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Robert Henderson: A Case for Protection


Robert Henderson

As Sean has referred to my position on judicious protectionism here it is.

Economic history tell this story: a strong domestic economy is necessary for sustained economic growth and stability. The freer the trade with foreign states, the less stable and secure the domestic economy. It also tells us that the most effective general strategy to promote economic development in a country is to allow competition within the domestic market (where it does not create serious social discord) whilst regulating international trade through protectionist measures sufficient to maintain the general capacity of a country to point where it can maintain itself in an emergency such as war or blockade and be sovereign in most circumstances.This would require the judicious use of embargoes, tariffs and quotas to ensure that all the vital industries remain as a presence in Britain.

A few industries should be in principle wholly supplied from the British market. These are defence equipment and the various energy sources. The reasons for defence equipment provision being domestic are simple: any foreign supplier can cease to supply goods for political reasons or simply be unable to produce the goods when wanted at all or in sufficient quantities.

Energy supplies should be domestic because if they fail the whole of society is brought to a halt. Self-sufficiency in energy in any advanced country could be achieved in the medium term by nuclear power supplemented perhaps by new sources of energy such as wave and current power and bio-fuels.

A country should also build up a stockpile of essential materials such as metals and the minerals used in the chemical industry. Five years national supply should be a minimum.

A country should be able to feed its population from its own production at a pinch. In Britain this is possible with modern crop yields and animal husbandry. Crop yields are considerably greater than they were even in WW2 and the opportunities for increasing the volume of animal products have multiplied greatly over the past 60 years, for example, in the massive development of poultry farming since 1945.

75% of the market in every other vital industry should be reserved for the domestic market. What is a “vital industry”? Try these for starters: metal (especially steel), chemical, biotech, computers, robotics, motor vehicles, shipping, aerospace, clothing, building, machine tools.

I would also reserve to domestic production at least 25% of the market for goods that are useful but not vital to provide a base for an expanded home production in times of emergency. Trade in wholeheartedly nonessential goods – Christmas trees, pogo sticks and suchlike – could be “free”.

I am not arguing for autarky. What I am advocating are trading circumstances which allow a nation to defend its national interests, particularly in time of war or international crisis. The measures I propose would produce self-sufficiency in food where necessary, the maintenance of the ability to manufacture a complete range industrial goods and most importantly the maintenance of an arms industry which can produce a full range of weapons necessary for the defence of the country.

Such a system would provide the security the state requires and permit very substantial international trade even in essential goods.

Obviously such a regime could not be followed in its entirety by most states. However, all could exist within those parts of it suited to their circumstances, for example, Britain could manage the entire regime, many third world countries could be self-sufficient in food.

If you are not convinced consider this, Britain experienced her strongest sustained growth in the period 1945-1972. This was a period of protectionism and much state intervention in the economy. Problems arose in the 1970s, but these were largely due to the oil price spike after 1973, a consequence of globalism. However, even with the oil price spike, unemployment in Britain never went much above 1 million until Thatcher arrived and wilfully destroyed our heavy and extractive industries.

During the period 1945-1979, Britain did not suffer a serious sustained recession. From 1979 onwards, under the Thatcherite ideology we have had three serious recessions: in the early 1980s, the early 1990s and the present recession.

To our post-war experience I would add the fact that England built her commerce then the first Industrial Revolution behind very restrictive protectionist measures such as the Navigation Acts..

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35 thoughts on “Robert Henderson: A Case for Protection

  1. Saying that protectionism is a good thing does not prove that it is. I find the arguments for free trade much more persuasive.

      • Thanks Robert, for your prompt response and link. I have looked – very superficially – at your lengthy article. It needs more digestion, but the brief look did not impress due to the many strong assertions.

        • Derek – I can understand the frustration Darwin experienced after the publication of his Origin of Species when he was constantly told that hsi theory was not supported by argument. As Darwin pointed out, doubtless through gritted teeth, the entire book was one long argument.

          Your objection to my attitude towards laissez faire economics suffers from the same general mistake as the critics of Darwin made. You say I assert without giving evidence. In fact, the exact opposite is the case. I either give facts or arguments based on human nature and human sociology for everything claim I make. You may not accept the evidence and argument I supply but please do not represent as something I am not.

  2. Robert Henderson, your reply to Derek about the epistemological support that you assume you have mustered is very unrealistic and Darwin, too, failed to get any support for his thesis; as one long argument can no more support any thesis than a million short ones can, for any valid argument amounts to only an assumption, and that is so with a true observation also. As assumptions cannot support any thesis, so no thesis ever was supported.

