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BRITAIN'S CRISIS
BRIANS
INDHSTRY
IMPORT CONTROLS
Alan Handm
are import controls the
answer?
By Alan Woods
answer
By Alan Woods
The frightening collapse of Britain's economic power, bringing ruination to entire industrial areas and communities, has compelled ever wider layers of the trade union and labour movement to come to grips with the new situation brought about by the crisis of capitalism.
Confronted with this terrible spectacle of decay and destruction, a significant section of the movement is desperately seeking a way out, but has yet to accept psychologically the need for a decisive break with capitalism as the only way of saving the new generations from a future of mass unemployment, misery and degra-
dation.
Amongst the leaders of the trade unions and the Labour Party there is a frantic searching after panaceas which might, so they fervently hope, make things a little better within the confines of the "mixed" economy—i.e. within the straitjacket of capitalism.
The most graphic expression of the decay of British capitalism, and the one which most easily captures the popular imagination, is the avalanche of cheap foreign imports which has reduced whole branches of industries to rubble with the same ease as the siege engines of medieval armies battered down the walls of enemy castles.
The call for import controls, a remedy easily understood and apparently just as easy to apply, nas all the power of attraction as an instant "miracle cure" for a paintul and unpleasant disease. But in economics, as in medicine, woe betide him who applies the remedy before carefully analysing all the consequences and side effects!
The latest and most seriows attempt to defend the idea of import controls is the document 'Import Controls Now', published by TASS.
The authors of this document are to be congratulated on the impressive array of factual material with which they illustrate the decisive
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defeat of British industry, not only
on a world scale, but on the home
market also.
The result is a devastating
indictment of the self-styled "cap-
tains of industry" , who have
systematically looted British in-
dustry for decades in their short-
sighted greed for easy profits.
"Between 1960 and 1976," the
document explains, "our rate of
growth of industrial output was less
than half that of our main
competitors-about 2 per cent
compared with their 4 to 5 per cent (and 10 per cent in the case of Japan). This slower rate of expansion has been accompanied by a lower rate of investment. In 1976 for example, investment per worker in manufacturing in Britain was half or less the investment per
velgium and the Netherla, Asa nee
rrance result has been that productivity in these countries-output per man hour in manufacturing—has grown much faster than ours. Thus productivity in manufacturing in the UK in 1974 was nearly 40 per cent lower than that in West Germany or France, whereas twenty years earlier it had been much the same in the three countries. Since 1974 the gap has widened: manufacturing productivity up to 1978 rose by 17-18 per cent in West Germany compared to 4 per cent in Britain." (p5, my emphasis, AW)
The document proves its point with a wealth of statistical data, dealing with many branches of industry. British Leyland is a case in point. Quoting from the company's own reports (page 15), the document proves irrefutably that: "The biggest gap between BL's performance was in the early 1970s when it was privately owned."
The Ryder report of 1975 states clearly that: "In the automotive industry most manufacturing equipment is replaced after 8-12 years. In BL more than half the machines and equipment are over 15 years old." And the same report goes on to show how the money which should have been invested in
new models and new equipment was frittered away in hand-outs to the shareholders:
"Despite the low level of profit BL has over the period distributed nearly all of them as dividends. In our view this policy was clearly wrong." (page 15, emphasis in original
The case of BL is typical of large sections of British industry, which, after decades of neglect and underinvestment, now find themselves hopelessly outclassed by com petitors in the USA, Japan, Western Germany, and even formerly backward France and Italy.
Yet having taken great pains to show the real cause and culprit for the relative decline of British industry, the authors of the document then resort to a most peculiar mode ot reason to justity import controls as the alternative.
In the first place, they appeal to such unlikely "authorities" as the CBI Conference, the chairman of the British Institute of Management and Tory MP Alan Clark, in support of their position.
Selective Controls'
Now, as any worker knows from bitter experience, any economic policy that is defended by the bosses is ninety-nine per cent certain to be in direct contradiction to the interests of working people. Far from being a conclusive argument, the fact that the most died-in-the-wool reactionaries of the Tory Party and the CBI are now "coming round" to the idea of import controls should make us think twice before adopting the same position. Why are these Tories and wealthy industrialists calling for import controls? What interests lie behind this? And in whose benefit would this policy work?
