Transcript of Stefano Fugazzi’s speech (“Progressive Protectionism. The alternative to TTIP”) at the London School of Economics, 22 November 2014.
Good afternoon to all.
We are all aware of the dangers posed to the European “Small and Medium Enterprises” (SMEs) by the “Transatlantic Trade and Investment Partnership” (TTIP), a proposed free trade agreement between the European Union (EU) and the United States of America (USA).
It is my intention here, today, to present a counter-proposal put forward by Colin Hines, a British member of the UK Green Party and author of a paper published in 2012 called “Progressive Protectionism” where the author suggests the need for a new economic paradigm alternative to neoliberalism. The alternative to the likes of TTIP and free trade agreements is called Progressive Protectionism.
Let us begin by saying that the author is not advocating the oxymoronic protectionism of the 1930s, where the goal was often for each protected industry or country to increase its economic strength by limiting imports and then hoping to compete globally at the expense of others.
The goal of Progressive Protectionism is instead that of encouraging countries to rebuild and diversify their economies by limiting what products import and what financial activities they choose to enter or leave a country.
Of course such a radical change in economic direction could not be introduced in one country alone, since the money markets would ferociously destabilise such a challenge to their present dominance of the world economy. Europe, under huge threat from the forces of international finance as it is, could however be a powerful enough bloc to implement such a programme, particularly if the politically active started to campaign for it.
In a few words, progressive protectionism will require the introduction by nation states of a set of interrelated and self-reinforcing policy priorities to:
- Reject evermore open markets and international competitiveness and replace them by the reintroduction of protective safeguards such as tariffs and quotas for domestic economies; this is the necessary precursor to being able to carry out the rest of the policies;
- Introduce a site-here-to-sell-here policy for manufacturing and services domestically or regionally;
- Localise finance such that the majority stays within its place of origin;
- Implement a local competition policy to eliminate monopolies from the more protected economies;
- Introduce fairer and socially positive taxes, resource taxes and tackle tax dodging to fund social and environmental improvements and help pay for the transition to localisation;
- Increase democratic involvement both politically and economically to ensure the effectiveness and equity of the movement to more diverse local economies; and finally
- Re-orientate the end goals of aid and trade rules such that they contribute to the rebuilding of local economies.
You will find more details about the work of Colin Hines on my website abceconomics.com.
Lastly, I would like to dispel a couple of reoccurring false myths about neo-protectionism.
Let us look at the first one.
Under progressive protectionism how will I get my new iPad? Won’t we return to the grey aspic of the closed, communist societies?
Progressive protectionism is not about restricting the flow of information, technology, management and legal structures that allow good ideas to be turned into goods and services worldwide, but it is about putting local production first.
Of course the articles will be more expensive if they employ UK or EU workers but this will be more than compensated for by the increased domestic control over economies globally that is inherent in progressive protectionism and indeed is the only route to it. This alternative will make possible the potential for fairer taxes to reduce inequalities, the provision of better social conditions, employment security and environmental infrastructure.
And now let us look at another false myth.
Protectionism hurts developing countries that need exports to tackle poverty.
Progressive protectionism is, in reality, a truly internationalist programme in that it offers the potential for improved living conditions for the majority worldwide. It also challenges the idea that more open markets improve the lot of the majority in poor countries, through the income earned from exports.
This approach is also advantageous to the local elites as it enables them to formulate tailored economic policies capable of dealing with the consequences of asymmetric shocks for relative regional incomes, employment and growth.
As I have already mentioned to you, you may wish to visit ABC Economics to read more on the work of Colin Hines on Progressive Protectionism.
I would like to take this opportunity to thank you all for your time and attention.
Stefano Fugazzi *
Follow the link to download “Progressive Protectionism” by Colin Hines – Progressive-Protectionism-Thinkpiece-72
* STEFANO FUGAZZI – Works in the City of London. Editor of ABC Economics and author of “Idee per l’Italia” (2013) and “A.B.C. Italia” (2014)