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A CASE FOR PROTECTIONISM

In a piece entitled On FreeTrade in January here I raised the option of protection of what’s left of our industry. This article develops the idea a little more. Yes yes I know it’s boring old economics again, but we’d better realise that it’s on the economy that elections are won or lost. And it isn’t difficult.

And yes protectionismgoes against every convention, every politician’s certainty. ‘Free trade’ is parroted around as though it were the eleventh commandment, and any country which doesn’t go along with it will be heaped with the world’s opprobrium and made an outcast among the nations. It’s also one of the great shibboleths of liberal economics; on which even most of the Left seem to agree with the bastions of capitalism: any miscreant indulging in protectionism will not only bring ruin on themselves, but, through contagion, everybody else as well. And our own UKIP Thatcherites get very worked up if such nostrums are challenged, despite all the evidence that ‘free-market’ economics is failing.

It’s a shibboleth because it isn’t true. Prosperity does not have to depend on overseas trade, and the very term ‘free trade’ gets distorted, the whole idea elevated beyond reason. It might literally mean trade with absolutely no impediments, but rarely has this occurred in history, at least between free peoples, and even less today. Historically Britain was not slow to slap tariffs on industrial imports when they threatened home production. Individual nations and trading blocs use them all the time in one form or another to suit themselves.  Even the WTO allows an element of domestic protection. In practice ‘free trade’ is a mish-mash and the term banded about with little common understanding. It means all things to all men, depending on context and purpose.

What prosperity depends on is indeed trade and industry, but the trade does not have to be external.   Exports of course help with the balance of payments and current account, and nobody wants to set retaliation off, but we have long passed the stage where it means we would automatically come off worse. A country that now makes so little and is forced to over-depend on its financial services is hardly laying the foundations of long-term solvency. There are many things that need to be done with our economy, but getting manufacturing going again and reducing imports and dependence on the City of London must be a central part of any strategyof regeneration, and a judicious element of tariff protection is an essential ingredient. The domestic demand of over 65 million people is enormous yet is being largely satisfied by other countries.

External trade should be mutually beneficial. In practice the degree of its being really ‘free’ or equal, as opposed to limited in some way, reflects a country’s situation and its interests. There are many areas where we could agree mutually advantageous arrangements with our friends, some of whom are in a similar situation to ourselves. Putting up selective tariffs for many other goods and services from elsewhere is not going to cause lasting harm to total global demand, and trade will always continue. It is a matter of proportion, but the priority must be to increase self-sufficiency, and it should be only one part of a national economic strategy to improve productivity as well as production. It is hard to see how any country like UK, in such dire straits through decades of economic mismanagement, could possibly be any worse off if we started to take a rather more nationalistic view of our self-interest.

We protect agriculture. Subsidies reduce prices and ensure standards, but they also give jobs. If we want to see cows in fields and the countryside managed well, then we’d better carry on protecting it.

So why not also strategic manufacturing, or energy generation, or London property, or British companies? Other countries do, by hook or crook. Why is it always us who seem to think we have to let everybody else plunder our home market and take over the very means of production and wealth on which we and our descendants depend? Is it a warped sense of noblesse oblige? Is it a commitment to ‘globalism’ in this age of over-vaunted inter-dependence? Is it unquestioning pursuit of liberal economics despite its record, including by most of our own UKIP hierarchy? Is it a horror of anything smacking of nationalism, notwithstanding Germany clearly winning the peace and imposing its hegemony over Europe, or the tricks the French get up to in protecting their own industry, or the myriad problems arising from allowing foreigners to buy up central London? I’d say it’s all those things and a few more.

Do we seriously think we can go on as weare? With our pathetically low productivity, low skills, low investment, ever-burgeoning national debt? Do we have no more ambition than to let others buy us up and take charge? Why should anything change unless we start doing things differently, take our destiny in our hands and use our own resources to meet our own needs?

What is the environmental cost of all this international trade? Why is it apparently so essential that we import meat and corn, yet export them too? What is it exactly that all those Polish lorriesare carrying on our roads?  How many more green fields can we lose to white sheds? Why do we allow the car industry to carry on with its globalised ways and dictate what they find acceptable or not with our national trade policy?

Then there’s the politics. A degree of protectionism as part of a broader nationalistic economic strategy is just what’s needed to widen our appeal. It would be a popular and unique selling point –controversial, but then UKIP certainly needs the attention, and on something different. And it’s on the economy that we have the best chance to actually achieve power or influence.

UKIP leadership candidates would be wise to give this some thought.

