How Marx opposed both free traders
and protectionists

A look back on Marx's speech
'On the question of free trade'

by Mark, Detroit
(from Communist Voice #23, February 4, 2000)

.

, The fiery anti-WTO protests in Seattle targeted a number of the outrages that have been carried out by the capitalists in their neo-liberal onslaught against the working masses and the environment. Marx's 1848 speech "On the question of free trade" is a reply to the neo-liberals of his day. At that time, the industrial capitalists of England, then the most powerful capitalists in the world, were demanding an end to protective tariffs that hindered the importation of cheaper foreign grain into England, the so-called Corn Laws. The English landlords wanted to keep the Corn Laws since they derived income from renting out land for agricultural production.

. Marx did not support the Corn Laws or the English landlords. But neither did he kowtow to the capitalist "free-traders. Rather he put forward a stinging exposure of what their "free-trade" credo really meant for the workers at home and abroad. Though this speech is over 150 years old, the theories of the bourgeois apologists Marx demolishes are basically the same lies we are fed by the exploiters and the neo-liberal economists today.

. The value of examining Marx's speech is not merely that it points out the atrocities carried out by the capitalists. What is most important is that it shows how these horrors are an inevitable by-product of capitalist production itself. Marx shows this by revealing the inner-workings of the laws governing the capitalist economy. And he notes that free trade policy merely means allowing the fullest flowering of these laws. This Marxist approach not only exposes the real nature of capitalism, but reveals the fallacy behind a number of trends in the anti-WTO movement who preach that the capitalism can be reformed.

. Along the same lines, these excerpts from Marx's speech provide valuable arguments against the idea that protectionism will save the workers. This is another issue of controversy in the present movement against neo-liberalism. Protectionism is pushed heavily by the AFL-CIO labor traitors as a means to save jobs. And imperialist "isolationists" like Hitler apologist Pat Buchanan have latched on to protectionism, too.

. Finally, a bit more needs to be said about Marx's stand against the Corn Laws. Marx wanted the Corn Laws abolished and was well aware this is what the English capitalists wanted and that this would mean further development of capitalism. Marxism stands for the abolition of capitalism, but it also recognizes that efforts to prevent capitalism from taking hold can only result in prolonging the life of previous systems of exploitation and was also generally hopeless. Marx said he voted for free trade as opposed to protectionism because in most cases this would be the quickest path to capitalist development and thereby the revolutionary class struggle to overthrow capitalism. But Marx also pointed to examples of where the bourgeoisie cleared away barriers to its development by utilizing protectionism. So Marxism hardly obligates one to declare for any free trade measure nor any protectionist measure. In fact, the whole issue of whether capitalist development would go faster under this or that policy is always a big issue for the bourgeoisie, but not the proletariat. What the proletariat must always do is maintain its independence from both the free-trade and protectionist wings of capitalism.

. Below we carry some quotes from Marx's free-trade speech preceded by a subheads indicating the issue at hand and our own brief comments on the ensuing quote.

Capitalists promote 'free trade' as a boon to workers
while squeezing the workers at every turn

. Today, the neo-liberal orthodoxy of the world bourgeoisie holds that "free trade" is the key to universal prosperity. Sure, the business tycoons admit, we may fatten our profits if we can do away with any limitations on what we are allowed to do. But, they assure the workers, such a policy is the surest path to raising their own living standards. (Never mind that actually the gap between rich and poor classes within each country continues to grow as does the gap between rich and poor countries.) Yet, isn't it odd that as the capitalists promise to improve the conditions of the masses through neo-liberalism, they are seeking every means possible to squeeze the workers through productivity drives, wage and job-cutting, repression of strikes, etc. In Marx's time, similar high motives were proclaimed by the English bourgeoisie during the push for free-trade policies. Marx ridiculed this hypocrisy, exposing that while the employers proclaimed their free-trade measures would help the workers, they were fighting against limiting the work day to 10 hours and trying to bleed the workers dry.

