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Why Economic Nationalism Fails

This essay is adapted from remarks delivered by the author at the Philadelphia Society on October 19, 2019.

I will readily admit that I am neither a prophet nor the son of one. I do not know what the economic future of conservatism will be, but I can say something about what it ought to be. Conservatives ought to reaffirm the good of economic liberty, both domestically and internationally. Free markets and free trade, sustained by the rule of law and a culture of basic propriety, as Adam Smith outlined, ought to undergird the economic policy of any free and prosperous nation without neglecting the importance of non-state, non-economic spheres, such as religion and family.

However, at present economic liberty has fallen out of favor with some who see a sea change in recent events—from the election of President Trump in the United States to Great Britain’s “Brexit” referendum—moving away from a perceived elitist, globalist liberalism and back toward the old order of nation states, not only politically but also economically.

To some degree, this observation is correct. There is nothing all that new about the “national conservatism” of people like Yoram Hazony or Patrick Deneen. There has always been a nationalist and populist strand to conservatism, represented by the likes of Pat Buchanan, for example. On this view, immigration is presumed to be largely harmful, while tariffs, subsidies, and other protectionist economic policies are viewed as good and necessary. This not-so-new nationalism currently represents the most popular alternative to free markets and free trade among conservatives.

Which Nationalism?

That said, I’m an academic, so I’m a little dismayed by the lack of precision in the current debate. The recent “national conservatism” conference this summer is a case-in-point. It did a great job demonstrating the broad divergence of opinion among conservatives, from people like Yuval Levin and Richard Reinsch to Yoram Hazony and Patrick Deneen to former ambassador John Bolton and TV personality Tucker Carlson. These people do not together represent a coherent movement. Yet they all spoke under the same banner: a new, friendlier nationalism, a “national conservatism.”

The problem here is that nationalism can mean a lot of things. Without parsing out what those things are and discussing the extent of their desirability and compatibility, both those who support this new nationalism and its conservative critics are destined to misunderstand not only each other but even others who claim the same label. With that in mind, and with a view toward my stated goal of promoting an economically liberal future for conservatism (which is not a contradiction in terms), I offer the following four possible historic components of various nationalisms:

  1. Ethnic Nationalism – At its worst, this is the nationalism of Nazis, the KKK, and other “blood and soil” movements around the world. It is the nationalism no one in polite society wants to be associated with, and rightly so. That it is the original form of nationalism, however, must be admitted. The word “nation,” after all, comes from the Latin natio, which comes from nasci, meaning “birth.” Indeed, the English words “race” and “nation” were historically—and sometimes still are—used interchangeably, and ethnic nationalism is the belief that “the State and the nation [meaning race] must be co-extensive,” to quote Lord Acton, who notably, contra John Stuart Mill, opposed that theory. [1]
  2. Cultural Nationalism – This is often related to—but in my view separable from—ethnic nationalism. To value one’s national—or even ethnic—cultural achievements and to wish to preserve them does not require conflating one’s racial group with the state or other racial groups with hostile foreign powers. To be proud to be an American, for example, does not require one to be proud of everything the United States has ever done, including slavery, Jim Crow, or Wounded Knee. One may simply love democracy, the Protestant work ethic, hotdogs, and/or baseball (as all real Americans should).
  3. Political (or Civic) Nationalism – At their core, the many varieties of political nationalism put the principle of national sovereignty at the heart of domestic and international politics. In practice, this may come from sophisticated theory or populist sentiment. Militarily, it may be hawkish or embrace a more passive kind of restraint, as both invading other countries and staying out of foreign wars can be justified on the principle of national interest. The common ground comes down to where the decision to do so is made: not by a transnational governmental body, like the EU or UN, but by a sovereign national state.
  4. Economic Nationalism – This nationalism seeks to prioritize domestic industries over/against foreign imports. This is the nationalism behind “America first” economic policies, such as tariffs on foreign goods and subsidies for domestic manufacturers. Those today who claim the United States needs an “industrial policy” like Saudi Arabia are economic nationalists. They have so far rejected “zombie Reaganism” as to embrace the Frankenstein’s monster of Mondale conservatism.

Now, any particular nationalism may be a combination of several of these, and alternatively being sympathetic toward one or two of these may not be enough to classify one as “nationalist.” I am not a nationalist, for example, but I do think patriotism is a good thing and that national sovereignty and the national interest deserve their political due. That said, I am not a “globalist” or “imperialist” either. Rather, I am a classical liberal, and that extends into the domain of political economy.

