WeeklyWorker

22.11.2018
Tory poster: ‘The radical “free trade” slaves’ (1910)

Free-trade tailism

The Alliance for Workers’ Liberty has enlisted a clipped version of Marx and Engels to serve its political agenda. In the first of two articles Mike Macnair looks at the claims of free trade and protectionism

A couple of months ago I wrote critically about the second document proposed by the Alliance for Workers’ Liberty for its conference, which was about Brexit (‘Liberal playthings’ Weekly Worker September 27). I said then that it “argues, with caveats, for the defence of the existing free-trade regime against Trumpism, Brexiteering, and other forms of nationalism. In doing so it makes dodgy claims about the history of the issue.”

I promised a future article on the issue, with the intention of arguing that “the AWL’s ‘free-tradism’ tails the neoliberals’ ideological claims and fails to recognise necessary dynamics of capitalism at work in the shifts between liberal free-trade ideology and party-of-order nationalisms”.

The AWL’s conference is next weekend, but there has been no apparent public discussion in Solidarity (and, indeed, the Brexit document is not easy to find on its website). The issue is still, however, a fundamental one: because the AWL’s free-trade advocacy is not unique, but channels the ideas of the bulk of the ‘centre-left’ in both Europe and America.

What has happened is that AWL leader Martin Thomas has recognised that ‘Another Europe is Possible’ has become an exercise in ‘astroturfing’, through AEIP taking money for top-down NGO-style politics. Initially the critique appeared online, but Thomas has developed the point in an interview with Michael Chessum - mostly friendly - in the November 14 issue of Solidarity. He says: “Up to now AEIP has essentially been an NGO - it gets money from grants and philanthropists and such to pay an office staff to do activities, which people out in the field may then support.”

Collaboration with liberals for limited specific purposes is not in itself wrong. The problem is the combination of making yourselves dependent on the liberals by taking money from them and toning down your arguments for the sake of unity with them - or, for that matter, of what is supposed to be a ‘more effective focus’ on the subject of the common campaign. Thomas points to unclarities in AEIP’s project:

We’d want some points agreed. That AEIP should campaign for free movement upfront, including at its times of maximum visibility: there was no mention of free movement in the AEIP model motions for Labour Party conference, or in the AEIP model motion after conference. That AEIP should explicitly campaign to change Labour policy to opposing Brexit. And that AEIP should explain that the “other Europe” in its name means a socialist Europe, not just a Europe much like now but with better policy advisors, which seemed to be the line from the Europe For The Many conference [October 26-27].

This is a case of people in glasshouses throwing stones. As I pointed out in my September 27 article, the AWL’s own version of ‘left remain’ is exceedingly imprecise about what “other Europe” it means, and shows a strong tendency to downplay the constitutionally entrenched ‘ordoliberal’ or ‘neoliberal’ rules of the EU, as well as the institution’s anti-democratic structures. This imprecision and softness remains present in the conclusion to the lead article in the November 14 Solidarity:

Labour must vote solidly against any Tory Brexit deal. It must spell out the conclusion from two and a half years’ experience since June 2016: ‘Remain and rebel’ - meaning, remain and stir up a cross-Europe working class movement for democracy and social standards across the EU - is the only answer that can serve working class interests.

“Democracy” is not rendered at all precise; and “social standards” is a long way from the “socialist Europe” that Thomas proposes for AEIP.

Issues

Behind this problem lie two issues. The first is that the AWL is, as much as the large majority of the far left, committed to Georgi Dimitrov’s (popular frontist) conception of the united front from the Seventh Congress of the Comintern:

‘The communists attack us,’ say others. But listen, we have repeatedly declared, we shall not attack anyone, whether persons, organisations or parties, standing for the united front of the working class against the class enemy. But at the same time it is our duty, in the interests of the proletariat and its cause, to criticise those persons, organisations and parties that hinder unity of action by the workers.

That is, the idea is that unity is conditional on a degree of self-censorship.

The high-period Stalinist origin of this idea has not hindered its adoption by the modern Trotskyists.1 Indeed, the ‘transitional programme’ idea, because it is grounded on trying to lead the workers by the nose to socialism on the basis of ‘moderate demands and militant action’, promotes the self-censorship model of the ‘united front’.

