FREE TRADE
By Rt. Hon. J.M. Robertson
P.C.; President of National Liberal Federation since 1920; M.P. (L.), Tyneside Division, Northumberland, 1906-18; Parliamentary Secretary to Board of Trade, 1911-15.
Mr. Robertson said:—At an early stage of the war Mr. H.G. Wells published a newspaper article to the effect that while we remained Free Traders we were determined in future to accord free entry only to the goods of those States which allowed it to us. The mere state of war, no doubt, predisposed many to assent to such theses who a few years before would have remembered that this was but the nominal position of the average protectionist of the three preceding generations. War being in itself the negation of Free Trade, the inevitable restrictions and the war temper alike prepared many to find reasons for continuing a restrictive policy when the war was over. When, therefore, the Committee of Lord Balfour of Burleigh published its report, suggesting a variety of reasons for setting up compromises in a tariffist direction, there were not wanting professed Free Traders who agreed that the small tariffs proposed would not do any harm, while others were even anxious to think that they might do good.
Yet the policy proposed by Lord Balfour’s Committee has not been adopted by the Coalition Government in anything like its entirety. Apart from the Dyestuffs Act, and such devices as the freeing of home-made sugar from excise, we have only had the Safeguarding of Industries Bill, a meticulously conditional measure, providing for the setting up of particular tariffs in respect of particular industries which may at a given moment be adjudged by special committees ad hoc to need special protection from what is loosely called “dumping.” And even the findings of these committees so far have testified above all things to the lack of any accepted set of principles of a protectionist character. Six thousand five hundred articles have been catalogued as theoretically liable to protective treatment, and some dozen have been actually protected. They have given protection to certain products and refused it to others; according it to fabric gloves and glass and aluminium goods and refusing it to dolls’ eyes and gold leaf.
Finally, the decision in favour of a tariff on fabric gloves has evoked such a storm of protest from the textile manufacturers who export the yarns with which foreign fabric gloves are made, that even the Coalitionist press has avowed its nervousness. When a professed protectionist like Lord Derby, actually committed to this protectionist Act, declares that it will never do to protect one industry at the cost of injuring a much greater one, those of his party who have any foresight must begin to be apprehensive even when a House of Commons majority backs the Government, which, hard driven by its tariffists, decided to back its Tariff Committee against Lancashire. Protectionists are not much given to the searching study of statistics, but many of them have mastered the comparatively simple statistical process of counting votes.
The “New Circumstances” Cry
In a sense, there are new fiscal “circumstances.” But I can assure my young friends that they are just the kind of circumstances which were foreseen by their seniors in pre-war days as sure to arise when any attempt was made to apply tariffist principles to British industry. As a German professor of economics once remarked at a Free Trade Conference, it is not industries that are protected by tariffs: it is firms. When a multitude of firms in various industries subscribed to a large Tariff Reform fund for election-campaign purposes, they commanded a large Conservative vote; but when for platform tariff propaganda, dealing in imaginative generalities and eclectic statistics, there are substituted definite proposals to meddle with specified interests, the real troubles of the tariffist begin. You might say that they began as soon as he met the Free Trader in argument; but that difficulty did not arise with his usual audiences. It is when he undertakes to protect hides and hits leather, or to protect leather and hits boot-making, or to help shipping and hits shipbuilding that he becomes acutely conscious of difficulties. Now he is in the midst of them. The threat of setting up a general tariff which will hit everybody alike seems so far to create no alarm, because few traders now believe in it. Still, it would be very unwise to infer that the project will not be proceeded with. It served as a party war-cry in Opposition for ten years, and nearly every pre-war Conservative statesman was committed to it—Earl Balfour and Lord Lansdowne included. Even misgivings about Lancashire may fail to deter the tariffist rump.
Some of the people who even yet understand nothing of Free Trade economics are still found to argue that, if only the duty on imported gloves is put high enough, sufficient gloves will be made at home to absorb all the yarns now exported to German glove-makers. They are still blind, that is to say, to the elementary fact that since Germany manufactures for a much larger glove-market than the English, the exclusion of the German gloves means the probable loss to the yarn-makers of a much larger market than England can possibly offer, even if we make all our own gloves. In a word, instead of having to furnish new Free Trade arguments to meet a new situation, we find ourselves called upon to propound once more the fundamental truths of Free Trade, which are still so imperfectly assimilated by the nation.