Conversely, a nationalist may be a nationalist without necessarily embracing all of these nationalisms. Yoram Hazony, for example, is at pains in his book—and elsewhere—to distance his brand of nationalism from ethnic nationalism. In doing this, he conflates political and cultural nationalism, defining nations in terms of shared language, history, and religion, as well as the group loyalties arising from them. And there are some, like Senator Elizabeth Warren, who are primarily, if not entirely, economic nationalists, who may have little care for national sovereignty, patriotism, or cultural heritage.

Economic Nationalism vs. National Sovereignty

It is my contention, however, that while all of these nationalisms are separable, some are actually incompatible. In particular, the principle of national sovereignty is incompatible with the policies of economic nationalism.

Edmund Burke once remarked that “[o]f all things, an indiscreet tampering with the trade of provisions is the most dangerous…. [T]here is nothing on which the passions of men are so violent, and their judgment so weak, and on which there exists such a multitude of ill-founded popular prejudices.” Burke notably lauded the publication of Adam Smith’s Wealth of Nations, and Smith’s insights therein about the positive-sum nature of exchange extend from the domestic trade of the butcher, the baker, and the brewer to the international trade between nations across the globe. What makes an exchange positive-sum is when it is faster and cheaper for me to buy something from you rather than making that thing myself, and vice versa. This is the principle of comparative advantage, a principle too many, under the sway of “ill-founded popular prejudices,” have lost sight of today.

The products that are a matter of a nation’s comparative advantage are those that its economy is the best at producing at any given time. Comparative advantages change over time, and it is a mistake to presume that yesterday’s comparative advantage still holds for today or tomorrow. Rather, exploiting one’s comparative advantages means prudently playing to one’s economic strengths and thereby strengthening one’s economy. A nation that knows and exploits its comparative advantages has greater power of self-determination internationally than one that does not. It has more to offer, more chips on the table, more with which it can bargain with others. And it is only free markets that allow for the coordination of information necessary for economic actors to continually adapt to the needs of any given moment. In this way, free markets and free trade strengthen national sovereignty.

To be clear, however, my first principle is neither liberty nor national sovereignty but natural law, without which liberty is but license and sovereignty illegitimate. There is such a thing as self-evident truth, originating from God, discoverable through reason, sanctified by religion, and confirmable through conscience. It is no coincidence that the global expansion of the free enterprise system—the economic arrangement most consistent with human nature—has also led to the most monumental reduction in poverty in human history. The overwhelming weight of evidence supports the conviction that when human beings, created in the image of God as free, rational, social, and moral animals, are allowed to creatively serve each other’s needs and responsibly plan their own lives, they flourish. And when a nation’s citizens flourish, the nation as a whole flourishes as well.

By contrast, economic nationalism actually injures national sovereignty as well as human flourishing. Despite the intention of punishing foreign competitors to domestic manufacturers, Russell Kirk rightly noted that “higher prices for consumers” is the result “within any country that sets high tariffs.” Tariffs do indeed mean fewer imports but, therefore, also higher prices and fewer choices for American families. According to President Trump’s Office of the United States Trade Representative, the president’s tariffs have affected a wide variety of meat, seafood, produce, chemicals, oils, rubber, luggage and other baggage, wood products (e.g., plywood, flooring), paper products, fabrics, glass, metals, electronic components, and more. Tariffs also mean less competition for domestic producers. Indeed, that is their explicit goal. However, less competition means a less dynamic economy, one more vulnerable to sudden changes and shocks, as the economic misfortunes of US Steel evidence, for example.

Furthermore, as our new nationalists today are ever wary of the evils of imperialism, I would remind them that no less than William F. Buckley called tariffs:

the meanest form of imperialism, in that [they are] a denial of economic ascendancy and a denial of hope to poorer nations for the sake of immediate short-term gain of competitors in the wealthier nations, which are strategically harmful in any event.

On this basis, he continued to argue, “It is … an obligation intellectual, historical, and ethical for young conservatives to reject facile calls for protectionist policies.” Tariffs make for a better instrument of imperialism than for supporting a global community of sovereign nation-states, as the EU, for example, knows well. It may be internally economically liberal between its member states, but it is externally more like a medieval guild of nations, unilaterally enacting duties and other restrictions on foreign imports on behalf of all its members.

