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Has the Black Cloud a Silver Lining?
Harry Gunnison Brown
[Reprinted from The Freeman, November, 1940]
Dorothy Thompson, in one of her recent syndicated columns, asserts
that Germany's plan, in case of victory, is to establish a single
customs union for Europe, thereby making the largest free trade area
in the world. The planners of this system, she says, contemplate
bringing the American countries into it by economic pressure. For
example, they claim that there will be no market for the raw materials
and the agricultural products of the United States other than the one
they control, since these materials and products certainly cannot be
sold in the Americas. The trade proposed to the United States will be
based on barter. The countries of the new European customs union will
want raw materials and will pay for them in manufactured goods.
Similar barter arrangements will be made with the countries of South
America.
It would be a most interesting phenomenon, surely, if the economic
pressure of a totalitarian Europe were to bring, for us and for them,
a degree of freedom of trade and of specialization, with resulting
increase of the standard of living, which democratic processes have
never been able to bring.
One of the great difficulties in the way of establishing free trade
by democratic means is the fact that men are much more conscious of
their interests as producers than as consumers. In the case of the
average consumer, buying shoes, clothing or other goods from a dealer,
the idea that he is paying a higher price because of the protective
tariff never enters his head. There is no mark on the goods to
indicate that they are raised in price by the tariff or how much and,
indeed, no one really knows just how much they are raised. The
purchaser may read in some magazine article or newspaper editorial
that the prices of various goods are enhanced by the system of
protection or he may have been taught it during his school days in
some course in economics. But certainly he isn't acutely conscious of
the fact when buying goods and it is probable that the appeals of
tariff-reduction political leaders arouse, therefore, relatively
little enthusiasm.
But in his position as producer and seller of goods his interest in
the tariff is really acute, and his eagerness to maintain the full
degree of "protection" to which his industry is accustomed
is often a frantic one. The Congressman from the local district is
urged, regardless of the party he may belong to, to use his influence
for maintaining or increasing this protection. To accomplish this
purpose the Congressman must probably vote for protection to other
industries as well, industries the products of which his constituents
will therefore have to buy at higher prices than otherwise. But since
most persons are so eagerly interested in their position as producers
and so uninterested in, even unconscious of, their position as
consumers, the Congressman finds it often politically profitable to
him and, even, necessary if he would hold his office -- at any rate,
so most of them seem to believe -- to support and vote for bills by
which the. majority of his constituents are made poorer. For in this,
as in other policies, it is too often through their own prejudices and
lack of understanding that the masses of common folk in democratic
countries are laid under tribute to those who seek to exploit them.
But what if a great foreign country -- say a Europe under German
hegemony -- on which American producers in many lines are dependent
for the sale of their goods, is in a position to say: "We shall
trade with you only by barter"! Suppose they thus say, in effect:
"You must take from us in trade certain goods you are now
shutting away by tariffs or we shall no longer purchase from you
various goods which many thousands of your producers depend on us to
buy"! This would at once make thousands of persons here,
conscious as producers and, therefore, acutely conscious, of the
importance to them of accepting these foreign goods in trade instead
of excluding them by tariffs. Thus, the sharp objection to importation
of these goods, from the home producers of goods of the same kind,
would be met by more than the feeble and scarcely conscious desire of
consumers to admit them. It would be met, also, by the clear
insistence of comprehending producers that such goods be admitted.
Thereby a totalitarian domination of Europe might, and, too, through
the instrumentality of totalitarian barter bargaining, bring about,
for democratic countries like the United States, a freedom of trade
never previously enjoyed.
These remarks are not at all intended as an encomium on dictatorial
governments of the modern totalitarian variety -- which, however, are
not altogether dictatorial since they depend on, though they
propogandize in order to get it, popular support for their major
policies. The democratic way has, many of us believe, an advantage in
the long run and on the average, in the freedom of expression for
divergent views and a consequent greater likelihood that all important
considerations bearing on choice of public policy will be taken into
account. Yet we cannot but admit that the totalitarian spirit shows
itself in our democracy as well as in the professedly totalitarian
states, that in parts of our country the expression of certain views
has at various times not been safe and has, therefore, not been free.
We must admit, too, that while totalitarian governments control mass
sentiment by propaganda, dominant economic groups in the democracies
have the financial means to control and do, to a considerable extent,
control mass sentiment by the propaganda that their less pecuniarily
prejudiced and more socially minded opponents too commonly lack the
financial means to meet.
The fact is that totalitarianism, in practice, has aspects of
democracy and that democracy has, in practice and much to the regret
of its friends, certain aspects of intolerance that we think of as
characteristic of totalitarianism.
But the point I am especially emphasizing here is that, in the
particular matter of free trade, there is at least a possibility that
totalitarian policy will operate to extend it, and even to force it
upon foolishly reluctant democracies to the very considerable economic
benefit of their people.
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