Wednesday, July 4, 2018

Barend Vlaardingerbroek: Protectionism – putting own people first

I’ll come out with it straight away: I’m a protectionist. I have always been a protectionist, and will always be a protectionist. You can now assemble a firing squad.

I’m not an economist, but then as Marx correctly (for once) pointed out, economics is a sphere of political/ideological activity – which is why you’ll find highly qualified economists backing every conceivable economic system on a very broad spectrum from laissez-faire capitalism to Stalinism.

Quite frankly, my first thoughts when presented with an ‘expert’ in economics (or anything else for that matter) are what ideological considerations are driving that person and whose pocket s/he may be in.
The 64 trillion dollar question: who’s benefiting?

An intuitive feel for economics is built into us humans. The simplest Stone Age village societies had an economy. People worked at providing not only their own needs but also at producing surpluses that could be bartered for commodities they were short of, sometimes with other people within their own communities, sometimes with people from other places. In the Highlands of PNG where I lived for almost a decade, Europeans first came on the scene in the 1930s. But there was already in existence a trading chain that connected those remote mountainous areas with the coast. Salt fetched a high price, as did little sea-shells that were used for, among others things, bride-price payments. The early gold prospectors paid their native labourers with those little shells and the value of them soon plummeted – in a word, inflation set in! When it comes to economics, it would indeed appear that “there is nothing new under the Sun”.
“From 50 to 200 giri-giri shells for one piglet? That’s not just inflation, it’s hyperinflation!”

Let me spin you an allegorical yarn. Once upon a time in the dim and distant past, a village chief found himself in a bit of a tight spot. There was a local stone axe industry, but traders from another village were offering stone axes at a very low price – a single animal hide as opposed to two hides which was the local rate of exchange. At first, this seemed to please most people. But then local stone axe makers started being laid off, which increased the community’s dependency burden and caused a lot of resentment. The chief started suspecting that the traders had an ulterior motive for offering axes at this low rate, namely to see the demise of the local stone axe industry with a view to creating dependence on their axes and then upping the price to three or four hides, and in the process gaining political leverage over his village. So to dissuade his people from buying those outside axes, he decreed that they should cost three hides while keeping the local ones at two. This ensured that his local stone axe industry would survive and continue employing lots of people, thereby avoiding the social ills that arise from unemployment, and keeping the village out of the clutches of external manipulators.

In modern language this chief was a protectionist, protecting his local stone axe industry by imposing a tariff on the imported product, and at the same time making sure that no outsiders could have him and his village over a barrel through reliance on continuing supply.

Roll the clock forward a few millennia, substitute President Trump for that village chief and steel and aluminium for stone axes, and you have a pretty good grasp of what Chief Donald did by slapping tariffs on imports of those metals, and the reasons for it. Other commodities have followed. (Alright, the analogy is not perfect, but let’s not spoil a good yarn!)

Protectionist measures have been a viable economic strategy for a long time. In Europe, they go back to at least the Middle Ages. For a developing economy with a fledgling industrial sector, protectionism is an essential – those nascent industries usually haven’t got a hope of surviving if they are in competition with imports from established outside mass producers. The same applies to economies recovering from devastation – Japan had one of most heavily protected economies for decades after WW2.

Protecting your productive sectors is a way of protecting your people’s livelihoods and your national sovereignty. It’s about putting your own nation – your own people – first. It’s nationalism in action in the economic domain.
Protectionist policies are needed to take on the globalisation juggernaut

But nationalism too has become a dirty word. The anti-protectionist position is an expression of the anti-nation-state stance that has gained currency over the past couple of decades: the view that the nation-state is not, or should not be, the fundamental  unit of geopolitical organisation. To the globalist power-brokers, nation-states give people too much control over their own destinies. Protectionism as a handmaiden of nationalism  is anathema to globalisation, the economic cutting edge of the insidious control-seeking globalist ideology.

Sure, it makes sense for nations that trade heavily with one another to form free-trade blocs. But it’s a quantum leap from those to situations where neo-feudal systems such as China can flood the world with goods made in factories manned by workers who work for pittances, and drive the rest of us into indebtedness while our own industries and workforces become idle (those that they don’t end up taking control of). I’m not suggesting that globalisation is a Chinese plot, but they sure know how to benefit from it at the expense of most of the rest of us.

Yep, globalisation enhances prosperity all round. These workers slave away for 10-12 hours daily for around NZ$100/week. Meanwhile, workers they have displaced in Western countries queue up for the dole. Now that’s what you call progress.

Protectionist measures will have adverse effects, the globalisation lobby warns us. And of course this becomes a self-fulfilling prophecy when those saying so have the means to bring those adverse effects about.

To return to our parable, the other village could retaliate by slapping a tariff on hides bought from our wise chief’s village, or flood the regional market with their own cheap-and-nasty hides to pull the rug from under the hide traders from our chief’s lot. They would be cutting deals left, right and centre in an attempt to isolate our good chief’s economy with a view to bringing him to heel and making him accept trade arrangements to his village’s detriment. The term ‘trade war’ is of historically recent origin, but I’ll bet it fundamentally goes back to the Stone Age just like inflation does. What has changed between then and now is the scale on which it happens.

I am a protectionist because I believe in the nation-state and putting your own people first. I am a protectionist because I am a nationalist. Ultimately, it’s all a matter of national sovereignty – something that the globalists are out to undermine.

But they have met their match in Donald Trump. ‘The Donald’ will put America first – and so, as elected leader of that country, he jolly well should. Many a European nationalist political movement is likewise returning to the paradigm of “Own country/own people first”, and electorates are responding positively. Here’s hoping the trend continues and is translated into economic action through effective protectionist policies.

Barend Vlaardingerbroek BA, BSc, BEdSt, PGDipLaws, MAppSc, PhD is an associate professor of education at the American University of Beirut and is a regular commentator on social and political issues. Feedback welcome at 

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