Multiculturalist Ideology (Part One): A Rationale For Race War Politics
An Examination Of The Logic of Multiculturalism
An Examination Of The Logic of Multiculturalism
Lord Hannan expressed the above alarm in a recent article in the Daily Mail. A forceful response would be to wonder whether Lord Hannan is a fool or a liar. As president of the Institute for Free Trade, he should be familiar with the history of British trade policy and/or be honest with those he seeks to persuade to support his viewpoint.
Lord Hannan could have expressed concerns as to the wisdom of President Trump’s policy of using tariffs as a means of eliminating the USA’s ongoing trade deficit, rather than to speak luridly about a ‘threat of a global trade war’ or the prospects of ‘a new Great Depression’. Both India and China are openly protectionist and manage a higher rate of growth than Western countries without the world sinking into a ‘Great Depression’.
In his article, Lord Hannan wrote (italics my emphasis):
‘We have been here before. In 1930, Congress passed an Act imposing levies on some 20,000 imported goods. US trade fell by two-thirds. Erstwhile allies, notably Canada, retaliated with tariffs of their own. Prices surged, leaving Americans with less to spend and causing the economy to cramp up. The recession, which had been coming to an end, was instead deepened and prolonged. Unlike Britain, which stuck to free trade and enjoyed a decade of impressive growth, the US condemned itself to the Great Depression.’
The phrase in italics is completely untrue. It is the exact opposite of the historical facts.
Lord Hannan turned to President Trump’s first term in office and the tariffs he imposed, leading to ‘retaliatory tariffs’ from other countries. He asked (italics my emphasis): ‘Why did these countries respond to America by self-harming, inflicting equivalent injuries on themselves? Because, in these situations, politics edges out economics; the desire to retaliate overcomes self-interest.’ This presumes that it is in a country’s self-interest to allow others to impose tariffs on that country’s exports whilst those others have access to a country’s domestic market tariff-free. This is a policy of unilateral free trade.
Lord Hannan continued:
‘Just as during the 1930s, domestic protectionism and international instability are in danger of forming a vicious circle. As people become poorer, they turn to more authoritarian policies, which make them poorer still. The wars of the early 20th century were products of a protectionist age. That is why, in 1945, the victorious allies were determined to re-establish free trade. “The whole world is concentrating on attaining the objectives of peace and freedom,” declared President Truman in 1947, the year that established what is now the World Trade Organisation. “These objectives are bound up completely with a third objective: re-establishment of world trade. In fact, the three – peace, freedom, and world trade – are inseparable.”’
As for UK trade policy, where we currently have no free trade deal with the USA, with whom the UK’s trade is broadly in balance, Lord Hannan proceeded to ask: ‘We already have a tariff-free trade agreement with the EU. Why not get one with the US, too?’ The UK’s trade with the EU has been in an ever-increasing deficit since the UK joined the bloc in the 1970s. Previously, trade had been broadly in balance. Apparently, Lord Hannan did not grasp that fact or its importance.
It is untrue that either WWI or WWII were the consequence of tariffs. German aggression had other motives. Britain’s economic decline, recognised in the late 19th century, was a factor in that Britain was weaker than it should have been. That particularly applied regarding WWII.
Post WWII the USA was keen to open up other markets for its goods, in particular to break up Britain’s Imperial Preference for the empire. The global institutions created then are now out of date and a source of weakness for the UK and the West too.
The history of Britain’s trade policy is that after experiencing the industrial revolution before any other country, from the early 19th century onwards the policy was one of unilateral free trade. Other countries could not compete anyway, and so British tariffs were irrelevant. By the late 19th century, Britain’s decline was apparent, with Germany and the USA overtaking Britain in key sectors (such as steel).
A campaign for Tariff Reform was launched in response to Britain’s decline. It was led by the mighty Joseph Chamberlain. Winston Churchill was a noisy opponent. After a bruising battle, with much double dealing by the Conservative prime minister, the Conservatives lost the following election and Joseph Chamberlain suffered a serious stroke from which he did not properly recover. The campaign failed and Britain clung to the policy of unilateral free trade.