Similarly at-odds with the national interest, subsidies for domestic industries prop up uncompetitive companies at the public’s expense. Kirk correctly called subsidies “costly economic mistakes.” California cotton subsidies, which persist despite yearly droughts, are a case-in-point. Other crops that require far less water, such as almonds, could more profitably be grown in the region in the absence of subsidies for cotton. Thus, the opportunity cost is not merely economic but also environmental in this case, which of course includes further negative externalities. On a national scale, as increased public spending is now routinely financed through increased debt to foreign powers—30 percent of public debt at present—national sovereignty, in that case, is directly undermined while economic growth is slowed or hindered. The protectionist policies of economic nationalism, therefore, are no recipe for national greatness.

Economic Freedom in the US Today

The good news for economic liberty is that there is more to it than eliminating subsidies and expanding the scope of international trade. Free markets are open markets—markets with as few barriers to entry as possible within the bounds of just laws. In fact, since President Trump’s election in 2016, the United States has actually improved its ratings in both the Fraser Institute’s Economic Freedom of the World report and the Heritage/Wall Street Journal Index of Economic Freedom. Many of my fellow free marketers have been far too pessimistic about the Trump administration, missing the forest of the economy as a whole for the few trees of increased tariffs and subsidies.

Conversely, however, many economic nationalists have misattributed our current economic strength to protectionism. Rather, this is due to significant deregulation and the reduction of the corporate tax down to a rate comparable to other developed countries. Our economy is stronger today than it was under President Obama because our economy is freer today than it was under President Obama. That said, when we look at specific metrics, we can see that while things like “business freedom” have improved, “trade freedom” and “fiscal health” are on the decline. At some point, the latter may outweigh the former, which would be bad news, indeed.

Conservatives today ought to reaffirm and promote economic liberty in its entirety, as did so many notable conservatives of the past, such as Edmund Burke, Russell Kirk, and William F. Buckley. This is not merely an issue of data points like GDP or the Gini coefficient. Rather it is a matter of the economic burden placed upon American families, the opportunities available to American workers, the markets available to American companies, and the strength of our nation both domestically and internationally. I do not know what direction the future holds. But if the tide of history has truly turned and support for free markets and free trade continues to decline on the right as well as the left, conservatives who have not lost sight of the principles and values they aim to conserve, ought to stand athwart history, yelling, “Stop!” when no one else will.

Economic Freedom and Religion

Indeed, the value of economic liberty extends beyond conventionally economic issues to some of those most valued by social conservatives. We must say, “Stop!” to those on the right and the left who would conflate the nation with a particular religious—or anti-religious—tradition. The sort of cultural nationalist that advocates for an established religion funded by a church tax shares this conflation of church and state with one-time Democratic presidential hopeful and unemployed skateboarder Beto O’Rourke, who wants to tax churches that do not conform their doctrines and practices to the progressive dogma of the day. A recent essay at First Things aptly labelled O’Rourke’s position “woke integralism.” In both cases, advocates must bring church and state into alignment and suppress their detractors. In this view, pluralism must be persecuted. Thus, it is not liberal but totalitarian.

Rather, religion should neither be subsidized nor taxed by the state. Religiosity has dramatically declined in precisely those European states that have retained established churches, and we all know of the mess that anti-religious movements like the French and Russian revolutions wrought upon the piety of those peoples. By contrast, religiosity remains high in the United States, where the market for religion continues to be one of the freest in the world. This religiosity has even endured letting in scary international imports, such as Roman Catholicism!

Despite the fears of religious conservatives, it is worth noting that in the United States those religious institutions that are in decline tend to be those that do not deliver on the product they claim to offer. When a church or other religious institution says, “Come here for salvation!” but all one hears inside are the mantras of popular political activism, it is no wonder that such institutions are not gaining members. By contrast, religious groups such as Orthodox Jews, Southern Baptists, and Mormons, all of whom prominently emphasize their distinctly spiritual character and call their members to rigorous moral and ascetic observance, tend to do quite well. Thus, O’Rourke’s claim that they and others should be compelled to alter their moral teaching about the nature of the family offers the prospect of financial ruin to those that would resist and declining influence and membership to those that would compromise, ultimately undermining religion in general no matter how any particular institution might respond. In the face of such illiberal proposals, conservatives must say, “Stop!”

