The Epidemic of Protection
FCONOMIC exclusiveness is a disease which comes a in recurrent waves like influenza. The strangest thing. about this disease is that the healthier conditions of international life in all other respects seem unable to affect it, still less to check it. The most important conception which has established itself since the War is that international life must be co-operative, not compe- titive, if peace is to be preserved. One might fairly have supposed that reason. would not have confined itself to this one compartment of human conduct ; one might have supposed that the reduction of armaments would already have had its counterpart in the reduction of tariff, armaments.
Unfortunately nothing of the sort has happened. We sec now,in Australia the most frantic adventure in Protec- tion which any Dominion has ever undertaken. And at home . we listen rather ruefully to the speeches of Mr. Baldwin who, although he is a very sincere man of peace, habitually uses the language of war about international trade. We know that during industrial distress a male- suada fames causes men to resort to evil expedients because they are hungry, but even so we are amazed that our statesmen have been so inattentive to the collective wisdom of the Geneva Economic Conference. As for Australia, it is a strange irony that. Mr. Scullin should .have prescribed his startling Protectionist remedies shortly after the Economic Committee which was appointed by Mr. Bruce had reported that tariffs were killing the trade of the country. _ If. Sydney Smith were alive to study Mr: Scullin's list of prohibited goods and almost prohibitively taxed goods, le would feel that his famous satire on the taxation of the common, necessary articles of life required to be rewritten. It would seem too mild. It is impossible not to admire in one sense the perfectly heroic and whole- hearted determination with which Mr. Scullin is trying to restore the credit of Australia. He recognizes that she has been spending and borrowing much too freely. The cost of production has risen so disastrously that Mr. Bavin, the Premier of New South Wales, said recently that wool was the only Australian product which could be exported at a profit. Most Englishmen- are hardly aware of the devices which have been applied in Australia in order to carry , on the export trade at a Profit ; Australians have actually been compelled to pay unneces- sarily high prices for necessaries in order that exports might in effect be subsidized. All has been in vain so far. Mr. Scullin has come to the conclusion that something desperate must be done to prove that the Commonwealth is by no means a spendthrift who will gaily, or cynically, go on borrowing till she cannot meet her obligations. We can hardly, therefore, praise his spirit too highly, whatever we may think of his choice of remedies. He has told his countrymen that they must make immense sacrifices for safety and honour. His fiscal scheme for correcting the exchange by keeping out of Australia every kind of import which he possibly can keep out is the result.
As we are Free 'Traders we must expect to be told by those who are smitten with the - prevalent disease that Mr. Scullin is doing the only right thing in protecting Australia against an " adverse balance " of trade. But we prefer. to 'believe that credit comes from successful trade, and in no other way. The most unpromising of all conceivable means for convincing the world that Australia is sound is deliberately to check trade. It is consoling at least to know that Mr. Scullin regards his scheme as a hot plaster only for brief application.
Within the last few days Mr. Baldwin has reverted almost to the strength of those Protectionist- declarations which -brought the Unionist Party to disaster seven years ago. " I desire,", he says, " a free hand in Safeguarding wherever the Government may consider it necessary.".The tribunal which considered all applications for Safe- guarding disappears. The Government becomes the sole judge. This being so--or rather if this should become so— the alleged difference between Safeguarding and Protec- tion will vanish. A Government who on principle believe in Protection as evocative of prosperity will logically say that the more Protection there is the better.
And Mr. Baldwin is ready to fight for his cause. " What," he asks, " are our weapons against foreign competition ? They are Safeguarding and the economic unity of the Empire." Again, " If you agree that Europe has no intention of reducing her tariffs it is essential that we should put ourselves in a position to negotiate on equal terms with other countries and tell them We shall hit you on the head if you don't give us some advantage.' " In such language there is no glimmering of the truth that trade is not war but a process Of exchange. Mr. Baldwin has persuaded himself that he will not be held committed to full-blooded Protection,' including food taxes, until he has got the-sanction of the Referendum. We fear that he deceives himself. At the next General Election he will find that the will has already been taken for' the deed. Unionists will be voted for or against as food-taxers, whether they like it or not.
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