Current events and Luigi Einaudi: against customs duties and protectionism

Luigi Einaudi against customs duties and protectionism

Luigi Einaudi denounced from the very beginning of his work as an economist and journalist the harm of protectionism, of narrow categories that aim to protect high prices and profits to the detriment of consumers, creating oligarchic interest groups that destroy competition to the benefit of the few and to the detriment of the many. 

Free trade stimulates producers to innovate, modernise, improve production systems, lower prices, increase output and export. 

Protectionism, on the other hand, provokes counterclaims from other countries, which in turn close their markets and collapse exports, stifle innovation by maintaining technological backwardness and coarse products, encrust acquired positions and privileges, reduce economic growth, raise prices and impoverish a large part of the population.

Already in 1898 in La Stampa, he analysed the harmful effects of ten years of tariffs and trade war between Italy and France, from which Italy came out with broken bones (Luigi Einaudi, Le tendenze libero-scambiste e le tariffe doganali in Italia, La Stampa, 27 dicembre 1898). For Einaudi, customs duties, subsidies and monopolies had to be abolished.

In 1913, Einaudi recalled that “protection has the virtue of giving rise to numerous enterprises, eager to drill their neighbours or to quickly enjoy the profits that the right to rob others gives them. Too many of these enterprises spring up, many of them ill-equipped, overburdened from the outset by enormous start-up costs, launching lucre on the part of promoters, false purchase costs, wrong machinery, etc. The further one goes, the more these enterprises artificially raised with duties cry out that they cannot live, claim that protection is not enough and must be increased." (Luigi Einaudi, La logica protezionista, La Riforma Sociale, dicembre 1913, pp. 822-872 | digital document p. 287)

In 1919, Einaudi called for 'taking off the tyrannical yoke of the two or three false representations that... defame [Italian farmers and industrialists] in the eyes of the public, portraying them as people who are incapable of working except in the shadow of enormous and prohibitive duties'. He added that “if ingenuity, skill, industriousness are lacking, no artificial remedy is needed”. (Luigi Einaudi, Tracotanze protezionistiche, Corriere della Sera, 12 novembre 1919)

Einaudi continued in particular in the early 1920s to attack the pursuit of unfair protectionist advantages through customs duties by narrow power groups masquerading behind claims to defend public interests, considering these articles so significant that he included them in 1955 in the collection of some of his most important writings “Il Buongoverno”. (Luigi Einaudi, Spropositi protezionistici, Corriere della Sera, 9 ottobre 1921) (Luigi Einaudi, I limiti del protezionismo, Corriere della Sera, 11 ottobre 1921)

Luca Einaudi