Classical Liberalism and the Family

Speaking of the family, we must also say, “Stop!” to those like Yoram Hazony and Patrick Deneen who claim that classical liberalism presumes an atomistic individualism that undermines familial integrity. It does not. Not to their favorite boogeyman John Locke, at least. Regarding marriage, Locke wrote in his Two Treatises of Government that “GOD having made man such a creature, that in his own judgment, it was not good for him to be alone, put him under strong obligations of necessity, convenience, and inclination to drive him into society, as well as fitted him with understanding and language to continue and enjoy it. The first society,” he continues, “was between man and wife, which gave beginning to that between parents and children….”[2]

It may be objected that for Locke marriage is founded upon consent, and that is true, but even Hazony admits that much about 50 pages after criticizing Locke for saying the exact same thing. What is too often omitted by Locke’s critics is that he believed there to be duties between parents and children in a state of nature, that is, apart from any consent and as a matter of natural law. Contrary to Patrick Deneen, who claims classical liberal anthropology views human beings as “nonrelational creatures,” Locke actually believed that we are not self-sufficient, atomistic individuals, but that we are rather, by nature, “drive[n] … into society,” because it is “not good for [us] to be alone,” clearly alluding to Genesis 2:18.

Deneen does a little better reading Locke than Hazony, but not by much. He still finds insidious, radical individualism in Locke’s claim that adult children may choose whether or not to accept an inheritance from their parents. Locke does in fact say that, but Deneen overlooks the larger points that Locke was making: firstly, that if adult children do accept an inheritance they are at that point bound to terms that are not of their own making and beyond their consent. And secondly and more importantly, Locke was specifically objecting to the ancient Roman idea of a paterfamilias, who—at least on paper—retained absolute control over his wife and children, including their very lives, until his death. Does Deneen not think adults should get to make their own decisions so long as their fathers live?

Furthermore, Locke clearly differentiates the family from “political society” due to the different “ends, ties, and bounds” of family relationships, i.e., due its unique nature and teleology. Thus, conflating Locke’s understanding of political society and the family, the latter of which is founded as much upon nature as consent, grossly misrepresents his views. When one takes the time to understand Locke in context, the new nationalist narrative reads more like sloppy historical fiction than serious historical criticism. Last I checked, conservatives were supposed to value history, rather than distort it to serve present-day political ends.

Indeed, in addition to Locke, when we look at the earliest modern representative governments, as is well-known, the franchise was commonly restricted to heads of households, indicating that these first modern liberal democracies all viewed the household or family as the most basic unit rather than the individual. Now, call me a radical, but I personally support women’s suffrage. On that account I will happily be accused of individualism. But one could not fairly charge most early classical liberals with radical individualism even on that account. Indeed, the economist Frank Knight succinctly summarized this point in 1939, stating that “in the nature of the case, liberalism is more ‘familism’ than literal individualism. Some sort of family life, and far beyond that, some kind of wider primary-group must be taken as they are, as data, in free society at any time….”[3] Classical liberalism does not undermine the family by presuming an atomistic individual. Rather, as the historical record shows, it starts with the family, thus presuming it.

Classical liberalism’s emphasis on the family also has an economic aspect, evinced by the fact that intact, two-parent families thrive in relatively free economies like the United States. Healthy families increase their children’s likelihood of economic success. As one recent study concluded, “People raised outside stable two-parent families are more likely to be in the lowest income quintile as adults and less likely to be in the highest quintile than people raised in stable two-parent families.”[3] In a fairly free economy like the United States, healthy homes make for more favorable economic outcomes. Free markets reward healthy families and thus support, rather than undermine, them. The importance of healthy families, then, ought to be part of any future free market political economy for conservatives.

The Common Benefit of All

Cultural, non-state, non-economic institutions, like religion and family, matter for a free and prosperous economy as well as free markets and free trade, and it is conservatives in the United States who historically have understood that best. Whatever our coming economy may look like, conservatives should say, “Stop!” to any economistic, technocratic, or purely political solutions to social problems. Nations, I hope we can all agree, are far more than simply the market plus the state. Families, religious institutions, schools, and other spheres of society all have vital roles to contribute not only to the common good but also to the national economy.