. Marx:

. "Besides, how could the workingman understand the sudden philanthropy of the manufacturers, the very men still busy fighting against the Ten Hour's Bill, which was to reduce the working day of the mill hands from twelve hours to ten?
. "To give you an idea of the philanthropy of these manufacturers I would remind you, gentlemen, of the factory regulations in force in all the mills.
. "Every manufacturer has for his own private use a regular penal code in which fines are laid down for every voluntary or involuntary offense. For instance, the worker pays so much if he has the misfortune to sit down on a chair; if he whispers, or speaks, or laughs; if he arrives a few moments too late; if any part of the machine breaks, or he does not turn out work of the quality desired, etc., etc. The fines are always greater than the damage really done by the worker. And to give the worker every opportunity for incurring fines, the factory clock is set forward, and he is given bad raw material to make into good pieces of stuff. An overseer not sufficiently skillful in multiplying cases of infraction of rules is discharged.
. "You see, gentlemen, this private legislation is enacted for the especial purpose of creating such infractions, and infractions are manufactured for the purpose of making money. Thus the manufacturer uses every means of reducing the nominal wage, and of profiting even by accidents over which the worker has no control.
. "These manufacturers are the same philanthropists who have tried to make the workers believe that they were capable of going to immense expense for the sole purpose of ameliorating their lot. Thus, on the one hand, they nibble at the wages of the worker in the pettiest way, by means of factory regulations, and, on the other, they are undertaking the greatest sacrifices to raise those wages again by means of the Anti-Corn Law League.
. "They build great palaces at immense expense, in which the League takes up, in some respects, its official residence; they send an army of missionaries to all corners of England to preach the gospel of free trade; they have printed and distributed gratis thousands of pamphlets to enlighten the worker upon his own interests, they spend enormous sums to make the press favorable to their cause; they organize a vast administrative system for the conduct of the free trade movement, and they display all their wealth of eloquence at public meetings. It was at one of these meetings that a worker cried out:
. "If the landlords were to sell our bones, you manufacturers would be the first to buy them in order to put them through a steam-mill and make flour of them.'"

If commodities are cheaper, so will be the commodity "labor -power"

. One of the standard arguments of the capitalists and many bourgeois economists "proving" that free-trade will bring great benefits for the workers is that it will allow for the importation of certain goods at a cheaper price. Here Marx shows the English capitalists of his time wanted to import cheaper grain so as to drive down the wages of the English workers. He exposes the fallacy of the "common sense" notion that if goods are cheaper, workers can purchase more. He notes that under capitalism, the worker's labor-power is also a commodity, and that if the commodities that go to maintain the worker become cheaper, this tends to keep down the value of labor-power. This, he notes, was pointed out even by the bourgeois economic theorist, David Ricardo.

. Marx:

. "The English workers have very well understood the significance of the struggle between the landlords and the industrial capitalists. They know very well that the price of bread was to be reduced in order to reduce wages, and that industrial profit would rise by as much as rent fell.
. "Ricardo, the apostle of the English free-traders, the most eminent economist of our century, entirely agrees with the workers upon this point. In his celebrated work on political economy, he says:
. 'If instead of growing our own corn . . . we discover a new market from which we can supply ourselves . . . at a cheaper price, wages will fall and profits rise. The fall in the price of agricultural produce reduces the wages, not only of the laborer employed in cultivating the soil, but also of all those employed in commerce or manufacture.'
. "And do not believe, gentlemen, that it is a matter of indifference to the worker whether he receives only four francs on account of corn being cheaper, when he had been receiving five francs before.
. "Have not his wages always fallen in comparison with profit, and is it not clear that his social position has grown worse as compared with that of the capitalist? Besides which he loses more as a matter of fact.
. "So long as the price of corn was higher and wages were also higher, a small saving in the consumption of bread sufficed to procure him other enjoyments. But as soon as bread is very cheap, and wages are therefore very cheap, he can save almost nothing on bread for the purchase of other articles.
. "The English workers have made the English free-traders realize that they are not the dupes of their illusions or of their lies; and if, in spite of this, the workers made common cause with them against the landlords, it was for the purpose of destroying the last remnants of feudalism and in order to have only one enemy left to deal with. The workers have not miscalculated, for the landlords, in order to revenge themselves upon the manufacturers, made common cause with the workers to carry the Ten Hours' Bill, which the latter had been vainly demanding for thirty years, and which was passed immediately after the repeal of the Corn Laws.
. "Doubtless, if the price of all commodities falls--and this is the necessary consequence of free trade--I can buy far more for a franc than before. And the worker's franc is as good as any other man's. Therefore, free trade will be very advantageous to the worker. There is only one little difficulty in this, namely, that the worker, before he exchanges his franc for other commodities, has first exchanged his labor with the capitalist. If in this exchange he always received the said franc for the same labor and the price of all other commodities fell, he would always be the gainer by such a bargain. The difficult point does not lie in proving that, if the price of all commodities falls, I will get more commodities for the same money.
. "Economists always take the price of labor at the moment of its exchange with other commodities. But they altogether ignore the moment at which labor accomplishes its own exchange with capital.
. "When less expense is required to set in motion the machine which produces commodities, the things necessary for the maintenance of this machine, called a worker, will also cost less. If all commodities are cheaper, labor, which is a commodity too, will also fall in price, and, as we shall see later, this commodity, labor, will fall far lower in proportion than the other commodities. If the worker still pins his faith to the arguments of the economists, he will find that the franc has melted away in his pocket, and that he has only five sous left."