    As evidence cannot support in any case, that is not where you get it wrong. No one can do otherwise.

    Economic history does not flout basic economics. The problem of mass immigration began in 1914, when capital was diverted from going round the world by the war, and by 1945 immigrants began to come to the capital rather than the capital investment going to the workers around the world. Had more capital continued going overseas then the wages around the world might well have been way less uneven today.

    Free trade will tend to level things out. Protection will prolong the problem, that it made after 1914.

    The liberal solution to war was exactly to use the world division of labour such that no nation state was fit to indulge in war. Robert Henderson seems to want to organise the economy as if war was the only problem that society faced and the opportunity cost of that is massive.

    That the illiberal state should organise for war is most illiberal. It crowds out liberty as well as welfare; embargoes, tariffs and quotas are all alien to liberty.

    To increase liberty we need free trade and the rolling back of states around the world.

    Why should people want to eat only from what we grow in the UK? We might well manage it but why should we want to do so? Robert Henderson seems to be obsessed with putting the nation on a permanent war footing.

    The LA is out to roll back the state, or get rid of it entirely, as it is an anti-social menace and it violates liberty.

    In 1945, the labour market was cleared but by 1970 the Labourites had messed it up and supplied a dole that maintained over a million unemployed since then. That is all owing to the state taxing the people in work to maintain the dole that was the main cause of mass unemployment in the mass urban society since 1970.

    Inflation undid the fourfold of 1973 in the UK by 1977. OPEC is not part of globalism. It is crass politics.

    The miners were on a glorified dole and needed to be ebbed out in favour of cheaper coal from places like Australia but there was no need for them to go on the official dole.

    Recessions flow from national money and the dole. We need to denationalise money and lower the dole payments or cut it out entirely.

    The Navigation Acts were a public menace that held economic progress back. It was good when they got repealed. A lot of laws need to be repealed today.

  3. David D – Let me begin by pointing out that made a short post suitable for a comment on a blog. If you want chapter and verse on my onslaught of laissez faire economics try this: https://livinginamadhouse.wordpress.com/2012/04/20/free-markets-and-free-trade-elite-propaganda/

    But short as my piece on this blog is the facts I stated in it are facts. The first industrial revolution took place in Britain (England really because all the major advances to place in England – coal smelted iron, the invention and improvement of the steam engine, the development of the factory system including the machines to fill factories, the standardisation of parts such as screws. That industrialisation took place with the Old Colonial system including the navigation acts in place. That lasted until Peel began the process of dismantling that benign protection in the 1840s. In 1850 Britain was the workshop of the world; by 1914 the USA had overtaken Britain as the first industrial nations with Germany chasing hard. Both Germany and the USA had done so through a combination of strict protectionist laws and the stupidity of the Britain being laid open by her politicians. to the nearest to true free trade that has ever happened.

    After the Wall Street crash it was adoption of protectionist laws which was the prime thing which allowed Britain to recover economically during the Great Depression more quickly than any other advanced nation.

    Post 1945 protectionism was maintained and Britain enjoyed nearly a quarter of a century of regular growth. The Oil price hike in 1972 seriously disrupted that but by 1979 when Thatcher came to power it had been largely swallowed and the British economy was returning to normal, although unemployment was still above a million. That disruption – a fourfold oil price rise – had nothing to do with the way the British economy was run it being an external jolt over which Britain had no control.

    As for the miner being on a dole, their existence meant Britain was self-sufficient in energy. Would that we still were.

  4. Thanks for your reply, Robert Henderson.

    I did produce a commentary on your link a week ago. Your main fallacy is the one of post hoc ergo proper hoc, a fallacy many historians fall for. David Hume was very ken to dodge it in his history. Did you read it?

    The opportunity cost of making all things in Britain is massive. And the UM were keen to cut off the power anyway in the 1970s. We then had the three day a week imposed us by the NUM and Heath.

    Inflation made oil cheaper in the UK in 1977 than it had been in 1973.

    • When it comes to economics the only way policy can be judged is by looking at the outcomes of various policies whether that be interventionist or not. Economics is not a science like chemistry whereby the same result occurs if the same procedure is repeated under the same conditions,. All economists can do is try this or that and see what the outcome is. However, interventionist measures such as those of Keynes are an experiment of sorts as is making a decision such as coming off the Gold Bullion Standard in 1931. It is not unreasonable to accept that if the outcome of such measures is as postulated then there is cause and effect involved. As you quote Hume you should remember that although Hume undermined the idea of cause and effect he allowed that the most rational way of proceeding is for men to believe that if X produced Y the last time the employment of X will again produce. Y.