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7 Comments on A CASE FOR PROTECTIONISM

  1. We should pick and choose who we import from and favour friends and allies thus foodstuffs and raw materials from USA/Canada/OZ/NZ as easy examples.
    We should recognise that certain manufactures are essential for national security and national infrastructure thus production of trams should start, trains, munitions, steel esp high quality, high end plastics, carpets, furniture ( and hence forestry), quality textiles. We should run certain monopolies as a not for profit private company eg Royal Mail. We should have an alternative to the casino banks by having a not for profit Trustee Bank and a 100% British owned and run Post Office Savings Bank.
    ICI was created by the government in 1914 as an emergency measure as we were so dependent upon imports of many chemical products from Germany. Like wise we should create certain companies and then open them to national share ownership in the fields of electronics and nuclear power.
    The UK is a world leader in the following areas
    Pharmaceuticals
    Aerospace esp Jet Engine technology
    Steel stockholding
    Logistics/Freight Forwarding
    Hydraulic Engineering
    Textile fibres from plastics
    R&D of many day to day products
    Printing and packaging
    Dyson products
    There is a too long list of products where we are a significant world player.
    Things are bad and could be a lot better. A good reason to leave the EU ON TOP OF LOTS OF OTHER ESSENTIAL REASONS is that we would be able to develop with government help many more top products.
    This is all quite distinct from socialism and/or government control. Even the NHS – esp the NHS – would benefit from some private enterprise.

    • Your knowledge of what we are good at in Britain far exceeds mine CK.

      Brexit is THE golden opportunity to start in earnest and I find it difficult to argue against anything you have suggested.

      I’m just afraid the Tories won’t invest in these industries on idealogical grounds, even though it would boost our whole economy. Labour might, but they don’t seem to have the entrepreneurial spirit necessary so probably wouldn’t recognise where the investment should go. They would rather dump masses of money into existing structures hoping it would save jobs.

  2. I have a million questions on why UKIP and our country is in the pathetic state it is. And it IS pathetic. Here’s but a few for anyone so bored with 2017 politics that they’ve got time to read what I have to say:

    1. Am I the only party member who isn’t scratching around looking for a purpose/the vision thing for UKIP? Why does every senior party official go on as if we really ARE a single issue pressure group. This isn’t the party I joined 7 years ago!

    2.Why does every politico with a backbone get squashed by those without one and why does the populus let them get away with it? (vis.Farage, Anne Marie Waters and some more)

    3.Why oh why oh WHY are UKIP senior people so absolutely and certifiably PARANOID about what the MSM think about us? All the other parties get torn into by the media and they’re still going. Why do UKIP think such criticism is unacceptable? And what are they afraid will happen?

    4. Every vehicle on our roads requires wiper blades. Apparently only the German company Bosch is allowed to distribute these and they cost a FORTUNE. Where is the British entrepreneur cutting into this lucrative market?

    5.James Dyson (I think) said he could not source some vital electronic components for his products in Britain. Why don’t we support some British entrepreneur after Brexit when the EU can’t stop us. Our own electronics industry would save a fortune in Asian/Chinese imports.

    6. Many many more projects such as in 4 and 5 above, after we leave the EU.

    7. Why when interviewed don’t our senior people expound on UKIP policies, why do they keep agreeing that UKIP’s job is done and we’re scratching around for answers? Why have we lost our mojo, our vision? Is it any wonder no-one wants to vote UKIP. The party I joined was going to change the face of British politics. So did Farage lie when he said that?

    8.Why aren’t UKIP banging on and on and on and on and ON about introducing Proportional Representation for the House of Commons. Every major party is on board the concept, yes even Labour. If we do that, trust me it WILL be talked about, the Tories will not be able to resist the pressure to introduce it as they are the ONLY party dead against it and guess why. We would have 13 MPs after the last GE if PR was in place. And don’t tell me no-one will listen, everyone thought leaving the EU was a crazy idea three years ago…

    • “4. Every vehicle on our roads requires wiper blades. Apparently only the German company Bosch is allowed to distribute these and they cost a FORTUNE. Where is the British entrepreneur cutting into this lucrative market?”

      I’ve been working in and out of the automotive aftermarket for many years now, and I have to disagree with that point, as it simply isn’t true. Bosch are a manufacturer of OE (original equipment) wiper blades, as well as Valeo. Both companies also supply wiper blades to the aftermarket, but there are a whole host of other manufacturers and importers who distribute wiper blades in the UK. Even shops like Tesco and Wilko sell their own branded wipers!

      • I stand corrected Stuart, however the point I was really meaning to emphasise was the fact that modern wiper arms make it almost impossible to renew just the blades. They have by design, a hard stop at each end which makes removal of the rubber blade part very difficult. I have never ever, in 45 years of car ownership, needed to replace a whole wiper arm, just the rubber.

        • Ah yes, you mean the wiper refill, just the rubber blade. These used to be very popular, not so much now that the ‘traditional’ metal wiper blades are so cheap, thanks to the Chinese mass producers!
          Most modern cars now though do use what we call ‘flat blades’, which were initially expensive (when only Bosch and Valeo made them!). But even now there are plenty of cheap alternatives:
          http://www.wilko.com/search?q=wiper+blade
          Simply clip off and clip on, a lot less hassle than just trying to replace the rubber part!

          On an interesting side note, we had a very irate customer the once, from Singapore or Sri Lanka, forget exactly where now, who we had shipped a Bosch oil filter to. They were expecting a quality product ‘Made In Germany’ as per Bosch tradition, but were dismayed that the filter had ‘Made in Slovakia’ stamped on it instead, and considered it a ‘poor substitute’.
          A timely reminder that it is not just the UK suffering from manufacturing being moved elsewhere in the Single Market, but Germany (Bosch) and France (Valeo) too. We need to start encouraging manufacturing in the UK again, to create jobs.

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