By Greg Godels

August 30, 2018

Over a decade ago, I wrote that the era of global internationalism– popularly called “globalization”– was coming to an end. Today, it is apparent that this prediction anticipated the rise and popularity of economic nationalism, a political trend that challenges the institutions and policies of free-market globalism. Just as free-market globalism began to supplant the Keynesian consensus in the late 1970s, economic nationalism is threatening to supplant the internationalism of market fundamentalism. Like the stagnation and inflation of the 1970s, the shock of 2007-2008 brought the weaknesses, shortcomings, and failures of the reigning consensus to the fore. Consequently, then and today, many ruling elites are searching for new approaches that will repair the leaking capitalist ship.

In the US, the political rise of nationalism is associated with the ascension of Donald Trump. In the context of the ongoing intense and bitter struggle over the Trump presidency, it would be easy to dismiss Trump’s nationalism as simply a crude play for the baser sentiments of vulgar patriotism and xenophobia. To do so would be to miss a deeper, underlying, and growing trend within the US ruling class toward economic nationalism.

Associated with the trend is the stepping away from regional and international trade agreements and a growing comfort with economically grounded sanctions and extortionate tariffs, a willingness to foment and press trade warfare, an unabashed effort to advance US corporate interests over that of global “partners” and a willingness to press those interests even against those “partners.”

In terms of military strategy, the nationalist turn shows less interest in the globalist missionary goal of bringing unfettered capitalism and its politico-judicial apparatuses to the renegade and heathen countries (“humanitarian interventionism,” “regime change”) and a greater interest in simply promoting and protecting US corporate interests. For example, militarism, fear-mongering, and saber-rattling serve more and more to drive customers toward costly, but secure US energy resources and toward purchase of advanced US military hardware.

In an article on “The Era of Trump” remaking of the Republican Party, Janet Hook, writing in The Wall Street Journal, notes Trump’s abandonment of “the party’s traditional commitment to free trade, fiscal conservatism and a hawkish foreign policy,” the set of positions that came to be shared with the Democratic Party in the post-Reagan era.

Though Trump challenges that consensus, he does so inconsistently. He has disputed with the globalists over regime change in the DPRK and Syria and on disengaging from Afghanistan and Iraq. But he has been harassed into withdrawing his earlier olive branch to Russia. And his bizarre belligerence toward the current Iranian government stands as an anomaly from the nationalist agenda which rejects sanctimonious “human rights” zeal.

Of course the continuing attack on Latin American progressive governments remains a cornerstone of bipartisan and persistent sphere-of-interest nationalist politics since the Monroe Doctrine.

And Trump is not the only voice of US nationalism. Obama, toward the end of his tenure as President, questioned his own globalist foreign policy that led to the disastrous regime change in Libya, a policy crafted by Hillary Clinton and her allies in the Obama Administration.

Clinton and the recently expired Republican Senator McCain have been leading voices for swift military intervention and “regime change” wherever resistance to the globalist agenda arises.

Many in the top ranks of the US labor movement support the tariff regimen of economic nationalism and have opposed globalism for years. As the left flank of the Democratic Party mainstream, labor support for tariffs demonstrates the broad appeal of economic nationalism. Even Senator Schumer– a leading Democrat– has given qualified support to Trump’s tariff policies.

In the Battle of Ideas

Thus, it is not surprising that ideological defenses of economic nationalism are coming forward. A recent issue (8-25/26-18) of the Wall Street Journal’s weekend opinion and discussion section, Review, features two vigorous arguments for nationalism and trade intervention.

The WSJ has been generally circumspect about Trumpism, but with GDP numbers jumping, low official unemployment, a burgeoning stock market, and strong earnings reported, its enthusiasm for economic nationalism has flourished.

Occupying the entire front page and a spill-over to the second page, Israeli philosopher, Yoram Hazony’s article, The Liberty of Nations, mounts a stout defense of the classic nation-state that emerged in Europe step-by-step with the birth and maturation of capitalism. He lauds the institutions that emerged alongside this development– parliamentarism and a rights-and-contracts-based judiciary– as further evidence of the righteousness of nationalism.

Of course Hazony disconnects the development of these ideas from capitalism and attaches them instead to nationalism. It is the “cohesion” or “fellow-feeling” of nationalism that enables civil society and “democracy,” he contends. Without this social “glue” of nationalism, Hazony maintains that the values and institutions so comforting to Western elites would be fragile or shattered: “National cohesion is the secret ingredient that allows free institutions to exist…”

But if national “cohesion” is a condition for a harmonious nation state, then it is difficult to reconcile this condition with the promotion of diversity– ethnic, religious, and political– that Hazony also claims as a feature of nationalism. The entire history of the development and clash of European nation-states would seem to cause one to recoil from this conclusion. Sparking World Wars is no ringing endorsement for the tolerance of “cohesive” nationalism.

