The Socialists Who Supported Free Trade
Many socialists think that protectionism benefits the poor. But these views deviate from the free trade tradition that can be found in some corners of socialist thought. Like liberal economists in the nineteenth century, some socialists also argued that protectionism served the interests of corrupt entrepreneurs. The forgotten contribution of socialists to the free trade tradition is clearly fleshed out in an article titled “Marx and Manchester: The Evolution of the Socialist International Free-Trade Tradition, c.1846-1946,” featured in The International History Review.
For scholars interested in unlocking the complex relationship between socialism and free trade this article is a must-read. Marc-William Palen ably disputes the notion that socialists are universally in favor of protectionism. However, he admits Marx and Engels proposed free trade because of the perception that it accentuated the socialist revolution: “Marx and Engels viewed the international turn to free trade as an advancement of the global capitalist project, the dawn of a new epoch of capitalist internationalism. For Marx, free trade was a progressive condition of industrial capitalism, moving it a step closer to socialist revolution. Protectionism, by contrast, was regressive and belonged to the pre- and proto-industrial capitalist era. For Marx’s close friend and patron Friedrich Engels, too, free trade was preferable to protectionism as the former would ‘expand as freely and as quickly as possible’ the capitalist system and thus hasten the destruction of ‘the whole system.”
Based on Palen’s presentation it appears that Marx and Engel advocated free trade due to the assumption that it would accelerate revolution. Yet he offers evidence indicating that both expressed genuine dislike for protectionism. Like classical liberals, Marx perceived protectionism as a function of backward economies. As Palen notes his condemnation of protectionism as archaic is quite revealing: “People are thus about to begin in Germany with what people in France and England are about to end. The old corrupt conditions against which these countries are rebelling in theory and which they only bear as one bears chains, is greeted in Germany as the dawn of a beautiful future.’’
Engel in his description portrays protectionism as being “at best an endless screw, and you never know when you have done with it. By protecting one industry, you directly or indirectly hurt all others, and have therefore to protect them too. By so doing you again damage the industry that you first protected and have to compensate it . . . and so on ad infinitum.” Interestingly, even Marx thought that protectionism fueled interstate conflicts, since antitrade policies could be construed as an act of aggression.
The tendency of protectionism to lead to war was also asserted by Karl Kautsky, as Palen reminds us: “The higher the tariff barriers between individual capitalist states grow, the more each of them feels the need to assure itself of a market which no one can exclude them from, and to gain supplies of raw material which no one can cut off,’ thereby creating an ‘arms race’ that ‘must grow ever greater and the danger of a world war come ever nearer.” In this arena, Kautsky, is like Kant who taught that trade nurtured international peace.
Probably, in the socialist tradition Eduard Bernstein is the most strident critic of protectionism. As such, Palen will be cited at length:
Like Kautsky, Bernstein was consistent in his support for free trade over the course of his socialist political career. Bernstein believed free trade was not only progressive but also good for both the proletariat and the bourgeoisie. Also, like Kautsky (and Marx), Bernstein condemned List-inspired ‘infant industrial’ protectionism for creating geopolitical tensions and for being reactionary and atavistic, a throwback to the era of mercantilism and a stumbling block to modernization. His critique of militarism – for which he blamed jingoism, nationalism, protectionism, and the undue influence of arms manufacturers on German policymaking — owed much to the influence of later Engels. And like Kautsky, Bernstein’s critique shared much in common with Hobson and Schumpeter, as did his belief that free trade and industrialism were the foundation stones of a peaceful economic order, such that R. A. Fletcher posits that Bernstein was ‘not only fundamentally more British than German but also thoroughly imbued with the values of Cobdenite radicalism.
Moreover, the hostility of some socialists to protectionism was not unique to Europe. Palen contends that during the Great Depression, American labor leaders were vehemently opposed to protectionism:
A Marx-Manchester ‘utopian’ planned supranational vision of free trade and peace prevailed not only among European socialist federal unionists, but also among socialist internationalists in 1930s and 1940s America. Under the political and intellectual leadership of Norman Thomas and Scott Nearing, American socialists renewed their Marx-Manchester commitments in response to the Great Depression and continued Republican protectionism.
Palen singles out Thomas for his raging denouncement of protectionism: “Under his leadership, the Socialist Party of America made sure to single out the GOP’s protectionist 1930 Smoot-Hawley Tariff, calling it ‘the most monstrous tariff legislation in the history of the country. . . . It has, in effect, declared economic war against the rest of the world and served to aggravate the instability of world economy and world trade.” Clearly, unlike their contemporary counterparts, socialists in an earlier tradition understood that protectionism did not elevate the poor.
Yet despite the evidence against protectionism as a tool to improve living conditions, it is gaining traction on the left and right. But socialists and their friends on the right can save us from the dangers of protectionism by applying the wisdom of the maverick thinkers discussed in this piece. I urge them to read Dr. Marc-William Palen.