Can protectionism ever be respectable? A skeptic's case for the cultural exception, with special reference to French movies.

• Author: Delacroix, Jacques

The concept of a "cultural exception" to free trade seems to have arisen in large part as a result of a perceived impending American hegemony over trade in some cultural products in the 1980s and 1990s. In 1992 (unfortunately, one of the last years when the U.S. government provided such figures in convenient form), the value of U.S. exports of "communication and information" products was approximately the same as the value of its aerospace exports and more than twice the value of its electronics exports. Put another way, those exports--which exclude most royalty incomes earned abroad by U.S. economic actors--would have been enough to pay the country's considerable bill for imported clothing. Although the United States has nothing like a monopoly in this matter, this kind of export grew by approximately 10 percent per year in the 1980s (U.S. Census Bureau 1994) and at about the same pace since then. According to Vaidhyanathan, commerce in "cultural products" (not otherwise specified) accounted for more than 7 percent of U.S. gross domestic product in 1999, and "copyright-sensitive" industries' exports were worth approximately $300 per U.S. citizen (2001, B7). In 2000, the total payroll of "information industries," admittedly a miscellaneous category, stood at approximately one-third of the annual payroll of all U.S. manufacturing (U.S. Census Bureau 2002). Thus, it is possible to form the impression that Americans are increasingly paying their way in the global economy by exporting such products to the rest of the world (although, contrary to a widespread notion, the total value of U.S. manufactures kept growing during the 1990s). Motion pictures and television programs, because of both their visibility and their numbers, are prominent, and increasingly so, among these cultural exports.

Between 1970 and 1995, the U.S. share of worldwide production of motion pictures rose from less than 9 percent to approximately 45 percent (UNESCO 1995, 8-1). Consider all imports of movies worldwide: seventy-four countries provided the origin of their imports in the latest issue of the UNESCO Statistical Yearbook available to me (1999). Using only the figures given for the latest year for which they offered such figures (varying from country to country between 1991 and 1994) only four--Congo, Kenya, Tanzania, and Iran--had fewer than 30 percent of their imports originating in the United States; only sixteen had less than 50 percent U.S. imports. Notably, these twenty countries included neither communist Cuba nor culturally protectionist France. This situation still prevailed for the latter country in 2002, a banner year for the French cinema in terms of revenue (European Audiovisual Observatory [EAO] 2003, 39).

Faced with this U.S. export success, several countries, including Canada (and within it, separately, Quebec), Spain, the People's Republic of China, Taiwan, and France have responded in a statist mode by claiming the right to erect protectionist barriers in the name of an ill-defined "cultural exception" to the generally accepted idea that trade protectionism is bad because it impedes economic development. Accordingly, the concept of cultural exception gained recognition from the General Agreement on Tariffs and Trade (GATT)--predecessor to the World Trade Organization (WTO)--meeting of 1994.

Among the growing list of such claimants, France has special interest because it has adopted the most active and most vocal policy of cultural protectionism (although it is seldom clearly articulated in its totality). Members of the French political elite are so serious about this matter that they have considered enshrining the cultural-exception principle in the French Constitution (Horwitch 2002), presumably to prevent future governments from ever putting it into question.

In this article, I am not considering French policy in all its complexity in order to arrive at a deep understanding of this particular case. Rather, I am using the French case, because it is convenient, to make a broader point. (For an elaborate discussion of the interrelationships between French cultural policies, France's economic transformation under globalization, internal French politics, and historical anti-Americanism, see Meunier 2000.) (1) Here I examine the French case for film protectionism, viewing it as a subset of general support for the cultural exception. I take up this challenge as a strong advocate of free trade in general, as an American academic who generally leans toward conservative positions, and as a Voltairean skeptic in matters of nationalism--but also as an empirically oriented social scientist who tries to keep an open mind. I conclude that the economic costs of this policy may well be negligible, but that its political and ethical consequences are disturbing.

