Ajay Kumar at 12:09, 27 August 2023

2023-08-27T12:09:57Z

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{{Short description|Ideology that favors state intervention to protect the domestic economy}}
{{Use dmy dates|date=April 2017}}
{{nationalism sidebar|types}}
'''Economic nationalism''' is an ideology that prioritizes [[Economic interventionism|state intervention]] in the economy, including policies like domestic control and the use of tariffs and restrictions on labor, goods, and capital movement.<ref name=":0">{{Cite book|last=Gilpin|first=Robert|url=https://press.princeton.edu/books/paperback/9780691022628/the-political-economy-of-international-relations|title=The Political Economy of International Relations|publisher=Princeton University Press|year=1987|isbn=978-0-691-02262-8|pages=31–34|language=en}}</ref> The core belief of economic nationalism is that the economy should serve [[Nationalism|nationalist]] goals.<ref>{{Cite journal |last=Helleiner |first=Eric |date=2021 |title=The Diversity of Economic Nationalism |journal=New Political Economy |volume=26 |issue=2 |pages=229–238 |doi=10.1080/13563467.2020.1841137 |issn=1356-3467 |doi-access=free}}</ref>

Economic nationalists oppose [[globalization]] and some question the benefits of unrestricted [[free trade]]. They favor [[protectionism]] and advocate for [[Autarky|self-sufficiency]].<ref>{{Cite book |last=Buell |first=Raymond Leslie |url=https://books.google.com/books?id=PcBAAAAAIAAJ |title=International Relations |date=1929 |publisher=H. Holt |pages=95–120 |language=en}}</ref> To economic nationalists, markets are to be subordinate to the state, and should serve the interests of the state (such as providing national security and accumulating military power). The doctrine of [[mercantilism]] is a prominent variant of economic nationalism.<ref>{{Cite book|last=Helleiner|first=Eric|url=https://books.google.com/books?id=1jEYEAAAQBAJ|title=The Neomercantilists: A Global Intellectual History|date=2021|publisher=Cornell University Press|isbn=978-1-5017-6014-3|language=en}}</ref> Economic nationalists tend to see international trade as [[Zero-sum thinking|zero-sum]], where the goal is to derive relative gains (as opposed to mutual gains).<ref name=":0"/>

Economic nationalism tends to emphasize [[Industrialisation|industrialization]] (and often aids industries with state support), due to beliefs that industry has positive [[spillover effects]] on the rest of the economy, enhances the self-sufficiency and political autonomy of the country, and is a crucial aspect in building military power.<ref name=":0"/>

== History ==
While the coining of the term "economic patriotism" has been attributed to French parliamentarian [[Bernard Carayon]],<ref name="EconomistColbert">{{Cite news |url=https://www.economist.com/node/5662969 |title=French economic nationalism: Colbert was here |date=23 March 2006 |newspaper=The Economist |access-date=22 May 2018}}</ref><ref>{{Cite journal |last1=Callaghan |first1=Helen |last2=Lagneau-Ymonet |first2=Paul |date=December 2010 |title=The Phantom of Palais Brongniart: "Economic Patriotism" and the Paris Stock Exchange |url=http://www.mpifg.de/pu/mpifg_dp/dp10-14.pdf |journal=MPIfG Discussion Paper 10/14 |pages=6}}</ref> there is evidence that the phrase has been in use since earlier times to describe nationalist intervention by the state.<ref>{{Cite news |url=https://www.washingtonpost.com/news/the-fix/wp/2014/07/17/economic-patriotism-explaining-the-vague-finger-wagging-immortal-phrase/ |title='Economic patriotism': Explaining the vague, finger-wagging, immortal phrase |last=Bump |first=Philip |date=2014-07-17 |newspaper=The Washington Post |access-date=2018-05-24}}</ref> In an early instance of its use, speechwriter [[William Safire]] in 1985, in defending [[Ronald Reagan|President Reagan's]] proposal of the national [[Strategic Defense Initiative]] [[missile defense]] system, wrote, "Our common denominator is nationalism – both a military and economic patriotism – which inclines us to the side of pervasive national defense."<ref>{{Cite web|url=https://www.nytimes.com/1985/09/19/opinion/essay-the-year-of-dee-fense.html |title=The Year of Dee-fense |last=Safire |first=William |date=19 September 1985 |website=[[The New York Times]] |access-date=24 May 2018}}</ref>