The second issue is that the AWL has since the 1980s been committed to what is in substance preference for liberal-model imperialism against both Stalinist bureaucratic ‘socialism’ and left-talking forms of third-world nationalism. In origin this seems to have been a matter of simply placing a minus sign where ‘official communism’ placed a plus, and vice versa; but it also became framed by a theory in which the Leninist account of imperialism was true for its own time, but had since World War II been replaced by an international imperialist cartel - more like the mid-19th century British ‘imperialism of free trade’ or Karl Kautsky’s 1914 idea of an “ultra-imperialism”, in which the imperialists avoided conflict and war, and the world became ‘flat’, apart from the activities of ‘paleo-imperialists’ like the Argentinian junta, the Iraqi Ba’athists and, most recently, the Putin administration in Russia.

I wrote about this AWL theory in 2004 and will not repeat the arguments against it here.2 The present point is that the AWL’s belief that there was a permanent secular transition from ‘old imperialism’ to a new, flatter world of ‘imperialism of free trade’ is sharply challenged by what has happened since the early 2000s: that is, there has been a global shift towards right-populist nationalism.

This admittedly started in ‘third world’ countries (like the ascendancy of Hindutva in India; indeed, rightist Islamist politics, starting earlier, could be seen as the first exemplar of what has turned out to be a general trend). And in a sense the Putin administration and the rise of far-right politics in eastern Europe could until recently have been seen as similar, and as responses to economic backwardness. But it has reached the ‘advanced capitalist countries’ too. The rise of overt war-guilt revisionism in Japan round the Yasukuni shrine, and so on, began with Junichiro Koizumi in 2001 and has only continued with Shinzo Abe.3 At the same period we have seen the rise to prominence of the Front National in France, and since then of the Alternative für Deutschland in Germany, although neither has yet attained government office. In Italy, the fascists are in office in coalition with the right-populist Five Star Movement.

But the real ‘shock to the system’ for Anglophone liberals - and hence for the AWL’s theory of a secular or irreversible transition to the ‘imperialism of free trade’ - has been the successive victories of the Brexiteers in the 2016 referendum, and of Donald Trump in the same year’s US presidential election, with his ‘America First’ ideology - and his Brexit support and willingness to tear up treaties and to embark on tariff wars since he took office.

Bourgeois ameliorations?

It is then unsurprising that the AWL document’s response to this situation is to argue for defence of free trade as a limited gain, which the capitalists will fail to defend:

Against a determined push by the new rightwing nationalists, the liberal bourgeoisie will not safeguard the moderate extensions of formal equality, the modest opening of opportunities to ethnic minorities, the relative freedom of movement for some across some borders, the halfway secularism, the mild cosmopolitanism, on which it prides itself.

Having already let so many civil rights be swallowed by the ‘war on terror’ and the drive for ‘labour flexibility’, it will be no bulwark for the rest. The liberal bourgeoisie may not even safeguard the achievement of which it boasts most: the reduction of economic barriers between countries ...

It falls to the labour movement to defend even the limited bourgeois ameliorations.

In support of this approach, the AWL document calls on the authority of Marx and Engels. Rather extensive quotation is unfortunately unavoidable:

Socialists do not endorse capitalist free trade. We are not for the unfettered rule of markets. We are for fettering market forces through social-provision and worker-protection policies, as international as possible. As the working class gains political strength, we aim to make democratically decided social solidarity the chief regulator of economic affairs.

We are not necessarily opposed, even, to all bourgeois protectionist policies. “Nursery tariffs”, allowing new industries to make a start in weaker countries, are not our way of doing things, but they have a rationale, and we would not condemn them in favour of undiluted free trade.

In general, however, our approach is as Marx outlined in 1847:

“Do not imagine, gentlemen, that in criticising freedom of trade we have the least intention of defending the system of protection. One may declare oneself an enemy of the constitutional regime without declaring oneself a friend of the ancient [ie, autocratic or aristocratic] regime ...

