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Churchill and the Working-Class Case for Free Trade

Protectionism seems to have become the dominant economic ideology of Washington, DC. Although politicians may squabble about particular tariffs, the leading figures of both parties have rejected free trade for neo-mercantilist policies aimed at, they claim, reigniting American industry. But as countless economists have shown, the utopian vision of autarky that most strident protectionists advocate has no basis in reality. In fact, the latest round of tariffs threatens to throw the entire American economy into a recession—or worse.

If protectionism causes such disaster, why does it remain so popular? In a recent piece for National Review, Joseph Palange insightfully argues that it is because protectionists appeal directly to the working class. The transition from an industrial to a digital economy has devastated working-class places like Detroit or West Virginia, and falling back on sound economic theory will not answer the protectionists’ emotional appeals. Palange concludes that “free traders need to frame their arguments differently” and openly address the valid concerns of people who feel like they have lost something due to globalization.

One model for making this different kind of case is Winston Churchill. Not only was he the West’s savior from totalitarianism, he was also an ardent proponent of free trade. But unlike many of the bloodless economists who command the debate over tariffs today, Churchill was more likely to frame his opposition to protectionism in the romantic terms of “Tory Democracy.” He understood that, more than promoting mere economic efficiency, trade was a way to preserve and even advance a traditional way of life. That position, along with his commonsensical approach to oratory, made Churchill a hero to working-class people—and helped him win them over to the cause of free enterprise.

As Churchill understood perhaps better than any other statesman, free traders must appeal to both voters’ heads and hearts.

Churchill’s defense of free trade is inseparable from his broader “Tory Democrat” politics. The term was first coined by his father, Lord Randolph Churchill, to define a movement inspired by Benjamin Disraeli’s popular conservatism in the Victorian era. Rather than seeing the social classes as entities locked in an irrepressible conflict, the Tory Democrat believes that they can achieve a certain harmony within the context of a free society. As Churchill put it in an essay published in his 1932 collection Thoughts and Adventures, Lord Randolph “saw no reason why the old glories of Church and State, of King and country, should not be reconciled with modern democracy; or why the masses of working people should not become the chief defenders of those ancient institutions by which their liberties and progress had been achieved.” Where the retrograde Toryism of the eighteenth and nineteenth centuries often treated power as the exclusive privilege of the upper class, the new Tory Democracy articulated by the Churchills sought to unite the entire British people around a certain conception of freedom.

In a short book on Churchill’s political thought, The Will of the People, his official biographer, Martin Gilbert, stressed that Tory Democracy was bound up with a profound reverence for Parliament. In that body, the people’s representatives could truly deliberate about and come to a shared understanding of the common good. As Gilbert wrote, Churchill believed this meant “that no one class, no one interest—economic, social, or political—no one segment of the political spectrum could use the system for its own exclusive interest.” Protectionist policies, though, advanced by either radical or reactionary politicians, threatened that delicate balance by putting the interests of favored firms or industries above the nation as a whole.

Churchill’s Tory Democracy always, therefore, prioritized market competition, unlike many of the paternalists who labelled themselves “One-Nation” conservatives in both his day and our own. “Central to his essentially Tory Democrat ideas,” Andrew Roberts writes in his recent biography, “was the concept of free enterprise, from which he never resiled.” Churchill was always wary of central planning, not just because he thought it could hamper economic dynamism, but also because he considered the concentration of power in the hands of bureaucratic experts a great danger to the social harmony Tory Democracy sought to achieve.

The benefit of free enterprise to the working class was one of the great themes of Churchill’s entire political career. In his very first political speech as a young man in 1897, Churchill said that “the British workman has more to hope for from the rising tide of Tory Democracy than from the dried-up drainpipe of Radicalism.” While he embraced certain regulations to ameliorate the sometimes-sordid conditions facing the working class, he also said that he hoped “that the labourer will become (as it were) a shareholder in which he works.” He saw the market economy not as something working-class people had to be shielded against, but rather something they ought to be encouraged to participate in more fully.

By the time Churchill was elected to Parliament as a Conservative, though, his father’s vision for Tory Democracy had fallen out of favor. Arthur Balfour assumed power as prime minister in 1902 and began pursuing a protectionist agenda in the hope that it could strengthen the British Empire against the rising power of the United States and Germany. Churchill was horrified by this turn of events and warned that promulgating new tariffs on behalf of the elite class would destroy the Conservative Party’s working-class base of support built by men like Disraeli and Lord Randolph. In a May 28, 1903, speech in Parliament, the young statesman prophetically warned:

This move means a change, not only in historic English Parties, but in the conditions of our public life. The old Conservative Party, with its religious convictions and constitutional principles, will disappear, and a new Party will arise like perhaps the Republican Party of the United States—rich, materialist, and secular—whose opinions will turn on tariffs, and who will cause the lobbies to be crowded with the touts of protected industries.

The fundamental difference between Tory Democracy and protectionism, according to Churchill, is the difference between a deep spiritual principle and a shallow materialism. Balfour and the members of his coalition thought that they could win elections by offering bounties to key constituencies through tariffs. Churchill, however, thought this economic sophistry was a betrayal of conservatism’s responsibility to represent the whole nation. Although it meant breaking with the Conservative Party itself, Churchill crossed the floor of Parliament to carry on the defense of free trade. Although he joined the Liberals, he poignantly took up the very seat on the opposition benches that had been his father’s.