My background is theology. Given that background, I’d like to conclude with a quote from the medieval Christian theologian Hugh of St. Victor. Not only do non-economic spheres contribute to the economy, but a healthy, free economy also contributes to all those other spheres of life. “Commerce,” he wrote, “penetrates the secret places of the world, approaches shores unseen, explores fearful wildernesses, and in tongues unknown and with barbaric peoples carries on the trade of mankind. The pursuit of commerce reconciles nations, calms wars, strengthens peace, and commutes the private good of individuals into the common benefit of all.”[4] The expansion of economic liberty since the Industrial Revolution and the monumental, qualitative improvements to human life occasioned by it testify to the veracity of this conviction. Rather than turn our backs on the legacy of economic liberty we’ve built and received in the United States and in the West more broadly, conservatives today ought to further its advancement for the strength of our nation and families, the peace of the world, and “the common benefit of all.”

 

[1] That both Acton and Mill were liberals demonstrates additional terminological problems, as liberalism and nationalism are commonly set opposite one another today. Addressing this is outside the scope of this essay, however, and I honestly find the current distinction convenient, even if ahistorical. On this see Lord Acton, “Nationality,” in Lord Acton: Historical and Moral Essays, ed. Daniel J. Hugger (Grand Rapids: Acton Institute, 2017), 112.

[2] John Locke, Two Treatises of Government, new ed. (London: Whitmore and Fenn; C. Brown, 1821 [1690]), 252-253

[3] Dierdre Bloome, “Childhood Family Structure and Intergenerational Income Mobility in the United States,” Demography 54, no. 2 (April 2017): 541-569. The quotation here is from the draft version, emphasis added.

[4] Hugh of St. Victor, Didascalicon, trans. Jerome Taylor (New York; Lordon: Columbia University Press, 1961), 2.23, 77.

Reader Discussion

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on December 11, 2019 at 09:49:41 am

Excellent. I might have added Friedrich List (and have included the critical biography that was published one hundred years later).

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Sander Fredman
on December 11, 2019 at 11:38:13 am

Placing one’s head in the ideological sands of Free Trade forces one to assume a rather vulnerable posture!
One may characterize the above essay as either informed, au courant, and “liberal”
One may also characterize it as sheer and utter Balderdash.
Perspective is the key to one’s selection of terms.

Let us begin with the essayist’s claim that Smith opposed tariffs and other protective state actions.
“Smith’s insights therein about the positive-sum nature of exchange extend from the domestic trade of the butcher, the baker, and the brewer to the international trade between nations across the globe.”
Yet Smith also recognized that certain critical manufactures, etc ought to be protected and he actually supported tariffs and other restrictions on “unbridled Free Trade. Smith also recognized that a nations security was of equal importance as was its commerce.
One must also remember that both Smith and our present crop of “Free Traders” ASSUME that others, other nations will likewise adhere to our same altruistic conceptions of an international trade regime.
Sadly, that is not, nor was it ever the case. One need only examine the manipulative interventions of the Chinese Government these past three decade. (more on that later). I would also remind the essayist that it was precisely the application of tariffs by the USA during the 19th and early 20th centuries that allowed America to grow into the greatest industrial power of that time. AND, YES, wages, opportunities AND industries grew and developed at a record rate.

Now let us examine the “concern” the essayist displays for the American family:
“That said, when we look at specific metrics, we can see that while things like “business freedom” have improved, “trade freedom” and “fiscal health” are on the decline. At some point, the latter may outweigh the former, which would be bad news, indeed.
Conservatives today ought to reaffirm and promote economic liberty in its entirety, as did so many notable conservatives of the past, such as Edmund Burke, Russell Kirk, and William F. Buckley. This is not merely an issue of data points like GDP or the Gini coefficient. Rather it is a matter of the economic burden placed upon American families, the opportunities available to American workers, the markets available to American companies, and the strength of our nation both domestically and internationally. I do not know what direction the future holds. But if the tide of history has truly turned and support for free markets and free trade continues to decline on the right as well as the left, conservatives who have not lost sight of the principles and values they aim to conserve, ought to stand athwart history, yelling, “Stop!” when no one else will.”
Indeed, someone must yell, “STOP”.
Unfortunately, the essayist is determined to gag the wrong actor.
How about the BURDEN placed on American families as a result of diminished employment prospects caused by the widespread protectionist policies of the Chinese, the EU and other supposed “allies.” The essayist, not unlike countless other academics, NRO Free Market types and globalists have succumbed to the delusion that “If only we treat them with special courtesies, they will adopt our way of thinking. They will liberalize. Goodness Gracious, we have a chance to make them just like us.” Kindly examine how transformative this voluntarily assumed supine posture has been with China, a nation which operates under a different premise, i.e., “national interest and sovereignty. A nation which compels those that wish to partake of “Free Trade” must surrender their intellectual property, must establish joint ownership with the ChiComm government or its state supported subsidiary corporations and must comply with censorship edicts issued by the chiComms.
Yes, someone should yell, “STOP”
It appears that The Trumpster is actually attempting to do so but his voice is being drowned out in the cacophonous maelstrom of “Free Markets” bellowed incessantly by those whose head is buried so deeply in the ideological sands of Free Trade that they are unable, or UNWILLING to hear the plaints and lamentations of their fellow citizens.
Who cares if a Laptop may be purchased for $25 less when made overseas if one lacks the income to purchase it in the first place. Who cares if TV's are quite inexpensive if you are one of those workers formerly employed by one of the 20,000 defense related firms (small and mid-size) that have terminated operations in the past three decades?