What is more to the point: if import controls are such a good idea, why have they not been introduced up till now? What
5
concrete affect would their intro-
duction have on jobs, prices and
productivity? These are the ques
tions every thinking worker should
ask himself before joining in the
protectionist chorus.
The advocates of import controls
argue that they would afford
British industry, or rather specific
sections of it, the necessary
protection, guaranteeing at least
the domestic market for home
industries, and allowing the capit-
alists the time they need to re-tool
and re-equip industry. That task
having been accomplished, the
"temporary" measure of import
controls can be dispensed with and
Britain can once again become the
"workshop of the world."
Secondly, they argue that con-
trols would only apply to those
parts of the economy which were
seriously threatened. Almost no-
one argues in favour of general import controls, but only "selec-
tive" ones.
The arguments sound plausible.
But on closer examination, they do
not hold water.
Firstly, the difference between "selective" and general controls is more apparent than real, because, at the present time, almost every section of British manufacturing industry is under threat. As the CBI admits in a recent report: "All British manufacturers of consumer goods and other standard technological products will become vulnerable in the 1980s." ('The Times', 7 January). Textiles, steel, motor-bikes, cars, televisions, radios... the list is endless. And let us be clear on one point. What is at stake is not at alla peripheral question affecting unimportant sectors of the economy. On the contrary. Import controls would have to embrace the decisive parts of manufacturing industry-that is, precisely those sections which, on a world scale, are presently subject to the most cut-throat competition.
This is precisely the reason why, up to the moment, the decisive sections of the British capitalist class have baulked at the introduction of protectionist measures,
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at least in an open and undisguised form. They fear the prospect of retaliation from their foreign rivals which would seriously damage the British economy, heavily dependent on world trade.
The risk of retaliation is cavalierly dismissed by the TASS document. Yet historical experience shows that it is real enough.
When the Wilson government introduced the Temporary Import Surcharge, it was forced to abandon it ignominiously after two years, under threat of massive retaliation and the breakdown of EFTA. Yet this measure was far less ambitious than what is now being proposed, and, moreover, was introduced in a period of world economic expansion. Any attempt to close the door in the face of foreign products in a period of economic recession would provoke a stormy reaction on the part of Britain's rivals, especially in the EEC.
Of course, there's no honour among thieves. Disguised import controls have existed for a long time, in the form of quotas, state subsidies and a whole gamut of legal regulations tending to limit imports and protect "national" industries. The steady growth of these tendencies is an expression of the cutthroat competition in a situation of contracting world markets.
But were the British capitalist to "break ranks" and introduce open import controls, that would undoubtedly invite retaliatior, and what would be gained on the swings would be more than lost on the roundabouts.
If all countries resorted to protectionism, the workers would be no better off and the capitalists would be no better off. But over a period of time, world trade would contract, with disastrous consequences for economic growth and unemployment on a world scale.
The prospect of a return to world-wide protectionism, and the collapse of the delicately balanced mechanism of world trade which has been established over the last three decades, fills the strategists of
ina..
Mill,
go g
subsidised, "protected' and used cheap imports to
make bigger profits.
na.
through owners' refusal to invest in new technology. HID
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capital with horror.
They understand that one of the basic features which sustained the general upswing of capitalism from 1945 to 1974 was precisely the lowering of tariff barriers and the expansion of world trade to an unparalleled degree. This in turn enabled capitalism to partially overcome-at least for a temporary historical period—one of the fundamental obstacles to the growth of the productive forces-the national state. The erection of new tariff barriers, of retaliation and counterretaliation, and the kind of open trade war which took place in the period between the two world wars, would produce a downward spiral in world trade, and even the possibility of another 1929-type crack. It is this, and not any consideration for the principles of "fair play" which has restrained the British, American and other capitalists from resorting to import controls-at least up till now. Yet the TASS document has barely a word to say on all this.