The capitalist "boom" won't save the workers

. Continuing his exposure of the capitalist propaganda, Marx deals with the "free-traders" claim that if the price of commodities decreases, this will lead to higher consumption and therefore a demand for more workers which will drive wages up. Marx here explains why even in a period of increased production, eventually the workers "will go to the wall just the same." The undermining of the workers position even during "booms" is confirmed today in industry after industry where high profits are accompanied by downsizing, longer and harder work for the employed, and a fall in real wages.

. Marx:

. "Thereupon the economists will tell you: 'Well, we admit that competition among the workers, which will certainly not have diminished under free trade, will very soon bring wages into harmony with the low price of commodities. But, on the other hand, the low price of commodities will increase consumption, the larger consumption will require increased production, which will be followed by a larger demand for hands, and this larger demand for hands will be followed by a rise in wages.'
. "The whole line of argument amounts to this: Free trade increases productive forces. If industry keeps growing, if wealth, if the productive power, if, in a word, productive capital increases, the demand for labor, the price of labor, and consequently the rate of wages, rise also.
. "The most favorable condition for the worker is the growth of capital. This must be admitted. If capital remains stationary, industry will not merely remain stationary but will decline, and in this case the worker will be the first victim. He goes to the wall before the capitalist. And in the case where capital keeps growing, in the circumstances which we have said are the best for the worker, what will be his lot? He will go to the wall just the same. The growth of productive capital implies the accumulation and the concentration of capital. The centralization of capital involves a greater division of labor and a greater use of machinery. The greater division of labor destroys the especial skill of the laborer; and by putting in the place of this skilled work labor which any one can perform, it increases competition among the workers.
. "This competition becomes fiercer as the division of labor enables a single worker to do the work of three. Machinery accomplishes the same result on a much larger scale. The growth of productive capital, which forces the industrial capitalists to work with constantly increasing means, ruins the small industrialists and throws them into the proletariat. Then, the rate of interest falling in proportion as capital accumulates, the small rentiers, who can no longer live on their dividends, are forced to go into industry and thus swell the number of proletarians.
. "Finally, the more productive capital increases, the more it is compelled to produce for a market whose requirements it does not know, the more production precedes consumption, the more supply tries to force demand, and consequently crises increase in frequency and in intensity. But every crisis in turn hastens the centralization of capital and adds to the proletariat.
. "Thus, as productive capital grows, competition among the workers grows in a far greater proportion. The reward of labor diminishes for all, and the burden of labor increases for some.
. "In 1829, there were in Manchester 1,088 cotton spinners employed in 36 factories. In 1841, there were no more than 448, and they tended 53,353 more spindles than the 1,088 spinners did in 1829. If manual labor had increased in the same proportion as the productive power, the number of spinners ought to have reached the figure of 1,848;improved machinery had, therefore, deprived 1,100 workers of employment."

Capitalists prettify chronic unemployment as "temporary suffering"

. In Marx's time as now, the apologists of capitalism could not deny the devastation of whole sections of workers displaced because of the higher productive powers due to technological advances. But allegedly the creation of mass unemployment was simply a temporary phenomenon, merely a matter of the displaced workers finding another job. Here Marx ridicules the callous attitude of the capitalists toward the unemployed and shows that the displacement of workers is not confined to this or that sector, but is inherent in capitalist production in all fields.As evidence, Marx cites the testimony of the pro-free-trade ideologues themselves who describe the ruin of the weavers not only in London, but in the British colony of India.

. Marx:

. "We know beforehand the reply of the economists. The men thus deprived of work, they say, will find other kinds of employment. Dr. Bowring did not fail to reproduce this argument at the Congress of Economists, but neither did he fail to supply his own refutation.
. "In 1835, Dr. Bowring made a speech in the House of Commons upon the 50,000 hand-loom weavers of London who for a very long time had been starving without being able to find that new kind of employment which the free-traders hold out to them in the distance.
. "We will give the most striking passages of this speech of Dr. Bowring:
. 'This distress of the weavers . . . is an inevitable condition of a species of labor easily learned--and constantly intruded on and superseded by cheaper means of production. A very short cessation of demand, where the competition for work is so great . . . produces a crisis. The hand-loom weavers are on the verge of that state beyond which human existence can hardly be sustained, and a very trifling check hurls them into the regions of starvation. . . . The improvements of machinery, . . . by superseding manual labor more and more, infallibly bring with them in the transition much of temporary suffering. . . . The national good cannot be purchased but at the expense of some individual evil. No advance was ever made in manufactures but at some cost to those who are in the rear; and of all discoveries, the power-loom is that which most directly bears on the condition of the hand-loom weaver. He is already beaten out of the field in many articles; he will infallibly be compelled to surrender many more.'
. "Further on he says:
. 'I hold in my hand the correspondence which has taken place between the Governor-General of India and the East India Company, on the subject of the Dacca hand-loom weavers. . . . Some years ago the East-India Company annually received of the produce of the looms of India to the amount of from 6,000,000 to 8,000,000 of pieces of cotton goods. The demand gradually fell to somewhat more than 1,000,000, and has now nearly ceased altogether. In 1800, the United States took from India nearly 800.000 pieces of cottons; in 1830, not 4,000. In 1800, 1,000,000 pieces were shipped to Portugal; in 1830, only 20,000. Terrible are the accounts of the wretchedness of the poor Indian weavers, reduced to absolute starvation. And what was the sole cause? The presence of the cheaper English manufacture. . . . Numbers of them died of hunger, the remainder were, for the most part, transferred to other occupations, principally agricultural. Not to have changed their trade was inevitable starvation. And at this moment that Dacca district is supplied with yarn and cotton cloth from the power-looms of England.... The Dacca muslins, celebrated over the whole world for their beauty and fineness, are also annihilated from the same cause. And the present suffering, to numerous classes in India, is scarcely to be paralleled in the history of commerce.'
. "Dr. Bowring's speech is the more remarkable because the facts quoted by him are exact, and the phrases with which he seeks to palliate them are wholly characterized by the hypocrisy common to all free trade sermons. He represents the workers as means of production which must be superseded by less expensive means of production. He pretends to see in the labor of which he speaks a wholly exceptional kind of labor, and in the machine which has crushed out the weavers an equally exceptional machine. He forgets that there is no kind of manual labor which may not any day be subjected to the fate of the hand-loom weavers.
. 'It is, in fact, the constant aim and tendency of every improvement in machinery to supersede human labor altogether, or to diminish its cost by substituting the industry of women and children for that of men; or that of ordinary laborers for trained artisans. In most of the water-twist, or throstle cotton-mills, the spinning is entirely managed by females of sixteen years and upwards. The effect of substituting the self-acting mule for the common mule, is to discharge the greater part of the men spinners, and to retain adolescents and children.'
. "These words of the most enthusiastic free-trader, Dr. Ure, serve to complement the confessions of Dr. Bowring.
. "Dr. Bowring speaks of certain individual evils, and, at the same time, says that these individual evils destroy whole classes; he speaks of the temporary sufferings during the transition period, and at the very time of speaking of them, he does not deny that these temporary evils have implied for the majority the transition from life to death, and for the rest a transition from a better to a worse condition. If he asserts, farther on, that the sufferings of these workers are inseparable from the progress of industry, and are necessary to the prosperity of the nation, he simply says that the prosperity of the bourgeois class presupposes as necessary the suffering of the laboring class.
"All the consolation which Dr. Bowring offers the workers who perish, and, indeed, the whole doctrine of compensation which the free-traders propound, amounts to this:
. "You thousands of workers who are perishing, do not despair! You can die with an easy conscience. Your class will not perish. It will always be numerous enough for the capitalist class to decimate it without fear of annihilating it. Besides, how could capital be usefully applied if it did not take care always to keep up its exploitable material, i.e., the workers, to exploit them over and over again?"

Capitalist competition does not lead to international harmony

. The proponents of modern neo-liberalism portray the ending of trade barriers as the key to harmonious relations between countries. In exposing this, Marx shows the fallacy of the bourgeois theory today often called "comparative advantage" whereby capitalism allegedly assigns to each nation the fields of economic enterprise of nations in line with its natural destiny.