“In general, the protective system of our day is conservative, while the free trade system is destructive. It breaks up old nationalities and pushes the antagonism of the proletariat and the bourgeoisie to the extreme point. In a word, the free trade system hastens the social revolution. It is in this revolutionary sense alone, gentlemen, that I vote in favour of free trade.”

Frederick Engels explained further, when republishing Marx’s text from 1847:

The question of free trade or protection moves entirely within the bounds of the present system of capitalist production and has, therefore, no direct interest for us socialists, who want to do away with that system. Indirectly, however, it interests us, inasmuch as we must desire the present system of production to develop and expand as freely and as quickly as possible ... From this point of view, Marx pronounced, in principle, in favour of free trade as the more progressive plan ...4

There are two problems with this line of argument. The first is that this is violently selective quotation. While Engels’ 1888 preface to Marx’s 1848 speech does follow the line stated here, Marx’s speech was in fact mainly directed against the liberal free-traders.

Secondly, supposing that the line the AWL has adopted was indeed that of Marx and Engels, we should bear in mind that they were developing this in the 19th century, at a period where it looked as if free trade was the ‘wave of the future’. They were doing so without reference to the earlier debates about Dutch free-trading and English protectionism. Marx’s 1848 speech was largely directed against the hypocrisy, and so on, of the free-traders. Engels’ 1888 ‘Preface’ was directed polemically against a new rise of protectionism and nationalism (beginning in Germany and the USA), which continued to ascend up to the 1940s. What followed - the Bretton Woods and General Agreement on Tariffs and Trade (GATT 1) regime of the 1950s-70s - was not one of free trade, but of managed trade (and controls on capital movement). Full-dress free-trade ideology like that of the 19th century ‘Manchesterites’ only returned in the 1980s.

Hence, working up any sort of Marxist theory on the question will not be achieved by selective citation-grazing in Marx and Engels of the sort found in the AWL document. There is, at least, some sort of long cycle between free-tradism and protectionism, and a connection to geopolitical hierarchies of states. Further, it is not entirely clear how far either free-tradism or protectionism actually describes state behaviour, as opposed to both functioning as political ideologies to generate consent in the subordinate classes for policies actually adopted in state-bureaucratic interests and those of particular capitalist groups.

What is involved is a subject which, if it had been addressed as part of Marx’s critique of political economy, would have belonged in books 4-6 of the “six book plan” Marx was working with in the 1850s - (1) Capital, (2) landed property, (3) wage-labour, (4) the state, (5) foreign trade, (6) the world market. The (perfectly defensible) arguments that Marx abandoned this plan in favour of the four books - (1) the process of production of capital, (2) the process of circulation of capital, (3) the structure of the process as a whole, (4) the history of the theory (Capital volumes 1-3 and Theories of surplus value)5 - do not alter the point that theorising the political economy of free-tradism and protectionism requires as a prerequisite a political economy of the state; and that Marx (and Engels) never achieved such a thing.6

It follows that I am not going to attempt to do this sort of theoretical work here. What I will do will be a two-part series. First, in this article, I will enlarge on what the AWL has selected from Marx and Engels, in order to illustrate that its use of them is misleading.

Second, in a subsequent article, I will discuss briefly some historical literature on the issue, which ‘interrogates’ the standard narrative of a teleology from mercantilist protectionism towards free trade; and, third, to make a single observation about why capitalist states cannot avoid discrimination against non-national capitals, and to this extent must be mercantilist - even if, for some states, free trade may be a successful mercantilist policy (that is, one which operates at the expense of other states). This will enable a final return to the underlying political question. We stand at the cusp of a decline of the free-trade ideology in favour of rightwing nationalist and/or religious populism. How can we respond to this?

Marx and Engels 1840s-50s

As Engels tells us in his 1888 preface, the victory of the ‘free-traders’ in the repeal of the British Corn Laws (agricultural protection) in 1846 led to efforts to expand the free-trade campaign to the continent. As a result there was a free-trade congress in Brussels in 1847. Marx prepared a speech in an attempt to intervene in this congress, but did not in the event get called to speak. His intended speech was then given to a January 1848 meeting of the Brussels Democratic Association, and in February of that year published in French as a pamphlet.

