Land ahoy!

ADDRESSING supporters in Manchester on February 19th 1904, Winston Churchill delivered a speech that could easily describe today’s Britain. The young MP warned that victories won by past free-trade campaigners were under threat from “the fashion nowadays to sneer at the Manchester school [of economic liberalism]” that was taking hold in the newspapers and capturing chunks of the political parties. Ministers who should have known better were flip-flopping, he fretted, demanding tariffs just to please their audiences. Referring to a hero of the fight against the protectionist Corn Laws in the 1840s, he warned, “We are met to consider a very momentous question: whether… the statue of Sir Robert Peel is to be pulled down.”

History, Mark Twain observed, does not repeat itself. But it does rhyme. It is hard to read Churchill’s words and not hear their assonance. Once more Britain appears to be questioning the wisdom of the liberal economic credos of its recent past. The impetus is the announcement on March 29th by Tata, an Indian industrial giant, that it cannot afford to save its struggling British steel operations, especially its giant plant in Port Talbot, in south Wales. Tata blamed weak demand and high energy prices—but especially competition from cheap Chinese imports.

As The Economist went to press the government was in talks with potential buyers, which had allayed fears that Port Talbot would have to close entirely. Yet already the news had provoked a cacophony of condemnations of Britain’s free-trade, globalised economic model. Calls for tariffs on Chinese steel and a possible nationalisation of Port Talbot emanated not just from the hard-left Labour Party leadership but also from Conservative MPs and even (privately) some ministers. “Tata steel could spell the end for Britain’s love affair with the free market” and “Britain’s free market economy isn’t working”, ran two typical headlines.

All of which comes at a time when voters across the West—from the Republican Party in America to Scandinavia—seem to be demanding from their politicians the re-establishment and reinforcement of borders (physical and economic) between countries. In Britain hostility to the EU, itself a proxy for economic dislocation and immigration, is on the march before the June referendum. Once more the “signs of the weather” (as Churchill put it) are ominous for free traders.

Yet some perspective is warranted. The country has lived through such ruckuses in the past: during the collapse of MG Rover, a British car maker, in 2005, for example; or in 2010, when MPs and unions protested against the takeover of Cadbury, a confectioner, by Kraft, an American food-processing company. For all the chatter about protecting cherished firms and industrial heritage, of public-interest tests and strategic sectors, such moments have not significantly dented Britain’s essentially liberal instincts. That is especially true when Britain is compared with other rich economies.

Consider the polling. An international survey by YouGov in 2015 put net agreement that free trade is good for business at +6% among Americans, +3% among Germans and at -4% among the French. In Britain the figure was +40% (the country was also an optimistic outlier, ahead even of the liberal Scandinavians, on whether trade is good for jobs). A poll by the Pew Research Center found that 65% of Britons support the proposed Transatlantic Trade and Investment Pact, compared with 50% of the French and 39% of Germans.

That openness is evident across British life. The country’s car industry is almost totally foreign owned (Tata has made a great success of Jaguar Land Rover); many of its biggest airports are in Spanish hands; chunks of its energy industry belong to French and Chinese investors; its football clubs make the United Nations look monocultural. Its central bank is run by a Canadian and the London Olympics were organised by an Australian. London’s glitziest property developers are from Qatar and Malaysia and its stock exchange may soon be in German hands. In 2013 the proportion of shares in Britain’s firms owned by foreigners zoomed passed the 50% mark, to almost total public indifference.

The country’s politics reflects this dispassion. For all the hand-wringing over immigration, Britain has spawned only one party that clearly opposes globalisation: the UK Independence Party. That outfit—mild by European or, increasingly, American standards of protectionist populism—went into the general election in 2015 with two seats in Parliament and emerged with one. As for the EU referendum, it is hard to imagine many countries where the Remain and Leave campaigns would, as in Britain, squabble over which outcome would do more to lower trade barriers.

Research suggests that generational rotation will only accentuate these traits. Ipsos MORI, a polling firm, finds young Britons markedly more inclined to free markets than their predecessors at the same age. A YouGov poll in 2014 showed that those aged 18 to 24 were about half as likely as those over 60 to say that foreign ownership of British firms was a bad thing, or to support government interference in foreign takeover bids.

Don’t batten down the hatches

None of this is to say that supporters of an economically open Britain can afford to be complacent. But it does discourage over-reaction to tabloid headlines and short-lived uproars. Britons’ instincts have been forged over centuries as a maritime trading power (that same spirit infuses their language—shipshape, high and dry, the cut of one’s jib) and by a fundamentally benign experience of globalisation and trade. As Churchill said in 1904: “Large views always triumph over small ideas. Broad economic principles always in the end defeat the sharp devices of expediency.”

Correction: In the issue dated March 19th Bagehot said that Blackpool’s economy shrank by 8% between 2010 and 2015. In fact the latest figures, from 2010 to 2014, show that the town’s output (adjusted for national inflation) fell by 3.4%. Sorry.

^{Economist.com/blogs/bagehot}