Carlos Hudson Archive | Trotskyist Writers Index | ETOL Main Page
From Labor Action, Vol. 11 No. 9, 3 March 1947, p. 2.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
Some weeks ago this column called attention to the historic reversal of tariff policy upon the part of southern agricultural interests, who petitioned the federal government to place a high tariff on all major agricultural products – cotton, wheat and others. For generations, previous to this petition, the Cotton South had been a free-trade advocate. The cotton interests suddenly awakened to the fact that the recent war has destroyed industry in Europe, that other nations who want dollar credits will have to obtain them by sending us what they have, agricultural products. In addition, U.S. cotton interests know that their product, now selling at a terrifically inflated price, could not compete on a free market with foreign cotton. Hence the reversal of policy.
Now U.S. Big Business has taken a keen gander at what remains of the world after the blessings of capitalism’s Second World War. The war removed the chief imperialist rivals to American industry, German and Japanese capitalism, and weakened British and French capitalism to the point where they are no serious threat to Wall Street, Chicago and Detroit. Why then do WE need a tariff protecting the American market from foreign rivals, America’s 60 Families asked themselves? Almost on the same day a representative of the House of Morgan; the Republican presidential aspirant, Stassen; the head of the National Foreign Trade Council; Secretary of Commerce Harriman; and an assortment of business executives came out for the lowering or abolition of American tariffs. This action marks another historic reversal of American policy. What lies behind it?
Capitalism in the United States, even before the revolution which freed the country from the British, has pursued a protectionist policy. It insisted that its government protect it by placing a tariff or tax on products of rival capitalist countries so that the rival products could not compete for the U.S. market. Though U.S. capitalism had, by the First World War, become the mightiest nation on earth. Big Business here has continued to insist on the preservation of high tariffs – supported by the phoniest excuses, of course, and accompanied by fine talk about “protecting the jobs of our workers,” and so on, the way the wealthy always talk.
Just prior to the outbreak of the Second World War, Roosevelt and Hull were making desperate efforts to try to lift capitalism out of its crisis, and some slight reductions in U.S. tariffs were made through Hull’s reciprocal trade program. Then came the war, and the tariff problem became unimportant. Wall Street achieved its major war aims. Its imperialist rivals were smashed. Now it wants to have business as usual with what remains of the world.
But I am going to let the speakers at the World Trade Conference, held February 17 in the Stevens Hotel, Chicago, tell you the rest of the story.
The past few months have seen a revival of U.S. world commerce on a heartening scale, said John Abbink, chairman of the National Foreign Trade Council, and president of Business Publishers International Corporation. While the government in this country has abandoned many business controls, continued Abbink, overseas the trend generally has been the other way. “Wartime controls over foreign trade in these countries have persisted and in some areas have been multiplied. Bilateral trade arrangements, import and exchange quotas and a variety of other devices continue to spread their debilitating poisons through the bloodstream of international trade. To the seasoned observer,” said Abbink, “these measures have every appearance of a world pattern that is being drawn by others in self-defense to confront our private enterprise system with a dilemma which it must face sooner or later – whether to forego our traditional, politically-rigged tariff policy, or bow to statism in foreign trade.
“The fundamental issue confronting us in world trade today is not whether present tariff structures are to be adjusted by relatively narrow margins upward or downward; it is whether tariffs are to play any part at all in regulating the flow and volume of exports and imports in the future. We have the extreme example of what I mean in the case of Russia. Russia’s foreign trade is a complete state monopoly. Our own trade with Russia is through that monopoly, and tariff considerations are without effect. How much we sell to Russia, or buy from her, depends entirely upon Moscow’s decisions. There is little freedom or scope for private trade in such arrangements. The import quota system now so widely prevalent abroad is only a little less vicious and restrictive. It is an iron curtain equally difficult for trade to penetrate.”
Now Abbink gets down to business, and talks as cynically and bluntly as ever I have heard a Big Business spokesman talk. Listen:
“It is mortifying to observe,” he said, “that (Republican) political leaders ... repeat the aphorisms their prototypes used in 1912, and are applauded for their ignorance by some sections of American business. Republican wheelhorses in and out of Washington can make no greater mistake than to delude themselves or their supporters into believing that it is possible to resume tariff thimblerigging where they left off, so disastrously, in 1932. The world has gone a long, weary way since then, on a down-hill path toward economic self-destruction.”
Now for the facts:
“Excepting for a comparatively few commodities and manufactured items – so few they could almost be counted on the fingers of two hands – there are nowhere in the world any productive facilities which could possibly threaten industry or agriculture in the U.S. during the next few years.”
Abbink urged that now, if ever, is the opportunity “to change our approach to the question of protectionism, to repudiate the hypocrisies we have parroted in the past.”
Thousands of responsible business and political leaders, he said, “are ashamed of the devious tariff structure with which we have been saddled through generations of chicanery.” During the next five years, he continued, while “our economy is in little or no danger from imports, enlightened political guidance should evolve a new tariff system.”
Even more biting in his criticism of those old-fashioned businessmen who have yet to realize the realities of the post-war world was A.B. Sparboe, head of the overseas division of Pillsbury Mills, Inc., giant Minneapolis wheat concern. Space is lacking to repeat Sparboe’s cynical description of the history of U.S. tariff’s. He said: “When it comes to business – the very life blood of our civilization – Uncle Sam suddenly feigns anemia and wants more than an even break, or he won’t play. If the most powerful nation in the world seems afraid to engage in international trade without exacting special advantages for itself (in the form of high tariffs), can we blame many weaker nations for courting Russia or adopting various forms of so-called state trading ... Unless we set out immediately to demonstrate both by precept and example that our vaunted private enterprise system succeeds from real enterprise instead of protection and special privilege, it is doomed,” etc.
A dozen other big industrialists and representatives of the State Department talked in the same vein.
Readers should not gather from this that there is no ‘opposition to the foreign trade policy’ as expounded above by the most able spokesmen of America’s 60-Families in the field of foreign trade. There are still many businessmen who, largely from force of habit and “cultural lag,” want to hang on to the supposed advantage of a protective tariff. Perhaps in a later column I’ll analyze this opposition.
Incidentally, readers who are interested in a Marxist analysis of the U.S. tariff, and an explanation of how and why monopoly capitalism and high tariffs normally go hand in hand, are advised to read Trotsky’s brilliant essay, Marxism in the United States, just published by the Workers Party.
Carlos Hudson Archive | Trotskyist Writers’ Index | ETOL Main Page
Last updated: 5 January 2022