In the mid-to-late 1800s, Italian economic thinkers began to gravitate towards the theories of Fredrich List. Led by Italian economists like Alessandro Rossi, policies favoring nationalist protectionism of industries gained momentum. The Italian government had previously been ignoring Italian industry in favor of trade with France, and it seemed content to watch other European powers modernize and gain influence through their colonies.<ref name=":1">{{Cite journal|last=de Rosa|first=Luigi|title=Economic Nationalism in Italy|journal=Faculty of Maritime Economics|pages=537–574}}</ref> Various groups began to put pressure on the Italian government, from textile to ceramic manufacturers, and although the Italian government imposed tariffs the industrialists felt that it was not enough. The push for economic nationalism with industrialization and protectionism quickly spun Italy into an economic crisis in 1887, exposing Italian industrial woes.<ref name=":1" />

The Austro-Hungarian empire’s ethnic diversity made it an unusual case of the rise of European nationalism.<ref name=":2">{{Cite journal|last1=Schulz|first1=Max-Stephen|last2=Wolf|first2=Nikolaus|date=May 2012|title=Economic nationalism and economic integration: the Austro-Hungarian Empire in the late nineteenth century|journal=The Economic History Review|volume=65|issue=2|pages=652–674|doi=10.1111/j.1468-0289.2010.00587.x|s2cid=154778592|url=https://www.cesifo.org/DocDL/cesifo1_wp2813.pdf}}</ref> The fall of the Austro-Hungarian Empire, while mostly caused by the empire's defeat in [[World War I]], was also caused by the lack of economic and political integration between Austrians and Slavs.<ref name=":2" /> Though Hungary relied on Austria economically, as it provided a market for Hungary's agriculture production, there was a deep social and economic rift between the Austrians and Slavic people, who actively boycotted and protested Austrian rule in favor of more autonomy in the Balkans.<ref name=":2" /> Regions within the empire began using forms of price discrimination to strengthen national economies. As a result, intra-empire trade began to fail. Grain prices fluctuated throughout the empire after the 1880s into World War I, however an ethnic breakdown of the empire showed that [[grain trade]] between two predominantly Austrian territories, or two predominantly Slavic territories, led to a gradual decrease in grain prices from the 1870s up to World War I.<ref name=":2" /> This was mainly due to the increased presence of railroads in the late 1800s. The only trade pairing that did not observe decreasing grain prices were two territories of varying nationality. Overall, grain prices were cheaper, and the price gap was smaller, when the two territories trading more closely resembled each other ethnically and linguistically.<ref name=":2" />

At an economic summit in September 1974, one topic of discussion was the gradual dissolution of economic barriers to the movement of goods, people and services across borders in the post [[World War II]] era. According to [[William E. Simon]], who was United States Treasury Secretary at that time, there was concern that [[inflation]] would motivate economic nationalism: "This has had enormously beneficial effect; Now, however, there is some danger that inflation may drive countries in economic nationalism."<ref>{{cite web|url=https://books.google.com/books?id=Mh1XAAAAMAAJ&q=economic+nationalism |title=The Financial Conference on Inflation, Washington, D.C., September 20, 1974|last=Simon|first=William E.|year=1974}}</ref>

== Philosophy ==
The philosophical foundations of economic nationalism are difficult to trace due to the ideology's lengthy history and its unique appeal to different types of groups. The four general pillars come from its political, cultural, economic, and social roots.<ref name=":3">{{Cite journal|last=Abbas|first=Ali|title=Economic Nationalism|journal=Journal of Competitiveness Studies|volume=25}}</ref> Though details surrounding these four pillars may differ depending on a nation's status, generally a nation's own status and economic stability takes precedence over another. During the late-19th and early-20th century this meant an emphasis on [[protectionism]], increased role of the government, and even [[colonialism]], as it was a means of modifying an occupied country's culture and creed.<ref name=":3" /><ref name=":1" />