In the wake of this momentous decision, Churchill achieved political success precisely by rallying working-class voters against tariffs. He was involved with the establishment of an organization called the Free Trade League in the great manufacturing city of Manchester. In a speech at the League’s founding meeting, Churchill said the coalition aimed at making “it worthwhile for both political parties to be true to Free Trade” and “distinctly not worthwhile … for any candidate … to go in for Protection.” From the opposition benches, he conducted a kind of insurgent populist campaign against Conservative protectionists—something from which today’s free traders could learn a great deal.

Churchill’s first move was to link free trade to the glory of the Empire. “The history of British shipping, under the combined influence of free imports here and hostile tariffs abroad, is one of the most marvelous and impressive stories in the commercial history of the world,” he said in the aforementioned Manchester speech. Far from impoverishing the working class or relegating anyone to the status of winners or losers, free trade fueled a widespread prosperity that benefited every Briton. Above all, it was this prosperity that would hold the Empire together, not coercive power or central planning.

The Tory Democrat sees free trade as more than promoting mere economic efficiency; it is a way to preserve and even advance a traditional way of life.

Next, Churchill argued that high protective tariffs were a tax on workers and small firms for the perverse benefit of monopolistic cartels. “Here and there no doubt individuals will make great fortunes,” he went on to say, “But the small producer is very likely to lose and to be absorbed … in some great and greedy combine, and instead of being an independent producer standing on his own legs he will find himself a salaried servant of some great syndicate.” Churchill understood not only that small firms flourish through free trade, but also that they are the kind of businesses most people want to work for or even own. Rather than fall back on dry economic theory or the abstractions on which so many free traders rely, he instead chose to offer an aspirational vision of broad property ownership and an entrepreneurial spirit that had a far more expansive appeal because it answered the actual concerns of real voters.

Churchill made sure to couch all of these arguments in the most commonsensical terms possible. Take, for example, what is perhaps the most celebrated passage of the Manchester speech:

It is the theory of the Protectionist that imports are an evil. He thinks that if you shut out the foreign imported manufactured goods you will make these goods yourselves, in addition to the goods which you make now, including those goods which we make to exchange for the foreign goods that come in. If a man can believe that he can believe anything. We Free-traders say it is not true. To think you can make a man richer by putting on a tax is like a man thinking that he can stand in a bucket and lift himself up by the handle.

Even with this favorable opinion of free trade, Churchill was not a natural Liberal. In a May 1924 conversation with Sir Robert Horne, he reportedly said, “I am what I have always been—a Tory Democrat. Force of circumstance has compelled me to serve with another Party, but my views have never changed, and I should be glad to give effect to them by rejoining the Conservatives.” When the influence of grandees like Balfour and his supporters eventually waned, Churchill returned home to his father’s party and worked relentlessly to reshape it according to free trade principles.

Nonetheless, Churchill himself did not always perfectly follow the wisdom of his Tory Democrat instincts. Although the reasons the Conservatives lost the 1945 election are somewhat complex, ranging from a lackadaisical campaign to a war-weary electorate, one that stands out is Churchill’s over-reliance on abstract economic theories to critique his opponents’ socialism. At the party’s expense, for instance, he printed copies of Friedrich von Hayek’s tract The Road to Serfdom and distributed them to voters. This was not the kind of popular rhetoric that would win over the masses, and the Labour Party wound up out-competing the Tories for working-class votes. In his book Churchill’s Trial, Larry Arnn calls the tone of the 1945 campaign an example “of Churchill’s magnificent stubbornness.” He railed against socialism because of his deep and abiding commitment to free government, and yet he failed to win over the broad base of support he needed in the moment.

But after this defeat, Churchill quickly changed tack. Andrew Roberts attributes Churchill’s changing fortunes in 1951, for instance, to the prioritization of “the Tory Democrat element of his political thinking over his short-lived libertarian beliefs.” He never abandoned free enterprise, but he did change the way he advocated for it according to the circumstances before him. As Arnn puts it, “Churchill thought that private property united rather than divided people, at least under the right circumstances,” including free trade, “a social safety net to help those in need,” and regulations for “the prevention of monopoly.” In other words, Churchill set out to demonstrate that free enterprise and constitutional government were not the source of the working class’s material concerns, but rather a solution to them. This argument, rooted as it was in the traditional commitments of Tory Democracy and the actual issues facing the electorate, won Churchill back the people that spurned him just a few short years before.

Today’s free traders, unfortunately, often sound more like Churchill did in 1945 than he did in 1951. They rarely use the kind of populist rhetoric he successfully deployed to defend their own positions, and are therefore often outflanked by the paternalistic advocates of protectionism. Instead of acting as the defenders of the nation’s prosperity that they truly are, free traders too often come across as rootless cosmopolitans concerned more about aggregate numbers than the health of a particular people. The economic sophisms dominating the thoughts of elite policymakers cannot simply be answered by better charts and graphs. As Churchill understood perhaps better than any other statesman, free traders must appeal to both voters’ heads and hearts.