises the productivity of labour, meaning that fewer workers can produce the same amount or more output.
This has seen the number of manufacturing workers in Britain dramatically drop to 2.6 million. But at the same time British capitalism is still the eighth largest manufacturer in the world and could break into the top five by 2020.
Protectionist measures wouldn’t stop this process—only a planned economy without a profit motive would.
The steel crisis of 2016 also shows the danger of socialists and unions backing protectionism. Alongside doing nothing to save jobs, it opens the door to chauvinism and divides the working class.
During the industry crisis, the Unite, Community and the GMB steel workers’ unions blamed China “dumping” steel onto the European markets. They called for tariffs against foreign steel and tax relief to protect the bosses’ profits.
Only a planned economy without a profit motive would be able to stop the decline in manufacturing jobs
Unite deputy general secretary Tony Burke wrote, “The continued failure to agree to tariffs for Chinese steel reflects really badly on the UK government.”
Unite sharply changed its tune on tariffs after Trump imposed them on European steel. Unite national officer for steel Tony Brady said, “Any tariffs imposed on UK steel by President Trump on a scale that is being mooted would be misguided,
“They deprive US manufacturers of some of the most specialist steel in the world.”
Unite said it’s talking to US steel workers’ unions about Trump’s tariffs, but the AFL-CIO union federation has backed Trump.
AFL-CIO president Richard Trumka “applauded the administration’s efforts.”
“This is a great first step toward addressing trade cheating,” he said. “And we will continue to work with the administration on rewriting trade rules to benefit working people."
Each union is backing their own national capitalist state and looking to social partnership with the bosses. British workers are encouraged to defend “British jobs”, American workers to fight for “American jobs”.
Corbyn might not want to take it, but there’s only a small step from arguing for “build it in Britain” to former Labour prime minister Gordon Brown’s “British jobs for British workers”.
This was enthusiastically taken up by the British National Party and every racist around. It threatened to divide every workplace between those who were born in Britain and those who were not.
We need to fight together against the international capitalist order.
Instead of championing economic nationalism or neoliberal fake internationalism, socialists should argue for public ownership under democratic control.
That’s the real alternative to lining up with “our” bosses.
Jeremy Corbyn says that Robert Tressell’s famous book Ragged Trousered Philanthropists “first inspired my politics”.
There’s a passage in the book where Owen, the central character, says, “We’ve had free trade for the last 50 years and to-day most people are living in a condition of more or less abject poverty, and thousands are literally starving.
“When we had protection things were worse still. Other countries have protection and yet many of their people are glad to come here and work for starvation wages.
“The only difference between free trade and protection is that under certain circumstances one might be a little worse than the other, but as remedies for poverty neither of them are of any real use whatever, for the simple reason that they do not deal with the real causes of poverty.”
Today we have a truly global working class, with wage labourers as the majority of the world’s population.
That gives our side immense potential power in the fight to transform global capitalism into an international socialist order.