Protectionism is bad when Trump does it – so why is it so often welcomed by British cities?

Protectionist in chief, Donald J. Trump. Image: Getty.

Do we stand on the verge of a new trade war? In light of competition from elsewhere, the drawbridge is being pulled up to shelter local industry from these malevolent foreign forces. And that, argue some policy makers, is going to help keep money in the economy and create jobs.

I’m not talking about Donald Trump, steel and whiskey. I’m talking instead about the idea of councils buying their goods and services locally, an idea that has been dubbed ‘Corbynomics’ and has Preston as its poster child. But the parallels are striking.

In recent years Preston City Council in particular has been active in increasing its spend on local businesses, giving them preference over suppliers from elsewhere. This has brought both curiosity from some policy makers and strong support from others, with John McDonnell describing this brand of ‘municipal socialism’ as the kind of radicalism needed across the country.

What is curious though is how differently policies promoting protectionism are viewed at the local and national level. The lines against international trade barriers are well rehearsed, and Donald Trump has been roundly criticised for his approach, with even his economic advisor quitting over it. And yet paradoxically protectionism is welcomed at the local level, somehow viewed as a defence for small businesses rather than the same politics of populism.


The same applies to the idea of local currencies. There are a number of local currencies in the UK, such as the Exeter and Bristol (tagline “Our city. Our money”) and pounds. The principle is that they support independent businesses by encouraging people to shop locally – in a war of David (local independents) versus Goliath (big national or multinational companies), it is argued that these policies help level the playing field. Of course, this is exactly the argument that Trump makes about US steel (David) and China (Goliath).

The struggles of the US steel industry are unlikely to be down to unfair trade practices, nor the deluge of cheap Chinese products. (Chinese steel accounts for just 2 per cent of all steel imports into the USA.) Similarly, the challenges that weaker city economies face have little to do with local authorities spending their budgets with companies outside their areas, nor people choosing to buy from Amazon rather than their local high street. Instead these struggles are caused by the ability of places to attract high-skilled investment into their economies, and the ability of these businesses to ‘export’ their wares to a regional, national or international market. This is caused by a number of issues, of which low skills of the workforce is chief amongst them.

So as US trade tariffs have been criticised by many, we must also view protectionist policies at the local level in light of the same criticism. Successful cities are ones that are open to business, irrespective of where these businesses are based. We should be encouraging them to increase trade, not shut it down.

Paul Swinney is head of policy & research at the Centre for Cities, on whose blog this article first appeared.

You can hear him discuss these issues on a recent episode of Skylines, the CityMetric podcast.

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A brief history of airline booking systems

Thanks, airlines. Image: Getty.

Are algorithms trying to steal our children? That’s the question at the heart of the recent airline ticket pricing scandal. Are budget airlines trying to squeeze more money out of families by deliberately allocating them seats in separate parts of the plane, then forcing them to pay a fee so that children can be seated next to their responsible adult?

The airlines claim that when the fee isn’t paid, seats are simply randomly allocated. When the BBC’s Watchdog programme did some trials, a statistician claimed the result – in which every single person who booked was assigned an undesirable middle seat – was less likely than a National Lottery win.

As far as price gouging goes, airlines certainly have the means, motive, and opportunity. Plane ticket booking systems are a science developed over decades, and before they could rely on computers there were all sorts of wild and wonderful systems and contraptions: simple paper ledgers were replaced with index cards, which became blackboards, which became vast systems of boards of coloured chips. There was even a mechanical device that represented flight capacity, with tubes representing flights, filled with tiny plastic balls representing the seats. When a seat was booked on a fight, a button was pressed and a ball would pop out of the corresponding tube.

Algorithmic price adjustments have become a key part of this model, enabled by the vast amount of data that an airline booking system has to track just to function. Airlines have a huge incentive to maximise the number of people they can book on to any given flight and the amount of money they can extract from any given individual, too. While a passenger may be presented with a simple choice between economy and business, an airline has a far more sophisticated model based on how many tickets it can sell at any given price – which is why prices can fluctuate so wildly on online booking sites.

The person in the seat next to you may to all intents and purposes have the same flying experience, but as far as the airline is concerned will have bought a completely different ‘product’. As well as how far ahead a ticket is purchased, it’ll also factor in the likelihood that a ticket is being bought for business or pleasure: if it believes a ticket bought last minute midweek is most likely to be bought by someone on a work trip, it’ll jack up the prices.


This has inevitably led to an attitude of deep suspicion towards these companies. The jury is out on whether the widely believed idea that companies use browser cookies to hike the price on a second visit is actually something that really happens: one study found that, in 59 per cent of cases, checking the price again anonymously actually resulted in a higher price than if not trying to mask the user’s identity. In fact, it could just be a consequence of how volatile every other part of the pricing system is: but everyone still believes it anyway.

Whether or not this latest controversy is deliberate attempt to gouge people or the result of an algorithm that’s not been properly thought through, in an industry that’s grown up around gaming the system it wouldn’t be particularly shocking if someone had tried to do something like this to coin in a few more booking fees. On the face of it doesn’t seem like all that a great strategy: aside from the existing PR backlash from anxious families, it doesn’t take much imagination to ponder the, at best, tiresome, scenarios that might result from randomly seating unaccompanied five-year-olds on a packed flight.

The UK Civil Aviation Authority policy on this is that children should never be seated more than one seat away from a responsible adult: some of the budget airlines have simply made paying a fee a requirement for families. Presumably the algorithms will report the cost-benefit analysis of this grimy behaviour and adjust the fees accordingly.

There might be other, more profitable avenues anyway. Perhaps you could accept a cash payment from unruly teenagers to be moved away from the square parents they’re sick of after a two week holiday? Or charge people travelling on business a small fee to be surreptitiously parted from a particularly flatulent colleague? And what do the algorithms have to say about sedating passengers and stacking them up in coffins?

This article previously appeared on our sister site, the New Statesman.