Many workers, who still have the illusion that it is possible to find a way out on the basis of capitalism, are prepared to embrace import controls as a seemingly "practical" solution to unemployment in the short run. In reality. they are no such thing.
import introdus mi or see sia"
The introduction of "selective" import controls might well save some industries, at least for a short period, but only at the expense of the others. The increased price of goods which would inevitably flow from such a measure would lead to a reduction of the ability of British workers to buy other products, thus provoking crises in other sections of the national economy. It would only mean the transference of unemployment from one industry to another.
As for the argument that British industry needs a "breathing-space" to allow the capitalists to re-tool and re-equip behind the safety of tariff barriers, this simply flies in the face of all previous experience.
The greedy parasites who control the flow of life-blood to British industry, whenever they have been
given the chance to make extra profits, have not ploughed these back into industry but squandered them in higher dividends or invested them in purely speculative activity.
When the Wilson government devalued the pound by 14%—a measure, it should not be forgotten which the Tribune Left had campaigned for with the same ardour with which they now embrace import controls-the British bosses did not make use of the opportunity to export British goods more cheaply, but simply raised their price to make a quick killing, while the British workers and their families were left to foot the bill in the form of higher prices.
So much for the economic justification of protectionism. But for socialists the matter does not end here. For behind the clamour of the most right-wing sections of the Tory Party for import controls there lurks a real threat to break down the class consciousness of the workers and to replace the instinctive bonds of class solidarity —nationally and internationallywith the venom of nationalism
Japanese 'Danger'
This Tory MP Alan Clarkapprovingly quoted in the TASS document-explains his support for protectionism in purely political terms:
"The siege economy' is a pejorative term," he gloats in the pages of "The Times' (7 March); "but within its definition is that latent nationalism and pride which even the most cynical (!) may hope to feel once more and without which no great political endeavour can succeed."
Of course, it comes as no surprise that members of the Tory party, that traditional party of protectionism, can come up with this reactionary nationalist claptrap. But for representatives of Labour (and of Labour's left, at
7
that) to appear on a common platform with these Tory gentlemen is utterly unacceptable, and shows precisely where the defence of import controls ultimately leads: to
• "common front" of British workers with British bosses against foreign workers and their employers.
The blame for the appalling decline of British industry lies fairly and squarely on the shoulders of the British capitalists. This is clear from the material published in the TASS document itself. It is also clear to any thinking worker who pauses to reflect on the state of his own industry.
Not long ago the journal of the Sheet Metal Workers' Union published an interesting article based on the experience of a group of trade unionists in Coventry, concerned at the inability of the machine tool industry to compete with foreign rivals.
The workers who made up the Coventry Machine Tool Workers' Committee had set out precisely with the idea that "unfair competition" from imported Japanese lathes were responsible for the loss of jobs in their industry, and even imposed a successful campaign of "blacking" against the Japanese products.
"One of our main concerns, said Gordon Woodhall, chairman of the joint shop stewards at Wickman Machine Tools Ltd, "was not just the question of imports, but that those from Japan with their own stringent import laws, did not allow fair trading. But our continued investigations into job losses in the industry led us to realise that Japanese imports were not the main danger confronting our job security." (My emphasis, AW)
On the basis of a careful examination of the facts, the Coventry workers discovered that the plight of their industry was not due to "unfair foreign competition." "It soon became evident to them that the decline had started well before any major penetration of the home market." And the article goes on to explain:
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ARTM
Part of the 15,000 strong demonstration in Cardiff during last winter's steel strike. "Workers must rely their own strength."
*Between 1965 and 1970, Alfred Herbert (then boasting they were the largest machine-tool producer in Europe'-but later being bailed out by a Labour government) made £8.7 million profit-but distributed £9.2 million in dividends!"
"Lack of capital re-investment in design and development in the early 70s led to the industry becoming vulnerable to foreign competition due to its relative backwardness. Not only have the 'captains of industry' led the machine tool industry into its present blind alley; they have also put under threat of dispersal the pool of technical skill which is the lieteblood of a thriving machine tool industry." (My emphasis, AW)
These lines are highly instructive because they show how at least certain of the most advanced layers of the class have come to understand, through their own experience, that import controls are not the answer to unemployment.
