Economic nationalism is a concept that is based on state intervention. This ideology is also known as economic patriotism and shares many similarities with populism. This form of economics employs market policies that control the domestic economy. The labour and capital formation techniques used in economic nationalism involve the imposition and fair distribution of tariffs. Governments will impose restrictions on how society manages vital economic pillars. The transport, sale and purchase of labour, goods and capital form the core tools of economic nationalism. The fundamental principles of this ideology emphasize that the economy should support nationalistic ambitions. Economic nationalists firmly believe that global economic needs should not be put ahead of domestic interests. This philosophy actively contradicts the benefits of globalization and unrestricted free trade.
Economic nationalists generally favour protectionism. They argue that the country’s domestic markets must be supported until they reach a point of economic self-sufficiency. This group advocates for more significant state influence and assistance in managing domestic markets. Issues of national security and the military are paramount to protecting the country from foreign pressures. Mercantilism is often confused with economic nationalism. The two concepts are similar, although they are not the same. Economic nationalists often argue that international trade offers almost no benefits to domestic markets meaning there are no relative gains. Mercantilism doesn’t see free trade as zero-sum; instead, they believe there are mutual gains from increased international trade.
Industrialization is a crucial objective of economic nationalism. Building up a nation’s industrial capacity through the assistance of the state is a primary goal. Economic nationalists advocate for this because they argue there will be economic spillover effects on the economy. It also contributes to their overall goal of achieving economic self-sufficiency. Economic self-sufficiency is key to gaining political autonomy and increasing the nation’s military power.
Economic Nationalism Significance
Economic nationalism gained relevance because it is necessary to create, bolster and protect national economies. Domestic markets are often under siege from the larger competitors in the context of world markets. The state supports specific industries well, making it difficult for domestic markets to compete with their international rivals. The arrival of globalism brought the rise and institutionalization of economic nationalism. This ideology emerged to prominence in the 20th century. It gained momentum due to the ongoing financial crisis and was supported by nationalist movements.
Economic nationalism has long been an ideology that never truly faded away. In recent years, researchers have been noticing a surge in momentum. However, this may be due to the financial crash of 2011. Many countries have therefore imposed protective barriers to trade. These barriers were initiated because sovereign debt has caused domestic transactions to move into global markets. The global economy is very fragile and competitive. For businesses to successfully gain an edge they will need to understand the integration, complexity and extensity of joining this wheel. Many economies have implemented policies to protect them in case the world faces economic Armageddon.
This factor is significant because any turbulence that the world’s economy experiences has the power to affect almost every nation. The critical defence that countries have against this is economic nationalism. Governments will have to step in to prevent chronic levels of sovereign debt. Many scholars who are sceptical about economic nationalism know there will likely be greater economic nationalism if the world economy continues to struggle. To succeed in these areas, it is essential to plan, regulate and respect the financial functions of the various models found in global trade.
Economic National Policy is a statement that outlines the financial restrictions and broad principles to be applied to the economy. This document outlines the general course of action adopted by the national government. National policy is often crafted in response to a problem or pursuit of a specific economic objective. These policy directives are often where economic nationalism points are found. These decisions are made at the highest level and often represent the beliefs and ideologies of the politicians who made them.
Example of economic national policy includes trade restrictions, tariffs, import quotas, and subsidies. For example, a government may impose tariffs on imported goods to protect domestic industries and manufacturers of similar products. Subsidies are also an economic policy tool used to encourage businesses in certain industries or areas. This is done by providing financial support to these companies that then help them compete with foreign rivals.
Business nationalism comes from economic nationalism. Right-wing politicians in the U.S. often advocate for this ideology. It argues that a conservative approach to business and industrialism is key to protecting domestic financial sectors. These political leaders advocate for a national trade policy isolating foreign markets. This type of policy is confrontational for democrats who argue this goes against the central ethos of capitalism. The debate has caused a power struggle with international corporate interests. International conglomerates often possess significant resources making them highly influential within the political sector. Business nationalists have to compete with other groups to get their ideas accepted. To do this, they sometimes use populist rhetoric. This tactic has been key to achieving a more comprehensive range of support among the middle and working-class sectors of the economy.
Import Substitution Industrialization
Import substitution involves replacing imports with locally produced alternatives. Many domestic suppliers often turn to international suppliers due to their more attractive pricing models. Economic nationalists argue that it is necessary to implement trade and monetary policy to help make domestic markets more financially competitive. The key objective of this policy is to reduce foreign dependency through improved local production.
Economic nationalists argue that there is a need for the state to control the economic and social matters of its citizens. This advocacy is based on the premise that nation-building can be sabotaged by greedy corporates seeking cheaper imports.
Economic Nationalism Critique
Economic Nationalism has presented a challenge for citizens, as numerous locals favour domestic goods. This inclination to buy domestically-produced products has handed producers an unfair advantage in creating monopolies. With fewer choices available to them, local customers are all too vulnerable to exploitation from firms that take full advantage of this reality by driving prices higher in their pursuit of bigger profits.
Economic Nationalism is not a perfect solution, but it does have the potential to improve social and economic conditions in certain countries. It is important for governments to understand its implications and apply them thoughtfully when developing policy. By doing so, they can ensure that the policies are beneficial for their citizens and help create a better society for everyone. In the long run, Economic Nationalism can be a powerful tool to promote prosperity and social justice.