Category Archives: protectionism

The economic consequences of China flu

The epidemic, writes Dalrymple,

might well have effects far beyond any that its death rate could account for.

The Wuhan virus has woken the world up to

the dangers of allowing China to be the workshop of the world and of relying on it as the ultimate source for supply chains for almost everything, from cars to medicines, from computers to telephones.

No doubt, he says,

normal service will soon resume once the epidemic is over, even if at a lower level, but at the very least, supply chains should be diversified politically and perhaps geographically; dependence on a single country is to industry what dependence on monoculture is to agriculture.

And

just as the heart has its reasons that reason knows not of, so countries may have strategic reasons that economic reasons know not of.

The danger is that the Wuhan virus

will be used as a justification for beggar-thy-neighbour protectionism, and for zero-sum-game economics, to the great impoverishment of the world. Judgment, that mysterious faculty that is so difficult to define or quantify, but which undoubtedly exists, will be needed to adjudicate the claims of strategic security and economic efficiency.

Welfarism is the motor of Western Europe’s decline

The obsession with social security, writes Dalrymple,

has created rigid social and economic systems that are extremely resistant to change.

The fixation on state handouts

is in turn connected with a fear of the future: for the future has brought catastrophe and relative decline for more than a century.

A vicious circle

What is it that Western Europeans fear?

An open economy holds out more threat to them than promise: they believe that the outside world will bring them not trade and wealth, but unemployment and a loss of comfort. They are inclined to retire into their shell and succumb to protectionist temptation, internally with regard to the job market and externally with regard to other nations. The more those other nations advance, the more necessary does protection seem to them.

The French national socialists

Screen Shot 2014-05-31 at 10.42.17The dirigiste soul of the Front national

The collectivist FN, Dalrymple points out, advocates nothing other than the French way:

  • freedom from foreign interference (a fantasy)
  • freedom from foreign competition — protection of national industry (in an age when all industry is multinational)
  • state control of the national economy’s commanding heights (‘bottomless pits would be a better description’)
  • a welfare state from cradle to grave (unsustainable even in the medium term)