In both Germany and Italy, [[Friedrich List|Fredrich List]] played a role in the rise in economic nationalism during the 1800s. List brought elements of economic theory and national identity together, as he postulated that an individual's quality of life was in correlation with the success of their country and was a well-known proponent of [[tariff]]s in the United States.<ref name=":1" /><ref>{{Cite journal|last=Notz|first=William|date=June 1926|title=Frederick List in America|journal=The American Economic Review|volume=16|pages=249–266}}</ref> List's ideas on economics and nationalism directly challenged the economic theories of [[Adam Smith]], as List felt that Smith reduced the role of national identity too much and favored of a globalized approach which ignored certain complexities of political life.<ref name=":1" />

== Modern examples ==
As a [[policy]] is a deliberate system of principles to guide decisions and achieve rational outcomes, the following list of would be examples of an economic nationalistic policy, where there is consistent and rational doctrine associated with each individual protectionist measure:

* Proposed takeover of [[Arcelor]] (Spain, France and Luxembourg) by [[Mittal Steel Company]] (India)<ref>{{Cite news |url=https://www.ft.com/content/f5a8ac82-5938-11db-9eb1-0000779e2340 |title=Fighting economic nationalism in deals |last1=Capron |first1=Laurence |last2=Guillén |first2=Mauro |date=12 October 2006 |work=Financial Times |access-date=22 May 2018}}</ref>
* French governmental listing of [[Danone]] (France) as a 'strategic industry' to pre-empt a potential takeover bid by [[PepsiCo]] (USA)<ref>{{Cite news |url=https://www.economist.com/node/4352015 |title=Europe's nascent merger boom |date=1 September 2005 |newspaper=The Economist |access-date=22 May 2018}}</ref><ref name="EconomistColbert"/>
* Blocked takeover of [[Atlantia (company)|Autostrade]], an Italian toll-road operator by the Spanish company [[Abertis]]<ref>{{Cite news |url=https://www.economist.com/node/7267543 |title=Don't take the high roads|date=7 August 2006 |newspaper=The Economist |access-date=22 May 2018}}</ref>
* Proposed takeover of [[Endesa]] (Spain) by [[E.ON]] (Germany), and the counter-bid by [[Gas Natural]] (Spain)<ref>{{Cite news |url=https://www.economist.com/node/5578849 |title=To the barricades|date=2 March 2006 |newspaper=The Economist |access-date=22 May 2018}}</ref>
* Proposed takeover of [[Suez (company, 1997–2008)|Suez]] (France) by [[Enel]] (Italy), and the counter-bid by [[Gaz de France]] (France)<ref>{{Cite news |url=https://www.economist.com/node/5575262 |title=From Karl Marx's copybook|date=2 March 2006 |newspaper=The Economist |access-date=22 May 2018}}</ref>
* [[United States Congress]]ional opposition to the takeover bid for [[Unocal Corporation|Unocal]] (USA) by [[CNOOC]] (PR China), and the subsequent takeover by [[Chevron Corporation|Chevron]] (USA)<ref name="Moosa2012">{{cite book|author=Imad Moosa|title=The US-China Trade Dispute: Facts, Figures and Myths|url=https://books.google.com/books?id=a9qCSQWx43cC&pg=PA62|date=1 January 2012|publisher=Edward Elgar Publishing|isbn=978-1-78100-155-4|page=62}}</ref>
* [[Dubai Ports World controversy|Political opposition]] in 2006 to sell port management businesses in six major U.S. seaports to [[Dubai Ports World]] based in the United Arab Emirates<ref name="Moosa2012"/>
* Limits on foreign participation and ownership in Russia's natural resource sectors and selected Russian industries, beginning in 2008<ref>{{Cite web |url=https://www.utu.fi/fi/yksikot/tse/yksikot/PEI/raportit-ja-tietopaketit/Documents/Liuhto_32008.pdf |title=Genesis of Economic Nationalism in Russia |last=Liuhto |first=Kari |date=March 2008 |website=University of Turku |access-date=23 May 2018 |archive-url=https://web.archive.org/web/20180523173204/https://www.utu.fi/fi/yksikot/tse/yksikot/PEI/raportit-ja-tietopaketit/Documents/Liuhto_32008.pdf |archive-date=23 May 2018 |url-status=dead }}</ref><ref name="Rutland2016">{{cite book|last=Rutland|first=Peter|editor1=Pål Kolstø|editor2=Helge Blakkisrud|title=The New Russian Nationalism: Imperialism, Ethnicity and Authoritarianism 2000–2015|jstor=10.3366/j.ctt1bh2kk5.19|year=2016|publisher=Edinburgh University Press|isbn=978-1-4744-1042-7|page=348|chapter=The place of economics in Russian national identity debates}}</ref>