(more later) but BALDERDASH!!!!

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gabe
on December 11, 2019 at 12:19:21 pm

Placing one’s head in the ideological sands of Free Trade forces one to assume a rather vulnerable posture! (Part 2)

“However, less competition means a less dynamic economy, one more vulnerable to sudden changes and shocks, as the economic misfortunes of US Steel evidence, for example.”

BTW: Latest data indicates that steel prices have not risen as a result of recent tariffs. As previously stated, this nation has seen a rather significant decline in defense related industrial capabilities. If one wishes to muse on “less dynamism” would we not want to factor in the loss of the dynamics consequent upon the loss of those companies. Recall how the Arsenal of Democracy worked and enabled us to overcome the military / tactical advantages of our enemies during World War II. It WAS NOT due to the sole efforts of the giant corporations but rather due to the coordinated effort (yes, the CEO of GM orchestrated it) of thousands of small and otherwise unknown companies.
Question: Can we repeat this? How dynamic are we at this date?–
Comment gratis: This decline in the cited industries occurred before The Trumpster initiated his tariff regime and was, in part, due to the predatory practices of both the chiComms and the “subsidy-loving” group of *Allies* otherwise known as the EU.
Asa to comparative advantage: Oh, so true! A nation must maintain a comparative advantage if it wishes to maintain its position.
“The products that are a matter of a nation’s comparative advantage are those that its economy is the best at producing at any given time. Comparative advantages change over time, and it is a mistake to presume that yesterday’s comparative advantage still holds for today or tomorrow. Rather, exploiting one’s comparative advantages means prudently playing to one’s economic strengths and thereby strengthening one’s economy.”

Yest, let us examine this:
In the past three decades, we have seen the ChiComms overtake, or achieve parity with the US in supercomputing, chipmaking, 5G telecommunications and many other technologies that were formerly a distinctly American dominated field.
Much of the ChiComm growth has come as a result of intellectual property theft, highly restrictive agreements enforced by the ChiComms on Western corporations seeking access to the Chinese markets and the rather remarkable ability of the Chinese (as the Japanese in earlier decades) to “reverse” engineer products, processes and technologies that would otherwise have been protected by both US and International patent laws.
Free Marketeers are fond of quoting the old saw about the “wheelwright” who upon losing his trade was able to enter a Ford factory and make tire rims. How charming!
One should ask, however, what task, what profession will now replace the tire rim as an alternative for the scientist, the toolmakers, the process engineers formerly involved in developing and manufacturing all of the once “advantaged” technologies that American ingenuity created.

I applaud the ChiComms their ingenuity, their intelligence and their hard work. However, the same may not be said for their unwillingness to abide by the “rules of Free Trade. Moreover, the ChiComms have a grand strategy, "Made in China 2050", with interim stages planned along the way. This plan includes the investment of vast sums of money to insure that a) the ChiComms attain preminence in critical "advantaged" technologies, b) they will be able to deny access to those that are non-compliant with chiComms demands / policies, c) continued "investment" in Chinese corporations (often subsidiaries of the Peoples Lib Army, BTW).
So much for the failure of economic nationalism.
Confronted with such a situation, ought we not respond in a similar BUT uniquely American fashion. The essayist's professed "concern" for the American family rings hollow in face of his unwillingness to recognize the problems emanating from his "Free trade" regime, much less to do anything about it other than to cite the "Sainted" Adam Smith.