The AWL document quotes the last paragraph of this text, and two single-sentence paragraphs before the penultimate one. The penultimate one argues that protectionism in a country which has not yet got large-scale industry serves to develop this industry, and to develop free trade within the country; it is therefore adopted by a rising bourgeoisie, as in Germany.

The paragraphs quoted are in fact the only paragraphs which can be read as favouring free trade. The large bulk of the pamphlet argues that free trade will worsen the immediate condition of the workers. Thus, for example,

This law of commodity labour, of the minimum of wages, will be confirmed in proportion, as the supposition of the economists, free trade, becomes an actual fact. Thus, of two things one: either we must reject all political economy based on the assumption of free trade, or we must admit that under this free trade the whole severity of the economic laws will fall upon the workers.

And similarly:

We have shown what sort of brotherhood free trade begets between the different classes of one and the same nation. The brotherhood which free trade would establish between the nations of the Earth would hardly be more fraternal. To call cosmopolitan exploitation universal brotherhood is an idea that could only be engendered in the brain of the bourgeoisie. All the destructive phenomena which unlimited competition gives rise to within one country are reproduced in more gigantic proportions on the world market.

Marx’s argument in this text is in substance that of ‘absolute immiseration’, for which he has been condemned as a false prophet by capitalist ideologues - and which he had clearly abandoned by the 1860s.7 It is this argument which is the ground, and the sole ground, he offers for supporting free trade: that is, that free trade, by pushing down wages, “pushes the antagonism of the proletariat and the bourgeoisie to the extreme point” and hence “hastens the social revolution”.

This was, of course, not all that Marx or Engels wrote about the free trade issue at this period. Marx’s intended speech, as summarised by Engels for the Northern Star of October 9 1847, also included a (shorter) polemic against the protectionists.8 This was directed against German authors, and seems to have been separately published in German.9 The argument is, in substance, that Friedrich List’s call for protection is openly anti-working class, while Gustav von Gülich, who wanted to protect artisan production by a total ban on imports, was a plain utopian. Those who tried to argue that List-style protectionism would in fact benefit workers failed to notice that strengthening capital against foreign rivals would ipso facto also strengthen capital against labour.

Engels had a bit earlier in the year written about German protectionism; here, as in the penultimate paragraph, which the AWL cut out of the Marx speech, he argues that in Germany protection can be supported as tending to promote industrial development and clear away the pre-capitalist classes, thus bringing to the fore the fundamental antagonism between bourgeoisie and proletariat.10

There is a certain amount of material in the Marx-Engels correspondence of the 1850s which illuminates their views on the issue. Mostly this is commentary on English politics - commonly attacking the free-traders for political weakness and hypocrisy.11 There is a little more substance in Engels’ comment to Marx on American politics:

As for protectionism, it does no harm. American Whigs are all industrial protectionists, but this by no means implies that they belong to the landed aristocracy, Derby variety. Nor are they so stupid not to know just as well as does List that free trade suits English industry better than anything else.12

Marx also offered sarcastic comment on American economist Henry Carey’s combination of pro-marketism with advocacy of protection.13

An 1855 letter of Marx to Lassalle reaffirms the argument that free trade tends to depress wages: “As for wages in the factories …, it can be proved beyond doubt that the repeal of the Corn Laws (1) has had no influence whatever on absolute wages; (2) has contributed to depress relat[ive] wages.”14

Engels 1880s

The issue resurfaces a good deal later, in the 1880s. Marx’s 1848 speech and much of the 1850s correspondence targeted mainly the radical pretensions of the free-traders. A little of this continued: a letter of Engels to Marx in August 1881 and a related letter breaking off Engels’ relationship with George Shipton’s Labour Standard both attack the influence of free-trader ‘radicalism’ in the British labour movement.15 But Engels’ letters in the same period to Bernstein (March 12 1881) and Bebel (May 16 1882) show a new political opponent being addressed: the influence of the nationalist-statist Kathedersozialisten (‘professorial socialists’) on elements of the German socialists leading to inappropriate upvaluing of state interventions and protection.16 Thus, the letter to Bebel criticises Paul Singer:

He belongs to those who regard the nationalisation of anything as a semi-, or at all events pre-, socialist measure and are therefore secret devotees of protective tariffs, tobacco monopoly, nationalised railways, etc. These prevarications are the legacy of the unduly one-sided fight against Manchesterism and, because they facilitate debate in a middle-class and ‘eddicated’ environment, enjoy a considerable following, particularly among those bourgeois and academic elements who have come over to us.