      AS for your point about inflation, this was a factor in swallowing the 1970s oil price hike but balanced against it was the ill effects on the economy of inflation as a whole, not least the panic when it looked as though it might run completely out of control.

  5. Thanks for your latest reply, Robert.

    Did you read my commentary/criticism of your link [repeated above] of about a week or do back? I saw your on your site to the effect that it had not been backed up but all theses fail in that respect. I feel it was an adequate reply to your long stint. And your reply hinted that you has not bothered to read what I wrote [as it lacked any justification].

    I think economics could be a science, like physics and the like, but they all fall [or rather they all fail to rise up from mere assumption/hypotheses/guesswork] short of any justification also, as Karl Popper noticed. So Hume was basically right. Justification is a mere myth.

    You are an anti-liberal and a nationalist. I am a pristine liberal and whilst not an anti-nationalist completely, I am an anti-statist. I think we ought to roll back all states first and then get rid of them. They are the sole cause of mass unemployment and war. But you seem to welcome war.

    Most historians, even Gibbon and Hume, seem to write as thoughtless deadheads. They seem to have nothing to say but they still say it nevertheless and in long books. This barrenness is clearest of all in Social and Economic History, that I took an “A” level on back in the 1970s.

    Inflation was not just a factor in wiping out the fourfold oil price rise by 1977 in the UK but the whole cause of it.

    All state activity is negative sum thus wasteful. All free trade is positive sum thus economic. Thus we will all be better off under liberal anarchy.

  6. Thanks for your latest reply, Robert.

    As I cannot see e, r, t, a, s, d, f or c on my keyboard I need to try to correct my many typos.

    Did you read my commentary/criticism of your link [that you repeated above] of about a week or so back that I posted on your site? I saw your reply on your site to the effect that it had not been backed up, but all theses fail in that respect. I feel it was an adequate reply to your long stint. And your reply to it hinted that you had not yet bothered to read what I wrote [as it lacked any justification].

    I think economics could be a science, like chemistry, physics and the like, but they all fall [or rather they all fail to rise up from mere assumption/hypotheses/guesswork] short of any justification also, as Karl Popper noticed. So Hume was basically right. Justification is a mere myth.

    You are an anti-liberal and a nationalist. I am a pristine liberal and whilst not an anti-nationalist completely, I am an anti-statist. I think we ought to roll back all states first and then get rid of them. They are the sole cause of mass unemployment and war. But you seem to welcome war.

    Most historians, even Gibbon and Hume, seem to write as thoughtless deadheads. They seem to have nothing to say but they still say it nevertheless and in long books. This barrenness is clearest of all in Social and Economic History, that I took an “A” level on back in the 1970s.
    Inflation was not just a factor in wiping out the fourfold oil price rise by 1977 in the UK but the whole cause of it.

    All state activity is negative sum thus wasteful. All free trade is positive sum thus economic. Thus we will all be better off under liberal anarchy.

  7. Yes, I am repeating what I said.

    You can try to explain why the state is not wasteful, Robert, and you can also try to answer the points made in my long commentary on your long stint posted on your site.

    • Any organisation private or public can be wasteful. No private business works at maximum efficiency or anything near it most of the time. In fact, private businesses are often more profligate than public organisations both because of the profit motive – which leads to short term-ism and under-investment – and straight forward greed on the part of owners,. The trick is to minimise waste in the public sector by clearly identifying what should be public and what should be private. I have written a piece on this see

      https://livinginamadhouse.wordpress.com/2012/07/22/public-and-private-confusion-and-yes-there-is-an-alternative/

      • You seem to have misunderstood my point, Robert. It is true that firms can be wasteful but they do not need to resort to illiberal taxation. Taxation guarantees a negative sum wasteful transaction. This is part of the LA case against the state, that you do not see to know about. By contrast, trade is positive sum, as I explained in my commentary on your long stint about a week ago. I hope you read it!

        Profit is the hallmark of public service as it is a sign that the public, or the customers who patronised the firm, found what it was doing as useful. Any waste is paid for by the firm themselves from what they have earned from serving the public. The market does not need to scotch liberty, that is why pristine liberals find it useful towards the end of social liberty.

        I will look at your link: thanks.

  8. Protectionism taken to its logical conclusion would completely destroy the division of labour, leading to a subsistence economy in which most of the current population would starve to death. If the a country must be self sufficient in this or that good, then why not each county, town or family?

    It is in any case quite incompatible with a free society.