I deplore the ideological blindness, the deliberate obtuseness of our Free Trade ideologues who refuse to recognize that others DO NOT play fair. I have but two cheeks. One has been slapped already. I am not prepared to continue to accept the insults.
Those with their head in the sand also have two cheeks. Do they not know that not only are they in a vulnerable position but that their vaunted ideological sanctum may have already been penetrated?
(There is more but why bother?).

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gabe
on December 11, 2019 at 13:30:06 pm

[…] Today, Law & Liberty published the text of my lecture for the Philadelphia Society in October: “Why Economic Nationalism Fails.” […]

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The Virtue of Liberalism – Acton Institute PowerBlog
on December 11, 2019 at 19:00:41 pm

Uneconomic, 17th century mercantalist blather...

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OH Anarco-capitalist
on December 11, 2019 at 22:14:01 pm

Why do free-traders rail against mercantilism and protectionism when the US practices them and not when our trading partners do. Unless trade is balanced it is not free trade. I am advocate of 0 tariffs and a VAT tax. Cheap imports haven't made up for the loss of good paying jobs. If it had, we wouldn't be having this conversation. Free trade may be good for upper 10%, but hasn't been good for bottom 90% over the last 40 years.

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Tom
on December 12, 2019 at 10:48:37 am

von Clausewitz:

"War is policy with other means"

Gabe (and anyone whose head is not buried in the sand):

"Economics IS policy with other means"

von Clausewitz is often wrongly quoted as having said "diplomacy" not "policy" but policy properly illumines the meaning.

Economics may under certain conditions simply be one of the other means by which and through which one's policy and military objectives are achieved.

And this ain't no freakin' blather. simply observe what has transpired and the "capture of not just critical markets but critical resources AND transport routes and ports.
Look it up and see who now controls most major seaports and transport routes to include the Panama Canal, the Suez and in Europe; all this under the guise of "economic" cooperation.

Balderdash! How is that for 17th century blather?

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gabe
on December 12, 2019 at 10:54:59 am

Great comments, thanks for pointing these out to the "free trade above all else" meme, regardless of the damage it inflicts on millions of American workers, their families, and their communities. Free trade is the goal, but until everyone plays by the same rules, it is a panacea and detrimental to the American worker and our nation's best interests.

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Leslie Smith
on December 12, 2019 at 12:21:48 pm

Communist China defines economic nationalism. To deny or ignore this reality discredits any author.

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David Thomas
on December 13, 2019 at 23:18:42 pm

At risk of engaging with someone who has nothing better to do than write 3,000 word comments, I would point out that your posts show a great ignorance of economic theory. This wouldn't normally be a problem, but since you are talking about economics it is. The reason American steel prices have not increased is combination of factors (greater internal American free trade and the development of more efficient blast furnaces). It is axiomatic that if the quantity of steel available at a certain price decreases and the quantity demanded stays the same, then the price will increase. There is no way around that.

Moreover, read about what's going on in the Chinese economy. It's a disaster. Chinese GDP statistics are completely bogus, because they are almost entirely manufactured by make work programs that do not increase wealth. One sector (the one that actually trades) subsidizes everything else, leading to massive inefficiencies. Moreover, when the Chinese subsidize certain industries (like steel) they are essentially sending us free steel. Bad for steel workers, but good for autoworkers who's jobs rely on that steel.

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Lenti
on December 13, 2019 at 23:24:59 pm

This just isn't true. It's bad for us if those we trade with don't have free trade, but it's much worse for them. If you look closely (more closely than the statists who believe China has mastered central planning), The Chinese economy is a disaster. The significant growth China experienced in 90s and 2000s are a result of just how poor china was after communism. They opened up there markets slightly, and so corresponding growth. But the Chinese system of having a small productive sector of the economy subsidize everything else is failing. Just not failing as badly as pure communism.

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Matt
on December 13, 2019 at 23:26:22 pm

This just isn't true. It's bad for us if those we trade with don't have free trade, but it's much worse for them. If you look closely (more closely than the statists who believe China has mastered central planning), The Chinese economy is a disaster. The significant growth China experienced in 90s and 2000s are a result of just how poor china was after communism. They opened up there markets slightly, and so corresponding growth. But the Chinese system of having a small productive sector of the economy subsidize everything else is failing. Just not failing as badly as pure communism.

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Matt
on December 13, 2019 at 23:30:19 pm

Maybe because as Americans, they are trying to participate in our civil discourse instead of another countries?