The reason for a policy of economic protectionism in the cases above varied from bid to bid. In the case of Mittal's bid for Arcelor, the primary concerns involved job security for the Arcelor employees based in France and Luxembourg. The cases of French Suez and Spanish Endesa involved the desire for respective European governments to create a [[National champions|'national champion']] capable of competing at both a European and global level. Both the French and US government used national security as the reason for opposing takeovers of Danone, Unocal, and the bid by DP World for 6 US ports. In none of the examples given above was the original bid deemed to be against the interests of competition. In many cases the shareholders supported the foreign bid. For instance in France after the bid for Suez by Enel was counteracted by the French public energy and gas company Gaz De France the shareholders of Suez complained and the unions of Gaz De France were in an uproar because of the privatization of their jobs.

More recently, the economic policies advocated by [[Steve Bannon]] in the wake of the [[2016 United States presidential election]] have been considered by some scholars and political commentators{{which|date=February 2020}} as a (partial) return to the economic nationalism of the [[Theodore Roosevelt]] Era.<ref>M. Nicolas J. Firzli : [http://www.analysefinanciere.org/2017/01/26/understanding-trumponomics 'Understanding Trumponomics', Revue Analyse Financière, 26 January 2017 – Supplement to Issue N°62] {{Webarchive|url=https://web.archive.org/web/20170211160222/http://analysefinanciere.org/2017/01/26/understanding-trumponomics/ |date=11 February 2017 }}</ref><ref>{{Cite news |url=https://www.ft.com/content/e455a8ba-1ea6-11e7-a454-ab04428977f9 |title=What Trump has really learned from Russia |last=Hartwell |first=Christopher |date=11 April 2017 |work=Financial Times |access-date=23 May 2018}}</ref>

The modern phenomenon of the [[European Union]] has in part led to a recent resurgence of economic nationalism.<ref name=":4">{{Cite journal|last1=Colantone|first1=Italo|last2=Stanig|first2=Piero|date=2019|title=The Surge of Economic Nationalism in Western Europe|journal=Journal of Economic Perspectives|volume=33|issue=4|pages=128–151|doi=10.1257/jep.33.4.128|s2cid=211447432|doi-access=free}}</ref> [[Western Europe]] as a whole has become more economically globalized since the end of [[World War II]], embracing economic integration and introducing the [[Eurozone|euro]].<ref>{{Cite book|last=Helleiner|first=Eric|title=Economic Nationalism in a Globalizing World|publisher=Cornell University Press|year=2004}}</ref> This did lead to positive economic impacts, such as steady wage increases. However, from the 1990s through the Great Recession, there has been an increasing distrust in this globalized system. With rising income inequalities and little protection against natural economic occurrences{{which|date=November 2021}}, many Europeans have begun to embrace economic nationalism.<ref name=":4" /> This is because modern European nationalists see their nation's economy becoming generally more globalized at the expense of one's own economic status.<ref name=":4" /> Globalization, like the type one can observe in the European Union, is easy to oppose as it creates winners and losers. Those who lose their jobs due to globalization are more likely to be drawn to parties espousing economic nationalism.<ref name=":4" />