    • James – I made it clear in my initial piece on this thread that I am not arguing for autarky, although if a country is large enough and endowed with sufficient natural resources that could in principle work.

      As for it not being compatible with a free society you confuse what happens within a country with what the individual wants. It is not freedom if open borders means that the members of a society have to compete with foreigners flooding in. It is not a free society if the immigrants come in then refuse to abide by the mores of that society. It is not a free society if free trade impoverishes large numbers of your own people. As I said in a previous post, the ends of libertarians can only be achieved in a secure territory.

      • Yes, you said you rejected autarky Robert but your stint above does not fall far short of it.

        Free immigration does fit a free society. It is liberty to have open boarders. But it can ruin a nation if mass immigration is rapid and alien in values to the host nation. People hate diversity. A few like it but most people hate it. For that reason, mass immigration may be uneconomic but how can we seriously say it is not free? How can not conforming to the hosts mores scotch liberty? Do you know what liberty is, Robert?

        You seem to err badly on the worth of the anti-social state, that can never be free.

        But I do not wish to deny that liberty may have costs as well as benefits.

        • David D – You are making the common libertarian mistake, namely, imagining human beings are individual atoms which may drift anywhere. Any meaningful political understanding has to begin with Man’s evolved social nature. As you note most humans, probably all humans when shove comes to push, dislike diversity. This is only to be expected. To evolve what biologists call sociality there has to be a limit to the group. That is because sociality can only arise where trust exists. Trust can never include those from outside the group. That is why racial and ethnic strife exists and always will exist where societies are diverse.

          • I do not think much of this atom analogy, Robert, and it tends to exaggerate society, which can only ever be the mere social interaction between human beings. If you hear the bell toll then it tolls for another. It is always an exaggeration to say that we are part of society and that we have a culture. It is the phenotype or mere appearance that upsets the sense of oneness in any nation from mass immigration. That is the diversity many do not like. The basic trust to pass by in the street usually survives, though it might occassially break down.

            You seem to crass politics and the state is vital but it is a menace to society. That is the main LA idea.

            • David M – There are many rooms in the libertarian ideological house. That fact often derails rational discussion of libertarian issues, but it need not be a problem in this instance because the question being asked is most efficiently examined by testing it against the flintiest wing of libertarian thought. If that pristine, uncompromising form of libertarianism is incompatible with the maintenance of cultural roots and collective identity, then all other shades of libertarianism will be incompatible to some degree.

              Read more at https://livinginamadhouse.wordpress.com/2011/06/21/libertarianism-immigration-race-cultural-roots-and-collective-identity/

              • David M – There are many rooms in the libertarian ideological house. That fact often derails rational discussion of libertarian issues, but it need not be a problem in this instance because the question being asked is most efficiently examined by testing it against the flintiest wing of libertarian thought. If that pristine, uncompromising form of libertarianism is incompatible with the maintenance of cultural roots and collective identity, then all other shades of libertarianism will be incompatible to some degree.
                Read more at https://livinginamadhouse.wordpress.com/2011/06/21/libertarianism-immigration-race-cultural-roots-and-collective-identity/

                >
                Well, we all have our own ideas but reality is external to them, Robert.

                Collective identity is often at odds with liberty. Monopoly rarely is, but you write as if liberals worry about mere monopoly when most, like myself, feel the market tends to remove it and that the law needs to keep out of the market entirely. It is the state that is the major menace in society. The state needs to be rolled back and most laws need to be repealed. But you write as if you love the state.

                You should put your case in an LA talk.

      • It’s important to remember that free trade and free migration are two quite different things. I am not sure that it is helpful to conflate the two.

        As Hoppe reminds us, in the former there is both a willing buyer and a willing seller.

        The latter, as we understand it today, is only possible because of the existence of “public” – ie state – property.

        In a free society, by contrast, the would-be migrant would have to be invited by the owner of the land on which he intended to settle. This owner would have to bear the brunt of any costs that the migrant went on to impose on society.

        Thus free trade would likely co-exist with minimal migration.

    • Robert does not seem to know the liberal case, James. I did supply him with a long commentary on one stint he wrote a few weeks back and I am writing up another commentary for him now. Odd that he writes on an LA blog!

        • When I see you go on about irrelevant monopoly rather than liberty, I tend to doubt that, Robert, and when you over estimate backward history it seems to me that you do not understand history either. My guess is that you also over estimate the law, and that you get many other things wrong too.

          That is what your writings suggest, anyway .

          I hope to put my second reply to the link you gave above on your site in a few week’s time.

          It would be good if you put your case against free trade to the LA in a talk some time. Are you too far away from London to do that ?

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