Why must free trade be balanced? A trade imbalance is when one nation exchanges goods for currency, without demanding goods back in exchange. That's good for American consumers. The hollowing out of the middle class is not a result of trade. It's a result of inflation (making it impossible to save, which harms the possibility of capital investment!) and government distortion on our society. Listen to the new Law and Liberty podcast for some insight into this.

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Joe
on December 14, 2019 at 12:26:05 pm

Am well aware of the internal stresses of the ChiComm economy. AND even on their financial system (pretty scary, BTW).
Am also aware of the reasons for the "unexpected" stability of steel prices. One, of course, could argue that similar to late 19th century US tariff regimes, present ones accomplished exactly what the 19th century ones did - allow for growth and greater investment in the domestic sector.

BUT - my entire focus was on the again "unexpected" (love that word as it demonstrates the ignorance of so many free traders( and leftists in other areas)) consequences upon America's ability to a) project its power and influence, b) provide for its national defense and security and otherwise protect its economic interests.

While it may have appeared to be a screed on Free Trade (and it partly is) it may more properly be viewed as a screed against a willful loss of defense capabilities by those who primary objective appears to be cheaper consumer goods and a rigorous adherence to certain free trafr doctrines in spite of the consequent effects upon the nation.

I would love a world economic system of ZERO TARIFFS - but it ain't happening, it never has happened and it ain't never going to happen.

Why keep deluding ourselves into believing and acting as if the rest of the world was as conscious of Hayekian pedagogy as are our ecominc *experts* and those to whom the fruits of this voluntary "dissolution" of national strength and vitality accrue?

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gabe
on December 14, 2019 at 16:02:31 pm

Happily, some previous commenters have expressed my thoughts well. I come late to this article, because of the one by this author that I read yesterday in a Heritage post. I took issue with several statements by Dylan Pahman which led me to follow up by reading this one. Having lived along the Mexican border most of my life, I know whereof I speak. One quote, “Immigration is presumed to be largely harmful.”. This is a very deceptive comment since the U.S, has for decades admitted more legal immigrants (about a million a year) than any other nation on earth. Illegal immigration, the massive flows over our Southern border, is ptotally unsustainable. Another issue, the author who considers his liberal education to give him functional knowledge of economics, the family, etc. and admits to being an “academic” thinks he can tell the rest of us about the actualities of life as we commoners live it. He knows nothing about the sweat and tears of dry land farming, beekeeping, manufacturing jobs, all of which have been damaged or lost because of (one example) Chinese manipulations of markets and money. Free trade only works when there is FAIR trade. Trade that is more fair is being achieved by the street smart businessman Donald Trump for whom I voted and will vote for again. With our current national debt (doubled by the last president), something had to be done about the nearly trillion dollars of trade deficits we rack up every year. Pres. Trump know the “game”, and he is obtaining deals that are more fair for the U.S. This is happening in spite of the unbelievable pushback he receives every day!
Apropos of the later article on nationalism, I confess I am a Nationalist and just checked the definition to be sure I wasn't forgetting something! Too many are trying to change language and history for their own ivory tower purposes.

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Barbara Stockwell
on December 16, 2019 at 07:35:27 am

It’s telling that opponents of free enterprise and free markets systematically smear it as “dogma,” “faith,” and the like, and use anecdotes rather than careful analysis of data. They show little understanding of basics of accounting, math, or logic.

Trade raises incomes; it’s mutually beneficial. We know this because it’s voluntary. There, I’ve just lost all the mercantilist. They can’t imagine that human relations aren’t zero-sum.

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Charles N. Steele
on February 08, 2020 at 21:13:57 pm

Please explain why of two great US industries that led the world, the 19th and early 20th century giants of the US steel industry are at best shdows of their former selves, "as the economic misfortunes of US Steel evidence, for example., while the US oil industry's largest companies remain among their industry's leading world competitors.

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Micha Elyi
on February 08, 2020 at 21:17:36 pm

I'm so old that I can remember when Pat Buchanan feared Japanese economic nationalism. Then the Yamato economy was a threat no more and the US economy marched upward and onward. To deny or ignore this reality...

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Micha Elyi
on February 09, 2020 at 09:50:44 am

Conditions And Cultivation

Why Economic Nationalism Fails

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Conditions And Cultivation
on February 09, 2020 at 11:06:13 am

Corpus Hermetica

Why Economic Nationalism Fails

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Corpus Hermetica

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