Reflections on the ‘new’ economic nationalism

Abstract

What is the student of politics to make of the revival of protectionism and the new mood of economic nationalism of which it is widely held to be a symptom? It is reasonably clear why nationalism raises problems for economists: for orthodox Marxists it entrenches false consciousness and delays the final crisis of capitalism; for liberals it frustrates the optimal allocation of resources by substituting group sentiment for the rational pursuit of individual self-interest and by endowing political frontiers with an economic significance to which their economic theory is opposed. But it is not self-evident that the assumptions on which the great neo-classical systems are built are the most helpful for understanding the phenomenon of economic nationalism or for evaluating the nature of the problem which it poses for international society. Since Marx himself was profoundly uninterested in the great debate between free trade and protection, while contemporary Marxist-Leninist governments all pursue economic policies which are unambiguously nationalist, I shall confine myself to the debate within the liberal tradition.