. Marx:

. "We have shown what sort of brotherhood free trade begets between the different classes of one and the same nation. The brotherhood which free trade would establish between the nations of the earth would hardly be more fraternal. To call cosmopolitan exploitation universal brotherhood is an idea that could only be engendered in the brain of the bourgeoisie. All the destructive phenomena which unlimited competition gives rise to within one country are reproduced in more gigantic proportions on the world market. We need not dwell any longer upon free trade sophisms on this subject, which are worth just as much as the arguments of our prize-winners Messrs. Hope, Morse and Greg.
. "For instance, we are told that free trade would create an international division of labor, and thereby give to each country the production which is most in harmony with its natural advantages.
. "You believe perhaps, gentlemen, that the production of coffee and sugar is the natural destiny of the West Indies.
. "Two centuries ago, nature, which does not trouble herself about commerce, had planted neither sugar-cane nor coffee trees there.
. "And it may be that in less than half a century you will find there neither coffee nor sugar, for the East Indies, by means of cheaper production, have already successfully combated this alleged natural destiny of the West Indies. And the West Indies, with their natural wealth, are already as heavy a burden for England as the weavers of Dacca, who also were destined from the beginning of time to weave by hand.
. "One other thing must never be forgotten, namely, that, just as everything has become a monopoly, there are also nowadays some branches of industry which dominate all the others, and secure to the nations which most largely cultivate them the command of the world market. Thus in international commerce cotton alone has much greater commercial importance than all the other raw materials used in the manufacture of clothing put together. It is truly ridiculous to see the free-traders stress the few specialities in each branch of industry, throwing them into the balance against the products used in everyday consumption and produced most cheaply in those countries in which manufacture is most highly developed.
. "If the free-traders cannot understand how one nation can grow rich at the expense of another, we need not wonder, since these same gentlemen also refuse to understand how within one country one class can enrich itself at the expense of another."





Protectionism also fosters capitalist exploitation

. Protectionism is often said to be the antidote to free trade. For instance, such views are long the stock-in-trade of the sellout AFL-CIO officials. But it is not just among forces that are supposed to be on the workers side that protectionism is being touted. Even in the U.S., the world capital of free-market ideology, certain capitalist sectors continue to enjoy protectionist measures while others, like the steel industry, clamor for more protection. Meanwhile, demagogues like Pat Buchanan have in recent years been clamoring for protectionism, attempting to put a "pro-worker" cover on their ultra-right wing crusade to revive American capitalism. The fact that the class collaborationist AFL-CIO leaders, various capitalist businesses, and right-wing politicians like Buchanan all back protectionism is strong evidence that protectionism, like free-trade, is not going to relieve the workers and poor from the onslaught of the capitalists.

. In the passage below, Marx shows that in fact free-trade and protectionist policies are both aimed at furthering capitalist development, not combating exploitation. But it is just for this reason, that if protectionist policies are successful, they wind up furthering the destruction of barriers to capital within the country and on a world scale. In other words, protectionism winds up furthering free-trade.

. Marx ends his speech by saying that given the choice between free-trade and protectionism, he chooses free-trade. This may sound odd given that his whole speech is an exposure of free trade. What Marx is driving at though is that capitalism cannot be overcome by trying to prevent it from destroying the restrictions on it left over from pre-capitalist forms of exploitation. Rather, liberation of the workers can only take place through the modern class struggle engendered by capitalism itself. Marx educated the workers as to the real meaning of free trade so as to develop their class independence from the bourgeoisie while recognizing that the protectionist policy that at that time the English landlords benefitted from, also hindered the development of the workers' consciousness and struggle. Marx was not giving a call for the workers to sit on their hands while capitalism developed, but was for sharpening the class struggle. Nor should Marx be interpreted as saying that in every instance, protectionist measures were of no use to capitalist development.As we will see, he notes how the developing bourgeoisie in certain countries used protectionism to build itself up.

. Marx:

. "Do not imagine, gentlemen, that in criticizing freedom of trade we have the least intention of defending the system of protection.
. "One may declare oneself an enemy of the constitutional regime without declaring oneself a friend of the ancient regime.
. "Moreover, the protectionist system is nothing but a means of establishing large-scale industry in any given country, that is to say, of making it dependent upon the world market, and from the moment that dependence upon the world market is established, there is already more or less dependence upon free trade. Besides this, the protective system helps to develop free competition within a country. Hence we see that in countries where the bourgeoisie is beginning to make itself felt as a class, in Germany for example, it makes great efforts to obtain protective duties. They serve the bourgeoisie as weapons against feudalism and absolute government, as a means for the concentration of its own powers and for the realization of free trade within the same country.
. "But, in general, the protective system of our day is conservative, while the free trade system is destructive. It breaks up old nationalities and pushes the antagonism of the proletariat and the bourgeoisie to the extreme point. In a word, the free trade system hastens the social revolution. It is in this revolutionary sense alone, gentlemen, that I vote in favor of free trade."


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