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New International, January 1948


Notes of the Month

Compulsory Free Trade at Havana


From The New International, Vol. XIV No. 1, January 1948, pp. pp.4–5.
Transcribed & marked up by Einde O’Callaghan for ETOL.


The most cynical sideshow in the UN is going on at Havana. At the International Trade Conference there, the United States delegation is busy winning the peace – its own peace.

The issue is exceedingly simple: thirty-six of the fifty-eight sovereign nations represented are in favor of defending themselves against US economic penetration by tariff protection and import restrictions – naturally, tariffs and restrictions on US goods in the first place. Therefore, evidently from the loftiest motives of world peace and harmony, the good neighbors from up north take an opposite view of what should be done.

They are for the creation of an International Trade Organization with real authority to reduce national restrictions on trade. The line-up: the US, England and most Western European nations versus nearly all the economically backward countries of Latin America and the Near East, led apparently by Argentina.

The argument of the latter bloc is also simple. It was given a century and a half ago by Alexander Hamilton in his famous Report on Manufactures: they have to protect their “infant industries,” industrialize their economies, cease to be agricultural dependencies of Wall Street. This argument is reinforced by an even stronger one: namely, this bloc has an easy majority of the conference.

Filibustering for the minority is Clair Wilcox, acting chairman of the US delegation. He has two themes. One is strictly for the use of the conference stenographers – at any rate, it goes mainly into the minutes:

If this is to be the outcome of our negotiations here, I say that all our hopes for expanding trade, raising the standard of living, promoting economic development and achieving world peace are doomed to failure.

The stumbling-block is the fact that the majority countries are in favor of expanding their own trade, raising their own standard of living, promoting their own economic development – and nobody is very much interested in world peace. And so Wilcox swings that indispensable piece of equipment of the good neighbor, the economic big stick. If the ITO is not given its teeth, then –

Other countries may be told when they approach us with their goods that they can sell to us, but only up to a certain limit. They may be told that they cannot sell to us unless they agree to take specific quantities of specific goods in return. They may be told that they cannot sell to us unless they modify policies we do not like. They may discover, when they attempt to sell in other markets, that we have been there first to freeze them out.

Mr. Wilcox happily admitted that the US was prepared for such a struggle and confident of its ability to withstand trade limitations better than less developed countries. He then cleared up certain natural misconceptions by adding: “I do not utter these words as a threat ...”

Wilcox Vindicates Engels

The spectacle of protectionist United States appearing as the champion of world free trade is a model of bland hypocrisy, but it is as economically understandable as the position taken by the small-country bloc.

Regarding the latter Karl Marx explained:

The system of protection was an artificial means of manufacturing manufacturers, of expropriating independent laborers, of capitalizing the national means of production and subsistence, and of forcibly abbreviating the transition from the medieval to the modern mode of production. [Capital]

In his introduction to Marx’s pamphlet Free Trade, Engels relates how he explained to a Scotch manufacturer why the Americans prefer to pay tribute to native industrialists when they could buy the same or a better article from England more cheaply, why they do so in the expectation that in twenty-five years they would be able to hold their own in the open world market. He adds:

Protection, being a means of artificially manufacturing manufacturers, may, thefore, appear useful not only to an incompletely developed capitalist class still struggling with feudalism; it may also give a lift to the rising capitalist class of a country which, like America, has never known feudalism, but which has arrived at that stage of development where the passage from agriculture to manufactures becomes a necessity. America, placed in that situation, decided in favor of protection. Since that decision was carried out, the five and twenty years of which I spoke to my fellow traveler have about passed, and, if I was not wrong, protection ought to have done its task for America and ought to be now becoming a nuisance. [Our emphasis – Ed.]

As often, Engels was a bit previous in his time-coefficients, but it is not just lately that protection has become a nuisance for American capitalism. U.S. unchallenged dominance in the post-war world, however, has now made protectionism an absolute brake on that further expansion which alone can relieve the pressure of

“... ever more rapidly increasing and concentrating capital ... Thus the passage from a home to an export trade becomes a question of life and death for the industries concerned; but they are met by the established rights, the vested interests of others who as yet find protection either safer or more profitable than free trade.” (Engels)

Here are both sides of the question at Havana. Both blocs are fighting for life; but life for American capitalism means unbridled economic rule throughout the world.

It is true that in a real sense, the small-country demand for defensive restrictions on imports places a reactionary limitation on the full flowering of world exchange; in the same sense that Haile Selassie was defending an outlived feudal society against Mussolini. World socialism will make restrictive and protectionist practices unnecessary through planned free trade, just as it will make it possible to jerk Ethiopia through telescoped centuries of economic development. But the main impact of Ethiopia’s fight for freedom was the blow it struck at the main enemy in the world, imperialism; and the main impact of the small-nation fight at Havana would lie, if successful, in its weakening of the underpinnings of Yankee imperialism and its stimulus to the development of an industrial proletariat in the now backward countries.

Socialist Versus Liberal Policy

These are the objective consequences. “Do not imagine, gentlemen,” said Marx in his above-mentioned speech on free trade, “that in criticizing freedom of commerce, we have the least intention of defending protection. One may be opposed to constitutionalism without being in favor of absolutism.” Engels added:

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; 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.

In 1848 Marx opined that

“the protective system in these days is conservative, while the free trade system works destructively ... and carries antagonism of proletariat and bourgeoisie to the uttermost point. In a word, the free trade system hastens the social revolution. In this revolutionary sease alone, gentlemen, I am in favor of free trade.”

In the present relationship of the forces represented at Havana, the objective consequences are no longer the same as in 1848 Europe, but the criteria remain. In any case, as Engels pointed out, it is not the job of (say) the Latin American proletariat to give purely gratuitous advice to their capitalists on how to run their business.

What shall we say, however, of so-called liberals who (politely, of course) denounce the small countries at Havana for not submitting to the US plan for economic overlordship, echoing Clair Wilcox’s hypocrisies about expanding world trade? We refer to the Nation of January 10. In Wilcox’s big stick (about which, incidentally, it says not a word) it sees only the herald of the mythical “world federation,” of which the International Trade Organization (with canine teeth) is to be the first installment.

There could be no clearer light cast either on the nature of contemporary liberalism or on the objective meaning of the Utopian “capitalist world federation” illusion.

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