Tim Worstall made himself (more) unpopular with Compass last week by pointing out that their idea of creating a form of national socialism rather resembled the sort of economy favoured by National Socialists. In a think piece entitled ‘Progressive Protectionism’, Colin Hines espouses a system in which countries “rebuild and re-diversify their economies by limiting what goods they let in and what finance they choose to enter or leave the country.” This happens to be much the same policy favoured by the British National Party. Hines has responded by calling this a “libellous smokescreen” and I have no wish to poke this particular hornet’s nest, other than to say that while ‘Progressive Protectionism’ is certainly unoriginal, it borrows less from Herr Hitler than from Mr Benn.

In 1976, Tony Benn came up with his ‘Alternative Economic Strategy’, of which Hines’ scheme is a virtual carbon copy. As described by Dominic Sandbrook in the latest volume of his monumental history of post-Churchillian Britain, Benn believed he could save the British economy by cutting the country off from foreign competition.

“The premise of the so-called Alternative Economic Strategy was that, in a globalized world, Britain could only reboot its stalled economy by temporarily cutting itself off from external pressures. Under this strategy, the government would introduce stringent controls on foreign imports and the flow of capital, effectively throwing up a protectionist barrier to stop too many foreign goods getting in. Behind this trade wall, they could adopt a properly socialist policy, with full employment, steadily rising wages, booming demand and hence a resurgent manufacturing sector, all under the direction of a souped-up National Enterprise Board.”

This was justifiably viewed as economic lunacy by the rest of Jim Callaghan’s Cabinet (who were hardly a band of Randian objectivists). They understood that such an anachronistic policy would lead to international retaliation on a grand scale which would further cripple British industry. In addition to violating various free trade agreements, including EEC membership, Benn’s “siege economy” was almost certain to lead to mass unemployment, severe deflation and shortages of essential imports. In the long term, it would stifle innovation and savagely curtail economic growth.

The only significant difference between Benn’s ruse and that of Hines is that the latter believes in turning the whole EU, not just the UK, into one large protectionist bloc. It is a matter of debate whether that would make the policy more or less disastrous, but disastrous it would surely be. “Benn’s alternative strategy would probably have been a catastrophe,” Sandbrook writes. “For one thing, he consistently refused to accept that a siege economy would probably annihilate what was left of British manufacturing. What was more, he seemed completely indifferent to the importance of financial discipline and international confidence, as if he could just wish away the new world of global competition and fluctuating exchange rates... in Benn’s imagination the rest of the world appeared as a sinister conspiracy of American bankers, European moneylenders and multinational corporations, plotting to undermine British socialism.” Benn, he concludes, “remained a little Englander to the last.”

After politely listening to Benn’s protectionist fantasies, Callaghan rejected the Alternative Economic Strategy in its entirety, but the scheme remained popular with many on the left of the Labour party and it was eventually incorporated into the 1983 election manifesto, famously described by Gerald Kaufman as the “longest suicide note in history”. Michael Foot’s crushing defeat in that election forced the party to abandon many of its most reactionary and economically illiterate ideas, of which the Alternative Economic Strategy was surely one. It seems that there are some who think it is time for a revival, but if resurrecting policies from Labour’s most dismal period of opposition qualifies as “progressive” then this much abused word no longer has any meaning.