Economic nationalism

Economic nationalism or nationalist economics is an ideology that prioritizes state intervention in the economy, including policies like domestic control and the use of tariffs and restrictions on labor, goods, and capital movement. The core belief of economic nationalism is that the economy should serve nationalist goals. As a prominent modern ideology, economic nationalism stands in contrast to economic liberalism and economic socialism.

Economic nationalists oppose globalization and some question the benefits of unrestricted free trade. They favor protectionism and advocate for self-sufficiency. To economic nationalists, markets are to be subordinate to the state, and should serve the interests of the state (such as providing national security and accumulating military power). The doctrine of mercantilism is a prominent variant of economic nationalism. Economic nationalists tend to see international trade as zero-sum, where the goal is to derive relative gains (as opposed to mutual gains).

Economic nationalism tends to emphasize industrialization (and often aids industries with state support), due to beliefs that industry has positive spillover effects on the rest of the economy, enhances the self-sufficiency and political autonomy of the country, and is a crucial aspect in building military power.

While the coining of the term "economic patriotism" has been attributed to French parliamentarian Bernard Carayon, there is evidence that the phrase has been in use since earlier times to describe nationalist intervention by the state. In an early instance of its use, speechwriter William Safire in 1985, in defending President Reagan's proposal of the national Strategic Defense Initiative missile defense system, wrote, "Our common denominator is nationalism – both a military and economic patriotism – which inclines us to the side of pervasive national defense."

In the mid-to-late 1800s, Italian economic thinkers began to gravitate towards the theories of Friedrich List. Led by Italian economists like Alessandro Rossi, policies favoring nationalist protectionism of industries gained momentum. The Italian government had previously been ignoring Italian industry in favor of trade with France, and it seemed content to watch other European powers modernize and gain influence through their colonies. Various groups began to put pressure on the Italian government, from textile to ceramic manufacturers, and although the Italian government imposed tariffs the industrialists felt that it was not enough. The push for economic nationalism with industrialization and protectionism quickly spun Italy into an economic crisis in 1887, exposing Italian industrial woes.

The Austro-Hungarian empire’s ethnic diversity made it an unusual case of the rise of European nationalism. The fall of the Austro-Hungarian Empire, while mostly caused by the empire's defeat in World War I, was also caused by the lack of economic and political integration between Austrians and Slavs. Though Hungary relied on Austria economically, as it provided a market for Hungary's agriculture production, there was a deep social and economic rift between the Austrians and Slavic people, who actively boycotted and protested Austrian rule in favor of more autonomy in the Balkans. Regions within the empire began using forms of price discrimination to strengthen national economies. As a result, intra-empire trade began to fail. Grain prices fluctuated throughout the empire after the 1880s into World War I, however an ethnic breakdown of the empire showed that grain trade between two predominantly Austrian territories, or two predominantly Slavic territories, led to a gradual decrease in grain prices from the 1870s up to World War I. This was mainly due to the increased presence of railroads in the late 1800s. The only trade pairing that did not observe decreasing grain prices were two territories of varying nationality. Overall, grain prices were cheaper, and the price gap was smaller, when the two territories trading more closely resembled each other ethnically and linguistically.

At an economic summit in September 1974, one topic of discussion was the gradual dissolution of economic barriers to the movement of goods, people and services across borders in the post World War II era. According to William E. Simon, who was United States Treasury Secretary at that time, there was concern that inflation would motivate economic nationalism: "This has had enormously beneficial effect; Now, however, there is some danger that inflation may drive countries in economic nationalism."

The philosophical foundations of economic nationalism are difficult to trace due to the ideology's lengthy history and its unique appeal to different types of groups. The four general pillars come from its political, cultural, economic, and social roots. Though details surrounding these four pillars may differ depending on a nation's status, generally a nation's own status and economic stability takes precedence over another. During the late-19th and early-20th century this meant an emphasis on protectionism, increased role of the government, and even colonialism, as it was a means of modifying an occupied country's culture and creed.