Doing Economic Nationalism the Right Way
Not every departure from economic liberalism is as ill-advised as its advocates would have us believe. East Asia's experience suggests that if America's latest foray into economic nationalism remains focused on creating a strong, inclusive domestic economy, it will do much good for the rest of the world.
CAMBRIDGE – With the United States leading the way, the world seems to be entering a new era of economic nationalism, as many countries prioritize their domestic social, economic, and environmental agendas over free trade and multilateralism. While President Joe Biden’s approach is more measured and open to international cooperation than Donald Trump’s was, it nonetheless raises concerns among economic liberals, who see echoes of a 1930s-style return to protectionism and autarky.
But “economic nationalism” is one of those scare terms that economic liberals use to discredit practices they don’t like. As with any ideologically loaded label, it hides more than it reveals. After all, economic nationalism comes in many different forms, some harmful and some beneficial. Moreover, some of the leading theorists of economic nationalism, such as Alexander Hamilton and Friedrich List, were political liberals.
Though economic nationalism can backfire when taken to extremes, so can economic liberalism. When applied judiciously in pursuit of legitimate domestic goals – such as building economic strength and reinforcing a sense of national purpose – it can be beneficial without necessarily harming other countries.