Who are the REAL protectionists?
Trade unions are under persistent attacks for ‘protectionism’ at the moment, and as we begin a recession that will be made deeper and longer if protectionism flourishes, that’s a pretty serious charge. It’s also false. Unions are indeed in favour of protecting workers. But that’s not the same as protectionism. And very often it’s the people who accuse us of protectionism who are the real protectionists. At the very least, such people are playing a very dangerous game, likely to provoke precisely the protectionism they claim to oppose.
The latest charge is in the Economist’s Charlemagne column, which says:
The single market is firmly in the left’s sights. The European Trade Union Confederation, an umbrella body, has drafted a new “social protocol” it wants to add to the next EU treaty, saying the single market “is not an end in itself”, but must be balanced by “social progress”. That would split the EU between old and new members, and play into the hands of economic nationalists. A great deal is at stake as this crisis deepens. Without a lot of vigilance, the single market could be derailed.
Such a lengthy charge list. And so, so wrong.
The column as a whole is an attack on union attempts to prevent undercutting by migrant labour – especially those posted temporarily to the UK who are covered by the Posting of Workers Directive. The Economist argues that insisting on the rate for the job is protectionism, designed to keep foreign workers our. But there is no recognition in the column that, in fact, it has been the British trade union movement which has, not the so-called anti-protectionists, who have argued for the full freedom of movement of Bulgarian and Romanian workers (one other exception: I think Business for a New Europe are the only consistent capitalists, and credit to them for supporting free movement not just for capital and goods, but for working people too).
Charlemagne repeats the canard that the Lindsey Oil Refinery strike was against foreign labour, when it certainly was not. Apart from the frequent statements of the GMB and Unite throughout the dispute that they were opposed only to the perceived discrimination against British workers, and the concerns about undercutting of local terms and conditions, the resolution to the dispute will see future jobs opened up to the competition that the Economist would surely support?
The column also argues that the ETUC is arguing for a social progress protocol to torpedo the single market. The single market was developed in the 1980s and implemented in the 1990s to produce free movement, but it was balanced then by Jacques Delors’ social model. Since then, neoliberals and deregulators have been trying to push ahead with further marketisation shorn of the social measures that made the single market palatable to Europe’s citizens. That drive isn’t working (it frequently runs into sandbanks such as the European Parliament’s amendment of the Services Directive), and if it did, it would only provoke a backlash of protectionist sentiment that would see the single market thrown into reverse.
The ETUC call for a social progress protocol is in fact the single market’s best hope of survival, ensuring that competition is on the basis of fairness, equity and rising standards not the race to the bottom. The social progress protocol would help the EU repeat the trick with Eastern Europe that it previously managed with countries like Ireland and Spain (although less successfully for Greece and Portugal). That trick was to increase wealth by levelling up, ensuring that Irish and Spanish workers who travelled earned higher wages than at home, and ensuring that capital flooded into Ireland and Spain to foster swift growth and higher wages at home too.
But the neoliberals and the deregulators seem to have learnt nothing from these experiences. Instead, they offer Eastern Europeans a free movement which results in exploitation and undercutting, while using investment in and relocation to Eastern Europe as a way of simply cutting costs further. Except in the shortest of terms, this is the race to the bottom, and as we enter a European recession, it is the height of deflationary folly.
And by promoting exploitation and undercutting, exposing workers to the coldest winds of the free market, such measures will lead to racism, xenophobia and the rise of support for protectionism. The single market – indeed the whole European project – must learn to protect to survive.