The continuing debates of this sort form the plain political context of Engels’ 1888 preface to the translation of Marx’s 1848 speech.17 Here, as I said, Engels’ fire is more strongly concentrated on the protectionists than on the free-traders. Indeed, he ‘spins’ the 1848 speech in this direction:

While recognising that protection may still, under certain circumstances - for instance, in the Germany of 1847 - be of advantage to the manufacturing capitalists; while proving that that free trade was not the panacea for all the evils under which the working class suffered, and might even aggravate them; he pronounces, ultimately and on principle, in favour of free trade.

To him, free trade is the normal condition of modern capitalist production ...

This is hardly the Marx who argues in the 1847 speech that “All the destructive phenomena which unlimited competition gives rise to within one country are reproduced in more gigantic proportions on the world market”.

Engels does, in fact, argue that protectionism is justified for developing countries and infant industries. His case against it is that it is difficult to get rid of it when there is a need to do so; and he argues that Germany, the United States and France have passed beyond the need for protection to the need for free trade, in order to press their industries to become more efficient. After a good deal of concrete discussion of this sort, he returns, towards the end, to Marx’s 1848 argument that free trade will exacerbate capitalist contradictions, and therefore bring on the revolution. The AWL document reproduces this passage (quoted above), but without its sting:

The question of free trade or protection moves entirely within the bounds of the present system of capitalist production, and has, therefore, no direct interest for us socialists who want to do away with that system.

Indirectly, however, it interests us, inasmuch as we must desire the present system of production to develop and expand as freely and as quickly as possible [here the AWL quote ends]: because along with it will develop also those economic phenomena which are its necessary consequences, and which must destroy the whole system: misery of the great mass of the people, in consequence of overproduction. This overproduction engendering either periodical gluts and revulsions, accompanied by panic, or else a chronic stagnation of trade; division of society into a small class of large capitalists, and a large one of practically hereditary wage-slaves - proletarians, who, while their numbers increase constantly, are at the same time constantly being superseded by new labour-saving machinery; in short, society brought to a deadlock, out of which there is no escaping but by a complete remodelling of the economic structure which forms it basis.

Nor is this in fact the conclusion of the article. Engels goes on to ask, “If free trade is stated to be revolutionary, must not all good citizens vote for protection as a conservative plan?” And he answers:

If a country ... should reject free trade and stick to protection, in order to cheat the socialists out of the expected social catastrophe, that will not hurt the prospects of socialism in the least. Protection is a plan for artificially manufacturing manufacturers, and therefore also a plan for artificially manufacturing wage-labourers. You cannot breed the one without breeding the other.

The wage-labourer everywhere follows in the footsteps of the manufacturer; he is like the ‘gloomy care’ of Horace, that sits behind the rider, and that he cannot shake off wherever he goes. You cannot escape fate; in other words, you cannot escape the necessary consequences of your own actions. A system of production based upon the exploitation of wage-labour, in which wealth increases in proportion to the number of labourers employed and exploited, such a system is bound to increase the class of wage-labourers: that is to say, the class which is fated one day to destroy the system itself ...

This conclusion effectively calls into question the prior argument. If it is true that both protection and free trade would equally tend to undermine capitalism - the first by producing social polarisation and absolute immiseration, leading to radicalisation, the second by strengthening the numbers of the workers along with the activity of industrial capital - it is at the very least not obvious that the right choice for the labour movement is to go for free trade.

Questionable

The result is that Engels’ arguments in favour of free trade (and, following him, those of the German Social Democratic Party and the Second International) turn out actually to depend on the concrete claim that, after full industrial development, free trade will strengthen the relative economic position of the country which practises it. This claim is an empirical one, testable against economic-historical evidence, and is in the highest degree questionable. I will return to the issue in the next article.