WWI exposed the backwardness of British industry. The realisation came as a shock at the time, but was soon forgotten. In 1925, Winston Churchill, the new Chancellor of the Exchequer, put Britain back onto the Gold Standard at pre-war parity. At a stroke, the entirety of British exports were uncompetitive.
The mine owners attempted to regain competitiveness for coal exports by cutting wages, thus leading to a miners’ strike and then a general strike. By September 1931 Britain had been forced to leave the Gold Standard (we ran out of gold due to the trade deficit) and there were more than three million unemployed. Real poverty was widespread. Now, British civil society, including business organisations and the press demanded that the government use tariffs like every other leading country. People had had enough of free trade theories. The Chancellor was now Neville Chamberlain, Joseph Chamberlain’s son.
I detail all this and what came next in my book The Ponzi Class. We are to assume that Lord Hannan knows nothing of these facts. A casual search on the internet reveals all. For example, the relevant Wikipedia page gives a good account of a great and moving parliamentary moment:
‘The Import Duties Act 1932 (22 & 23 Geo. 5. c. 8) was an Act of United Kingdom Parliament [It followed the introduction of the Abnormal Importations Act of November 1931, which imposed tariffs of up to 100% on certain goods]. The Act introduced a general tariff of 10% on most imports, though some foodstuffs, raw materials, and some imports from the British Empire were exempted . Specifically, the Dominions, India and Southern Rhodesia were exempt from these tariffs until 15 November 1932, when the Imperial Economic Conference at Ottawa would have agreed on a system of Imperial Preference.
The Chancellor of the Exchequer, Neville Chamberlain, introduced the Bill to the House of Commons on 4 February 1932. He had with him his father’s old despatch box from when he was Secretary of State for the Colonies and his father’s widow was present in the gallery. He explicitly referenced Joseph Chamberlain’s crusade for Tariff Reform in his speech:
“There can have been few occasions in all our long political history when to the son of a man who counted for something in his day and generation has been vouchsafed the privilege of settling the seal on the work which the father began but had perforce to leave unfinished. Nearly twenty-nine years have passed since Joseph Chamberlain entered upon his great campaign in favour of Imperial preference and tariff reform. More than seventeen years have gone by since he died, without having seen the fulfilment of his aims and yet convinced that, if not exactly in his way, yet in some modified form his vision would eventually take shape. His work was not in vain. Time and the misfortunes of the country have brought conviction to many who did not feel that they could agree with him then. I believe he would have found consolation for the bitterness of his disappointment if he could have foreseen that these proposals, which are the direct and legitimate descendants of his own conception, would be laid before the House of Commons, which he loved, in the presence of one, and by the lips of the other, of the two immediate successors to his name and blood.”
Upon finishing this speech, Neville’s half-brother Austen Chamberlain got up from his seat and shook Neville’s hand amidst cheering. The Bill passed the Commons by 454 votes to 78, being opposed by the Labour Party and 32 Liberals. It came into operation on 1 March 1932.
Tariffs could be increased on the recommendation of the Import Duties Advisory Committee which the Act founded. The flat 10% tariff was increased to rates from 15% to 33% for various goods shortly after the Act was passed.
According to Nicholas Kaldor these tariffs encouraged domestic substitution for imports, increasing the UK’s general level of manufacturing production during the years 1932–1937 by 48% (or 8.1% a year), a rate of growth not experienced by Britain before or since. Kaldor also claimed that real GDP rose 4% a year during this period, making Britain the world’s fastest growing economy (with the possible exception of Nazi Germany). In regards to steel production, Britain was producing 13 million tons in 1937 compared to the 5 million tons produced in 1932 and the pre-Depression peak of 9 million tons in 1929.’
These are the historical facts of which we are to believe Lord Hannan, the president of the Institute for Free Trade (no less) knows nothing. He was wrong to claim that Britain ‘stuck to free trade’ in the 1930s, and wrong to claim that it is against a country’s self-interest to use tariffs even in retaliation. The thrust of his article was wrong in its entirety.