Protectionism and Moribund or Terminally Ill Industries?

Protectionism is usually defined as a set of government policies designed to shield domestic producers from foreign competition. I am concerned here with protectionism applied to the allegedly special category of "cultural goods." All products are cultural in the fundamental but also trivial sense that they comprise elements of both nature and culture (knowledge). I refer here more narrowly to products that carry a heavy load of seemingly nonfunctional and nonutilitarian information, such as novels, books of poetry, paintings, sculptures, musical recordings, television programs, and motion pictures--all intended primarily to move or to entertain. (2) I focus primarily on motion pictures and to a lesser degree on television programs, but some of the arguments I develop may apply to other kinds of cultural products.

We may study protectionism in cultural industries for at least three reasons. First, these industries are reasonably large in economic terms, important in some national economies, and becoming larger. Second, they are deemed to have multiplicative effects and influence well beyond their sheer dollar/euro/yen weight (Lampel, Lant, and Shamsie 2000, 263). Third, the concept of "cultural exception" constitutes a repetitive, tenacious, and therefore possibly exemplary breach of the generally accepted idea of the desirability of free international trade (Green 1999; Salusinsky 1999, 18). Hence, it may be the top of a slippery slope leading to a renewed rejection of the idea of free trade.

For most of the informed layman's purposes, objections to trade protectionism can be reduced to two families of arguments. First, protectionism is economically inefficient, as are deviations from market processes in general. Second, protectionism constitutes a deprivation of individual freedom, a form of despotism. In ethical terms, any act or policy of protectionism by a national government violates the moral doctrine of subsidiarity endorsed by such disparate entities as the European Union and the Roman Catholic Church (Coriden, Thomas, and Heintschel 1985, 859). The principle of subsidiarity is that decisions should be made as close as possible to those they affect and thus, as a rule, not by representatives' representatives' appointees. In addition, government restrictions of behavior are often associated with the emergence of coercive bureaucracies bent on perpetuating their dominion and extending their jurisdiction. (The more police, the more different kinds of conduct become crimes.

The U.S. war on drugs, for example, would be unthinkable in a sociopolitical context with no professional police force.) Note that the despotism argument is independent of and additive to the inefficiency argument: even if trade protectionism were not economically inefficient, it would be objectionable on moral grounds.

Individuals otherwise inclined toward free markets will often accept the inefficiency of protectionist policies for two reasons. First, large zones of economic inefficiency are commonly tolerated because of absolute cost indifference regarding small expenditures. Second, a degree of economic inefficiency is often explicitly accepted in pursuit of a greater social value: according to one view, fairly widespread in organizational theory, all organizations are inefficient as compared to the markets that might provide the same goods, but they are socially acceptable because they offer the value of predictability (Williamson 1975).

Likewise, freedom-loving individuals will often make ethical choices supporting a measure of despotism in the name of the broader social interest, as in the acceptance of government regulation of airlines. (I am in no way, however, making the argument that this regulation is the best way to achieve safety.) Sometimes, the acceptance of despotic measures may even be based in large part on altruistic motives: I do not evade laws regarding compulsory vaccination, even though the optimum situation for me is one in which all children except mine are vaccinated. Given the commonness of such exceptions, one would expect a broader ethical acceptance of protectionism than both an individualist ethic and economic rationalism would predict. The question I raise here is whether the cultural exception may not be a privileged entry point for such deviations (or tolerance).

At the level of national policy, industry and labor leaders as well as politicians will often claim exemptions from the rules of free trade. These claims commonly revolve around the "infant industry" argument and around the notion that the social benefits of "temporary relief" granted a given industry outweigh any economic harm such relief may cause.

The French government and other governments--some of which are unambiguously for free trade in other sectors (such as Australia; see Salusinsky 1999)--have formulated and promulgated seemingly durable protectionist policies of indeterminate duration in favor of industries that are neither young nor temporarily in difficulty, but old and apparently afflicted by long-term ailments. Prime among...