While Hazony draws attention to the nationalism of common culture, sentiment, and self-identity– the “fellow-feeling”– he fails to acknowledge the nationalism of liberation, self-determination, and national independence. For most of the world’s peoples, nationalism means escape from the oppression of colonial, neocolonial, or imperialist domination. While the origins of modern nationalism may be found in the rise of capitalism and its superstructure, the dynamic of progressive contemporary nationalism is found in its liberating function– a fact in which Hazony, The Wall Street Journal, Donald Trump and his ilk are uninterested. The former (identity-based nationalism) is today decadent and dangerous, often leading in a nativist direction; the latter (anti-imperialist, independence-oriented nationalism) marks the road toward national dignity for millions of people.

But the nationalism advocated by Hazony is the nationalism arising as an oppositional current to capitalist globalism, free-market internationalism. It is “Donald Trump’s appeal in the US,” “the driving force behind the resistance to the European Union and its policies in Britain, Italy, Austria, Poland and Hungary,” “reflected in the success of Narendra Modi in India, Shinzo Abe in Japan and Benjamin Netanyahu in Israel” that animates the emerging nationalism. And it is Hazony’s task to popularize it for those within the ruling classes who oppose the globalist paradigm.

The economic aggressiveness of the new nationalism is defended on the facing inside page from the Hazony article by Jesse Norman, a member of the British House of Parliament for the Conservative Party, a former director of Barclays, and an author. Norman tackles the formidable assignment of reconciling the thought of free-market deity, Adam Smith, with the efficacy of trade barriers. His What Adam Smith Knew About Trade Wars recognizes the long standing, deeply implanted view that tariffs and free markets are water and oil, chalk and cheese with capitalism’s defenders. For the classical political economists, any meddling in markets is a heresy.

But Norman sees it otherwise.

Fighting the power of received opinion, Norman argues: “It is competition that creates economic value and keeps markets honest. But Smith believed that government intervention doesn’t always undermine effective competition. On the contrary: Government can create red tape, but it can also bust trusts and level playing fields. Unfortunately, people today tend to hear only the first half of this message.”

“Smith also recognized that sometimes tariffs and other temporary retaliations might be called for… Indeed, Smith supported the long series of laws known as Navigation Acts, through which Britain used its naval power to exercise strict control over its colonial and other trade. As he put it simply, ‘defense is of much more importance than opulence’.”

In case his message is missed, Norman states it bluntly: “Adam Smith, then, was no market fundamentalist.”

At a time when economic nationalism is on the rise, Norman’s bold attack on a fixture in the globalist canon is welcome words to its supporters. It, like the Hazony defense of nationalism, seeks to legitimize the new paradigm emerging from the wreckage of the 2007-2008 collapse. Whether economic nationalism overtakes the globalist vision will be decided by ruling elites in the period ahead; clearly, there is serious conflict over the direction of global capitalism.

What Does This Mean for Working People?

Economic nationalism is not salvation from the ravages of globalism. The dollars that US-based corporations may gain from sanctions or tariffs will not find their way to the wallets of working people. That lesson will soon be driven home to tens of thousands of US steelworkers facing the expiration of contracts at the end of August. Workers have endured three years of an austerity contract sold to the members as required by adverse market conditions. Now, with an immensely profitable domestic steel industry enjoying high prices thanks to Trump’s 25% tariff on steel imports, US Steel has offered a seven-year union contract described by the workers’ union as an “extremely insulting proposal.”

Trapped between union leaders unwilling to unleash workers’ power against corporations and the same leaders’ unproductive commitment to collaboration with corporate power, workers will soon discover the impotence of economic nationalism. Any and all benefits will be snatched by the corporations. Protectionism protects corporate interests.

Economic nationalism leads to war.

Where the globalist, liberal internationalist regimen was centered upon US dominance, and guaranteed free and open global trade, where human rights were harnessed to the right to do business in every country, where independent action was targeted for destruction by the global police, military intervention by the US, NATO, and its surrogates was common.

But the new nationalism is fostering fresh, opportunistic alliances arranged around immediate economic advantage and born from strains on existing historical ties. A shared gas field has tied Turkey to Qatar and support for Qatar’s resistance to its neighbors on the Arabian Peninsula. After harsh hostilities, Turkey is now friendly with Russia, to the ire of NATO. And Russia has, all at the same time, courted the unlikely trio of Iran, Israel, and Saudi Arabia.

The new nationalism encourages expediency over principle, opportunism over identity of interest and a consequent sharp rise in military sales and militarism to “protect” vital (read: corporate) interests. Sanctions, tariffs, and other economic threats can swiftly lead to conflict, even general war.

Like globalism, economic nationalism attempts to answer capitalism’s problems, though not the problems of working people.