Although some European nations were impacted differently, nations that saw an increased exposure to the China trade stock did move significantly further right politically and generally supported more nationalist and protectionist policies.<ref name=":4" /> Even industries which did not see increased exposure to the [[China shock|China trade shock]] generally shifted towards right wing policies. This shows that, while some voters shifted their political support due to their worsening economic conditions, many voters shifted to right-wing policy due to a community-wide reaction from the China trade shock.<ref name=":4" /> Though the shock took place in the 1980s, its economic effects still impact the European electorate today. In particular, the Brexit vote showed the impact this shock had on the electorate, as regions which were most impacted by the China trade shock were still economically weak (in terms of GDP per capita) in comparison to other regions like London, even over a decade later. There is a strong positive correlation in regions most impacted by the China trade shock and an increase in votes to leave the European Union.<ref name=":4" />

Immigration plays a large part in the policy of modern economic nationalists. With a considerable influx of immigration, particularly from parts of eastern Europe and the Middle East, those who gravitate towards economic nationalism find that their national identity and culture has been diluted by increased immigration. Though studies have shown marginal improvements to both native employment and wages when put in competition with immigrants.<ref name=":4" />

The impact of Europe's move towards a globalized economy has led to the passing of nationalist policies and the support of [[Right-wing populism|right-wing populist]] [[Right-wing populism#Right-wing populist political parties|parties]], which generally espouse [[Nationalism|nationalist]] and [[Social conservatism|socially conservative]] views - though there was also a growth in support for [[Left-wing populism|left-wing populist]] parties, such as [[Podemos (Spanish political party)|Podemos]] in Spain, and [[Syriza]] in Greece.<ref>{{Cite journal |last1=Bergh |first1=Andreas |last2=Kärnä |first2=Anders |date=2021-10-01 |title=Globalization and populism in Europe |url=https://doi.org/10.1007/s11127-020-00857-8 |journal=Public Choice |language=en |volume=189 |issue=1 |pages=51–70 |doi=10.1007/s11127-020-00857-8 |s2cid=213654236 |issn=1573-7101|hdl=10419/210945 |hdl-access=free }}</ref><ref>{{Cite journal |last1=Colantone |first1=Italo |last2=Stanig |first2=Piero |date=November 2019 |title=The Surge of Economic Nationalism in Western Europe |journal=Journal of Economic Perspectives |language=en |volume=33 |issue=4 |pages=128–151 |doi=10.1257/jep.33.4.128 |s2cid=211447432 |issn=0895-3309|doi-access=free }}</ref> Such parties have formed governments in a number of European countries, including Poland ([[Law and Justice]]), Hungary ([[Fidesz]]), and, arguably, the United Kingdom, where the [[Conservative Party (UK)|Conservative Party]], headed by PM Boris Johnson, has absorbed the vast majority of [[UK Independence Party|UKIP's]] support since Brexit.<ref>{{Cite news |date=2020-01-07 |title=Boris Johnson, Hungary and rightwing European populism |work=Financial Times |url=https://www.ft.com/content/d132e700-3142-11ea-9703-eea0cae3f0de |access-date=2022-06-10}}</ref> This is a prominent example of the rise in nationalism and anti-globalization, as [[Brexit]], a result of lengthy campaigns by UKIP and the [[Euroscepticism in the United Kingdom|Eurosceptic]] faction of the Conservatives for a national [[2016 United Kingdom European Union membership referendum|referendum]], is regarded by many opponents as a manifestation of economic (and social) nationalism, and right-wing populism more broadly.<ref>{{Cite journal |last=Alogoskoufis |first=George |date=2017 |title=The European Union Economy, Brexit, and the Resurgence of Economic Nationalism |url=https://heinonline.org/HOL/Page?handle=hein.journals/forwa41&id=29&div=&collection= |journal=Fletcher Forum of World Affairs |volume=41 |pages=27}}</ref> However, the majority of UK [[Opinion polling on the United Kingdom rejoining the European Union (2020–present)|opinion polls since Brexit]] in have shown support for rejoining the EU, or ceasing the Brexit process [[Opinion polling on the United Kingdom's membership of the European Union (2016–2020)|during the period 2016-2020]], in part likely due to the economic impacts of the deal agreed by the EU and UK.<ref name=":6">{{Cite journal|last1=Born|first1=Benjamin|last2=Gernot|first2=Muller|date=October 2019|title=The Costs of Economic Nationalism: Evidence from the Brexit Experiment*|journal=The Economic Journal|volume=129|issue=623|pages=2722–2744|doi=10.1093/ej/uez020}}</ref>

