Douglas Carswell Warns Against The Allure Of Protectionism

Container Ship - Cargo - Trade - Protectionism

Douglas Carswell makes the short and eloquent case against protectionism:

The prosperity we take for granted today couldn’t have happened without free markets and free trade. That doesn’t stop people – even presidential candidates – saying we’d be better off starting trade wars, and only buying goods made at home. But the fact remains: protectionism is the route to poverty.

Globalisation gets a bad press. When manufacturing moves from Britain or the US to China and India, it looks like we’re losing out. But the result is that we get our clothes, shoes, computers, phones, and televisions much more cheaply. And lower prices don’t just make us better off. They also increase demand, and create jobs.

As Adam Smith and David Ricardo realised 200 years ago, prosperity comes from specialisation. If each of us tried to be self-sufficient, we would all be living in prehistoric penury. Instead, we specialise in what we’re best at, and exchange the product of our work for what we need.

The same applies to countries. Today, Britain’s comparative advantage is in services. Other countries are best at heavy industry or agriculture. By specialising in services, we get more and better manufactured goods and agricultural produce than we would if we diverted our resources into making them ourselves.

Protectionism might seem like the solution for people who have lost out to globalisation. But its effect would be regressive – like the poll tax. It would force prices up, and employment down. That would hit the poorest hardest.

Carswell goes on to argue that protectionism does not bring prosperity, but rather leads to inefficient, monolithic corporations like British Leyland, churning out low quality product that nobody really wants – and even then, only at the cost of massive subsidies from the taxpayer.

The case against protectionism cannot be restated enough at a time when globalisation and free trade is under sustained attack on both sides of the Atlantic – by the otherwise polar opposite Donald Trump and Bernie Sanders in America, and by the worst elements on both sides of the EU referendum debate in Britain, who believe that we should retreat either into mercantilist isolationism or protectionist euro-parochialism.

There is an important debate here to be had among advocates for smaller government. Clearly the state is presently far too involved in our lives in all manner of ways, but surely one of the things that a smart, lean and effective small government absolutely should do is watch out for its citizens when they are impacted by massive changes to the way that the world trades and communicates.

Labour’s solution has been to park people on welfare and then forget about them, which is remarkably immoral for a group of people who love to endlessly brag about how virtuous and compassionate they are. The intelligent Right should come up with something better. And that means doing something more than simply aping Labour policy by raising the minimum (or “national living”) wage to £9 an hour so that the most tedious of low-paying McJobs keep people just out of working poverty.

The new permanent majority will not be secured by the Cameron / Osborne strategy of enacting Tony Blair’s fourth term of New Labour governance. It will come about by radically rolling back the state in all manner of areas where it should be doing less, while also giving citizens the tools and opportunity to prosper in the new economy.

Less protectionism, less pretending that the old jobs will come roaring back if only we leave the EU, embrace the EU or otherwise throw up barriers to global trade. Less shooting for the middle all round, and more empowerment of British citizens to pursue high value-add, high-wage, twenty-first century careers.

Now put that on a bumper sticker.


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The “Remain” Campaign: Wrong On Economics, Cavalier With Democracy

EU Democracy - Brexit

The pro-EU lobby is wrong on the economic argument. But their lack of concern for democracy is far worse

Over the past week, a lot of scaremongering warnings and cautionary tales have been flung around by the “Remain” campaign, talking down Britain and painting the risible picture of the UK as a small, insignificant country that would be overwhelmed and destroyed if we tried to follow the examples of Norway, Switzerland, Singapore or any other country (all less powerful and consequential than ourselves) and re-engage with the world as an independent power.

We have seen the Prime Minister travel to Iceland and lie about the Norwegian option, misrepresenting facts and figures to make it seem as though Norway has to pay almost as much per capita for access to the Single Market as Britain, while having no influence over the rules. Both of these claims, of course, are false. Much of Norway’s contribution is voluntary and goes directly to the recent accession countries in eastern Europe, and are in no way a prerequisite for trading with the EU. And Norway has far more of a say over global rules because unlike EU member states, they retain their own, voting seat at the World Trade Organisation and other key global standard-setting forums.

We have seen Michael Froman, the US trade representative, seek to bully the British electorate with equally laughable claims that the United States would not be interested in pursuing a free trade deal with its strongest and closest ally in the event of Brexit. Again, this is pure nonsense – the US may prefer negotiating trade deals with large blocs, but so crucial is UK-US trade to both parties that a free trade agreement could be hammered out in minutes, were it absolutely necessary. Besides which, we need to learn to distinguish between what the US would like us to do and what is actually best for Britain.

And we have seen the CBI continue to misrepresent British business in general and its own membership, claiming that majority want the UK to stay in the EU based on highly selective  and manipulative sampling methods.

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It Is Not Britain’s Job To Save The EU From Its Own Worst Instincts

David Cameron - European Union

They’ve bribed us with cheap international calls, and threatened us with bogus figures about fictitious job losses. Now, the “Remain” campaigners want us to vote to stay in the EU to save Brussels from itself

What to do when the two best weapons at your disposal – bribery and coercion – are not achieving the desired effect?

Well, if you are the “Remain” campaign and you are desperately trying to come up with plausible new arguments to convince the British people to stay shackled to a failed, anti-democratic political union, then it is eventually going to come down to begging, pure and simple.

Cue Mark Field’s latest piece in CapX, which is dedicated not to any of the things that the European Union can offer Britain, but rather to all the reasons why the EU needs Britain to stick around – namely, to save the Brussels machine from its own worst instincts.

Field recounts conversations with some Swedish legislators, who are apparently “terrified” at the prospect of Brexit:

It took some Swedish counterparts to remind me recently just how crucial Britain’s role in the EU is to fellow members who believe in the Anglo-Saxon values of free trade and competition, and share our desire to resist “ever closer union”. The notion of Brexit is terrifying to Northern European allies who look to the UK as an essential bridge between the EU and the English-speaking world, a critical counterweight to the Franco-German axis and the asker of awkward but essential questions over reform. They see an EU which Britain has been instrumental in shaping, citing the expansion eastwards into pro-western countries like Poland, the promotion of the single market, open competition for goods and services, new trade deals and English as the dominant language.

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