[Marxism] Phil Ferguson and Free Trade

Gould's Book Arcade ggouldsb at bigpond.net.au
Tue Feb 3 17:44:54 MST 2004

Phil Ferguson and Free Trade

By Bob Gould

Its nice to know that Phil Ferguson withdraws the accusation of racism
against Michelle O'Neill and myself, when Tom O'Lincoln, offlist, gently
chides him for being a bit over the top. Its even more ironic considering
that Ferguson associated my opposition to further reductions in tariffs in
the clothing and textile industry with my rejection of, as he puts it (more
or less correctly), of some parts of Lenin's theory of imperialism. The
irony is, that his mate Tom O'Lincoln, in my understanding, who shares his
general views on tariffs also, to my understanding, rejects more or less the
same aspects of Lenin's theory of imperialism that I do (I'm open to being
corrected by Tom if that's not the case). One's views on the detail of Lenin
's theory don't necessarily have a one to one relationship to one's views on
free trade and protectionism.

On the specific question, I'd ask this question of Ferguson: are marxists
obliged to be free traders? Does Ferguson favour, in all circumstances, the
abolition of all tariffs, because this seems to be his position?

I have a different view, which I don't pretend to say is necessarily the
same view held by Michelle O'Neill, though I agree with her specific motion
on tariffs in the clothing and textile industry. As a marxist, I am neither
a free trader, nor a protectionist. Over a long life (Phil Ferguson seems to
consider relative longevity some kind of political crime.) I've consistently
opposed, from a marxist point of view, the Stalinists and right-wing
social-democrats who have raised propositions for increased tariffs as some
kind of radical or socialist program. Campaigning for increased tariffs is
always a nationalist diversion from the socialist struggle.

Existing tariffs are a somewhat different question. Tariffs in most
countries are a product of contradictory forces and pressures in politics
and society. The push for the abolition of existing tariffs is almost
entirely driven by finance capital and the ruling class, who advance a
fantasy of free trade, so as to impose the hegemony of finance capital and
corporations on the world. There is a broad popular resistance in all
countries, including third world countries, to this kind of free trade.
While not idealising this too much, socialists ought to resist this
bourgeois pressure for what the ruling class call free trade.

Concretely, the existence of some tariffs in particular industries directly
underpins the standard of living and wage levels of workers in those
industries. This is particularly the case, in Australia, in some light
industries, particularly textile and clothing. Its worth noting that the
overwhelming majority of workers in the TCF industry, like blue-collar
workers in many sectors of industry in Australia, are now drawn from the
ranks of non-English speaking background migrants. Most of them from third
world countries where trade unions are battered and oppressed and low-wages
tend to prevail. Its reasonably clear that the prospect of getting work in a
higher scale wage framework is one of the factors that has brought these
migrants to Australia in the first place. The sectional interest of these
workers in protecting their wage levels has to be addressed as part of a
correct marxist approach to this question.

In this area, as in all others, there is no substitute for empirical
enquiry, information and concreteness. Tom Bramble's excellent article on
tariffs and the fair trade debates, in the Journal of Australian Political
Economy, clearly indicates that in every industry, with the exception of the
TCF industry, there is no significant connection between tariff reductions
and job losses. Much more significant is the development of the forces of
production, and consequent technological unemployment, together with a
ruling class offensive around productivity and job losses. The TCF industry,
however, shows a correlation between tariff reduction and job losses which,
in this otherwise excellent article demolishing the protectionist arguments,
Bramble fails to account for.

The bourgeoisie, in justifying tariff reductions, without acknowedgement,
echo Marx's position on the Corn Laws in 19th Century Britain. In this he
points out that one aspect the Corn Law tariff was that it inflated the cost
of wheat and therefore bread that was sold to working class buyers, thereby
eating into their wages and standard of living. It is true that, to some
extent, the effect of tariffs is to increase the cost of goods to consumers,
as the free marketeers claim.

However, these things go in anything but a straight line. Prices of consumer
goods are not simply dictated, in modern capitalist economies, by the raw
cost of production. Imperialism and monopolisation distort the prices, and
the prices are actually dictated by a more nebulous, but nevertheless quite
real, phenomenon, 'What The Market Will Bear'. Many of the goods imported
with a very low wage component end up being sold to consumers at 20 or 30 or
50 times their initial cost of production, and very close to the price of
the commodity produced under conditions of limited tariff protection. There
is a significant 'super-profit' between the prices of the local producers,
and the prices of the important product, even after the tariff markup. There
is little evidence that the removal of the tariff would do anything much
more than increase that super-profit, at least in the forseeable future.
Genuine free trade is impossible under conditions of imperialism, until
after the socialist revolution.

The TCFUA, at least in Victoria, under Michelle O'Neill's leadership, tend
to associate a number of things together. They fight hard to organise
outworkers, and raise their wages, they fight hard for wages increases for
their members, and they exert a considerable amount of pressure on employers
to try to force them to introduce better and more efficient machinery and
better training. They are also pretty active in support of refugees and in
support of trade union rights and struggles in third world countries.

The two or three waves of tariff reduction in the TCF industry have largely
been imposed by right-wing Labor governments, which were also conspicuous in
their lack of concern for trade union rights and basic democratic rights in
third world countries, an example of which is the outrageous acquiescence to
the practices of the Suharto regime in Indonesia, and the acquiescence to
the lack of real trade union rights, particularly in China, the main country
to which TCF production is being transferred. Taking all the above
considerations into account, it seems to me to quite principled from a
socialist point of view to specifically oppose further tariff reductions in
the TCF industry if it is associated with, as it is by the leadership of the
TCFUA in Victoria, campaigning for union rights and better wages and
conditions in third world countries as well.

There is no doubt that a socialist government in Australia would ultimately
abolish all tariffs, but this abolition would take place in combination with
a dramatic reduction in the working day, the retraining of displaced
workers, and the wholesale transfer of work into useful areas. To some
degree an international division of labor would be of substantial economic
benefit to a socialist government in Australia and would make all tariffs
redundant. However as most people will be aware, we're still a fair distance
from international socialism, and to expect even a significant part of this
program from the conservative, capitalist governments of today, under
conditions of working class retreat, is fundamentally utopian.

What is the alternative? If its unprincipled, from a socialist point of
view, to oppose further tariff reductions in the TCF industry, what is Phil
Ferguson's 'marxist' alternative? Is it, as it seems to be, consistent
support for the capitalist free market and free trade, and the abolition of
all tariffs? Where's the marxism there?

PS. One of the curiosities of this particular issue is that it is my
understanding that the leadership of the DSP, with whom Phil Ferguson likes
to agree from time to time, have a similar point of view to mine on this
question. Despite the fact that they support every comma of Lenin's theory
of imperialism. Does this make them nationalists too?

Gould's Book Arcade
32 King St, Newtown, NSW
Ph: 9519-8947
Fax: 9550-5924
Email: bob at gouldsbooks.com.au
Web: www.gouldsbooks.com.au

More information about the Marxism mailing list