== Criticism ==
Consumer preference for local goods gives local producers monopoly power, affording them the ability to lift prices to extract greater profits. Firms that produce locally produced goods can charge a premium for that good. Consumers who favor products by local producers may end up being exploited by profit-maximizing local producers.<ref name="Harry Binswanger">{{cite web|title='Buy American' is UN-American|url=http://capitalismmagazine.com/2003/09/buy-american-is-un-american/|publisher=Capitalism Magazine|access-date=17 April 2012|author=Harry Binswanger|date=5 September 2003}}</ref> For example; a [[protectionist]] policy in America placed tariffs on foreign cars, giving local producers (Ford and GM market) market power that allowed them to raise the price of cars, which negatively affected American consumers who faced fewer choices and higher prices.<ref>{{cite web|title=The Big Three's Shameful Secret|url=http://www.cato.org/publications/commentary/big-threes-shameful-secret|publisher=The [[Cato Institute]]|access-date=17 April 2012|author=Daniel J. Ikenson|date=6 July 2003}}</ref> Locally produced goods can attract a premium if consumers show a [[Local purchasing|preference]] towards it, so firms have an incentive to pass foreign goods off as local goods if foreign goods have cheaper costs of production than local goods.<ref name="Harry Binswanger"/>

[[Raymond Leslie Buell]] criticized economic nationalism, arguing that it contributed to competition and warfare between states as they were motivated to annex territory containing resources, markets and seaports.<ref>{{Cite book |last=Buell |first=Raymond Leslie |url=https://books.google.com/books?id=PcBAAAAAIAAJ |title=International Relations |date=1929 |publisher=H. Holt |pages=114–119 |language=en}}</ref>

==See also==
*[[Alter-globalization]]
*[[Anti-globalization movement]]
*[[Autarky]]
*[[Domestic sourcing]]
*[[Economic patriotism]]
*[[Nationalization]]
*[[War economy]]

== References ==
{{Reflist}}

== Further reading ==
* {{Citation |last=Baker |first=David |title=The political economy of fascism: Myth or reality, or myth and reality? |journal=New Political Economy |volume=11 |issue=2 |year=2006 |pages=227–250 |doi=10.1080/13563460600655581 |s2cid=155046186 }} <small>(a review of economic nationalism as manifested under the various forms of generic fascism)</small>
*Buell, Raymond Leslie. 1925. "Economic Nationalism." in ''International Relations.'' H. Holt.
*Fetzer, T. (2020). [[doi:10.1017/nps.2019.123|Nationalism and Economy]]. Nationalities Papers.
*Suesse, Marvin (2023). ''[https://www.cambridge.org/core/books/nationalist-dilemma/7C3C68EA9C049E34CCF82526FD3CF7F9 The Nationalist Dilemma: A Global History of Economic Nationalism, 1776–Present]''. Cambridge University Press.

== External links ==
* {{Commons category-inline}}

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[[Category:Economic nationalism| ]]
[[Category:Development economics|Nationalism]]
[[Category:Economic ideologies|Nationalism]]
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[[Category:Populism]]

Economic nationalism - Revision history

Ajay Kumar at 12:09, 27 August 2023