Karl Marx explained over a hundred years ago that neither "free trade" nor "protection" could solve the problems of the working class.
The attraction of import controls is that it appears to provide an easy way out. The innate conservatism of the human mind, which always lags behind the development of the productive forces and technique, and resists the idea of fundamental change until it is forced upon it by
the categorical imperative of social development, means that the great majority of society, including the working class, will desperately seek solutions which do not imply a sudden and decisive break with the past. In the first instance, many workers will seek the "line of least resistance." All sorts of "quack" theories and panaceas will come forward to meet this demand. The leaders of the TUC and Labour Party, many of them for the sincerest motives, are putting forward all kinds of ways of shoring up decrepit and decaying capitalism. They do not see that, by so doing, they are merely prolonging the death-agony of the system and lending it a more violent and
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convulsive character. The dialectical contradiction of reformism— and especially of its most "left" variety-is that it always succeeds in achieving results that are diametrically opposed to its original intentions.
The advocates of import controls among the leaders of the TUC and Labour Party imagine they are being "practical"
, when in reality they are being They utopian.
imagine they are defending a socialist policy, when in reality, as the TASS document shows, they are prodding the workers along a path marked out by the sharks of the CBI and the most reactionary sections of the Tory party. Just as in the case of devaluation (which the Tribunite leaders today prefer to forget), the left reformists are doomed to have their clothes robbed-this time, in all probability, by the Tory government And how will the Tribune MPs react when Thatcher successor) is finally forced to do a and introduce import controls? Will they really welcome it as a great victory for principles? Do they really imagine it will serve the workers' interests and solve the problem of unemploy- It is the task of a leadership to lead, not to tail-end the bosses and their representatives. The hue and cry over import controls is no substitute for a fighting socialist policy against redundancies and factory closures. It only serves to divert the workers' attention from the fundamental issues.
Indeed, it seems that the supporters of import controls have half realised that they are barking up the wrong tree. They seek to together, tectionism wich such phrases as "planned growth of trade" What is the meaning of this? How can trade be "planned" under capitalist anarchy? If the phrase is to mean anything at all it must as a minimum, a state mean, monopoly of foreign trade. But this already presupposes the nationalisation of the banks and monopolies and a socialist planned economy. If this is what the advocates of the so-called "planned growth of trade" stand for, then 'Militant', the Marxist tendency in the labour saying import controls. Unfortunately, the substance of a thing does not change merely by altering the The authors of the document also hint at "trade union control" of the giant multinationals in order to resist trade between the nations. But if the trade unions were strong enough to impose their will on the capitalists on such fundamental questions as the flow of investment and the direction of trade, then they would also be in a position to expropriate the capitalists on an international scale. In the context of a socialist united Europe, with the dovetailing of the different economies and the mutual planning of the productive forces, it would be possible to achieve planned growth of trade as a logical consequence of the general planeconomy European, and ultimately, a world scale. In practice, the notion of all the European trade unions coming on earth could stop them. 9 for example, to persuade camouflage their defence of pro- Henry Ford to invest in the South of Italy is so preposterously utopian that it cannot be taken seriously. Instead of diverting the workers' attention from the central issue which is the fight against their own bosses, by pointing a finger at the "enemy without", the labour and trade union leaders should launch a serious campaign against redundancies, on the lines explained in the pages of 'Militant' and the 'MIR':
* No redundancies.
* No selling of jobs.
* Immediate introduction of the 35-hour week without loss of pay.
compensation on the basis of proven need of all industries in crisis.
* For a useful programme of public works, hospitals, council houses, schools, etc. Opposition to all cuts in the social services * For a socialist plan of production, based on the nationalisation, under workers' control and management, of the banks and the 200 monopolies as the only way of eliminating the nightmare of unemployment. Instead of advocating policies which inevitably lead to collaboration with "our" capitalists, the Labour leadership, especially those who claim to stand on the left, must teach the workers to rely on their own strength and trust only in themselves and their class organisations. Once these powerful forces were mobilised for the socialist transformation of society, no force
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