I do not mean by these points to say that the labour movement should advocate protectionism. There are, on the contrary, arguments for us to advocate common action of the working class on an international scale, and so on. There are also arguments for us to follow Marx and Engels by paying attention to exposing both free-trader ideologies and scams, and protectionist ideologies and scams - and, again like Marx and Engels, to shift the weight of the polemic, depending on the degree of influence of one or another side in the labour movement. I will return to these issues in the second article.

My point is at this stage merely that, in the first place, the statements of Marx and Engels on the issue do not support the argument they are made to support by the AWL. Secondly, that these particular arguments are in any case very unsatisfactory, since they are arguments for absolute immiseration leading to radicalisation and revolution, and for the workers’ movement seeking to intensify capitalist contradictions and thereby tending to produce an early Zusammenbruch or Kladderadatsch (general breakdown of capitalism). Neither looks like a workable strategic line for working class power.

It is for this reason that we will need, in the second article, to look in extreme outline at the history of free trade and protectionism and at what this sort of outline can tell us about the political economy of both, before returning to the question of a political responses to the global nationalist turn.

mike.macnair@weeklyworker.co.uk

Notes

1. The alternative, for (for example) the Spartacists, is the refusal of united action on the basis that this will inevitably compromise political independence. This still assumes Dimitrov’s conception that united action depends on self-censorship, merely using it as a ground to reject united action.

2. ‘AWL, Iraq and “new imperialism”Weekly Worker July 29 2004; ‘Imperialism lives on’, August 5 2004; ‘Imperialism versus internationalism’, August 12 2004; ‘Imperialism and method’, September 23 2004. Compare also my introduction to B Lewis and M Zurowski (translators) Karl Kautsky on colonialism November 2013, and ‘Rethinking imperialismWeekly Worker October 3 2013.

3. See, for example, ‘Japan’s rising nationalism enrages Asia’ The Guardian July 15 2001; ‘Abe’s revisionism and Japan’s divided war memories’ Japan Times August 22 2015.

4. The text continues with a quotation from Lenin in 1902, describing the free-trade agitation of the German Social Democratic Party. Since this is merely about the nature of campaigning activity, it adds little to the Marx and Engels quotes.

5. There is a useful discussion by Rick Kuhn at https://openresearch-repository.anu.edu.au/bitstream/1885/11077/1/Kuhn_IntroductionGrossman2013.pdf.

6. I have argued this further in ‘Law and state as holes in Marxist theory’ Critique Vol 34 (2006), pp211-36.

7. Eg, the discussion by WJ Baumol: ‘Marx and the Iron law of wages’ American Economic Review No73 (1983), pp303-08.

8. CW Vol 6, pp287-88.

9. Ibid pp279-81.

10. ‘Protective tariffs or free trade system’ CW Vol 6, pp92-95.

11. Eg, Engels to Marx, March 2 1852 CW Vol 39, p57, on the Derby government; Marx to Engels, March 5 1852, p59, on Mazzini’s enthusiasm for the British free traders; Engels to Marx, November 29 1852, pp252-53, on Cobden’s disappointed hopes of office; Marx to Engels, January 29 1853, p275, on the Economist’s hypocrisy in supporting measures against the export of money. CW Vol 40 at pp104, 113, 115-116, 127 has similar jibes at the English free-traders and protectionists.

12. Engels to Marx, August 6 1852 CW Vol 39, p147.

13. Marx to Engels, June 14 1853 CW Vol 39, pp345-46. The point resurfaces in the fragment, ‘Bastiat and Carey’, in the Grundrisse (www.marxists.org/archive/marx/works/1857/grundrisse/ch17.htm#bastiat).

14. January 23 1855 CW Vol 39, p514.

15. Engels to Marx, August 11 1881 CW Vol 46, p121; Engels to Shipton, August 15, pp122-23.

16. CW Vol 46, pp260-61.

17. www.marxists.org/archive/marx/works/1888/free-trade/index.htm.