Economic nationalism, or economic patriotism, economic populism, refers to an ideology that favors state interventionism over other market mechanisms, with policies such as domestic control of the economy, labor, and capital formation, even if this requires the imposition of tariffs and other restrictions on the movement of labor, goods and capital. In many cases, economic nationalists oppose globalization or at least question the benefits of unrestricted free trade. Economic nationalism is disputed as the doctrine of mercantilism, and as such favors protectionism.
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. In an early instance of its use, William Safire in 1985, in defending President Reagan’s proposal of the 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.”
As a policy is a deliberate system of principles to guide decisions and achieve rational outcomes, the following list of would be examples of an economic nationalistic policy, were there a consistent and rational doctrine associated with each individual protectionist measure:
- Proposed takeover of Arcelor (Spain, France and Luxembourg) by Mittal Steel Company (India)
- French governmental listing of Danone (France) as a ‘strategic industry’ to pre-empt a potential takeover bid by PepsiCo (USA)
- Blocked takeover of Autostrade, an Italian toll-road operator by the Spanish company Abertis
- Proposed takeover of Endesa (Spain) by E.ON (Germany), and the counter-bid by Gas Natural (Spain)
- Proposed takeover of Suez (France) by Enel (Italy), and the counter-bid by Gaz de France (France)
- United States Congressional opposition to the takeover bid for Unocal (USA) by CNOOC (PR China), and the subsequent takeover by Chevron (USA)
- Political opposition in 2006 to sell port management businesses in six major U.S. seaports to Dubai Ports World based in the United Arab Emirates
- Limits on foreign participation and ownership in Russia’s natural resource sectors and selected Russian industries, beginning in 2008
The reason for a policy of economic protectionism in the cases above varied from bid to bid. In the case of Mittal’s bid for Arcelor, the primary concerns involved job security for the Arcelor employees based in France and Luxembourg. The cases of French Suez and Spanish Endesa involved the desire for respective European governments to create a ‘national champion’ capable of competing at both a European and global level. Both the French and US government used national security as the reason for opposing takeovers of Danone, Unocal, and the bid by DP World for 6 US ports. In none of the examples given above was the original bid deemed to be against the interests of competition. In many cases the shareholders supported the foreign bid. For instance in France after the bid for Suez by Enel was counteracted by the French public energy and gas company Gaz De France the shareholders of Suez complained and the unions of Gaz De France were in an uproar because of the privatization of their jobs.
More recently, the economic policies advocated by Donald Trump and (formerly) Steve Bannon in the wake of the 2016 United States presidential election have been considered by some as a (partial) return to the economic nationalism of the Theodore Roosevelt Era.
Consumer preference for local goods gives local producers monopoly power, affording them the ability to lift prices to extract greater profits. Firms that produce locally produced goods can charge a premium for that good. Consumers who favor products by local producers may end up being exploited by profit-maximizing local producers. For example; a protectionist policy in America placed tariffs on foreign cars, giving local producers (Ford and GM market) market power that allowed them to raise the price of cars, which negatively affected American consumers who faced fewer choices and higher prices. Locally produced goods can attract a premium if consumers show a preference towards it, so firms have an incentive to pass foreign goods off as local goods if foreign goods have cheaper costs of production than local goods.
- ^ Jump up to:ab “French economic nationalism: Colbert was here”. The Economist. 23 March 2006. Retrieved 22 May 2018.
- ^Callaghan, Helen; Lagneau-Ymonet, Paul (December 2010). “The Phantom of Palais Brongniart: “Economic Patriotism” and the Paris Stock Exchange” (PDF). MPIfG Discussion Paper 10/14: 6.
- ^Bump, Philip (17 July 2014). “‘Economic patriotism’: Explaining the vague, finger-wagging, immortal phrase”. The Washington Post. Retrieved 24 May 2018.
- ^Safire, William (19 September 1985). “The Year of Dee-fense”. The New York Times. Retrieved 24 May 2018.
- ^Capron, Laurence; Guillén, Mauro (12 October 2006). “Fighting economic nationalism in deals”. Financial Times. Retrieved 22 May 2018.
- ^“Europe’s nascent merger boom”. The Economist. 1 September 2005. Retrieved 22 May 2018.
- ^“Don’t take the high roads”. The Economist. 7 August 2006. Retrieved 22 May 2018.
- ^“To the barricades”. The Economist. 2 March 2006. Retrieved 22 May 2018.
- ^“From Karl Marx’s copybook”. The Economist. 2 March 2006. Retrieved 22 May 2018.
- ^ Jump up to:ab Imad Moosa (1 January 2012). The US-China Trade Dispute: Facts, Figures and Myths. Edward Elgar Publishing. p. 62. ISBN 978-1-78100-155-4.
- ^Liuhto, Kari (March 2008). “Genesis of Economic Nationalism in Russia” (PDF). University of Turku. Archived from the original (PDF) on 23 May 2018. Retrieved 23 May2018.
- ^Rutland, Peter (2016). “The place of economics in Russian national identity debates”. In Pål Kolstø; Helge Blakkisrud (eds.). The New Russian Nationalism: Imperialism, Ethnicity and Authoritarianism 2000–2015. Edinburgh University Press. p. 348. ISBN 978-1-4744-1042-7. JSTOR 10.3366/j.ctt1bh2kk5.19.
- ^ Nicolas J. Firzli : ‘Understanding Trumponomics’, Revue Analyse Financière, 26 January 2017 – Supplement to Issue N°62
- ^Hartwell, Christopher (11 April 2017). “What Trump has really learned from Russia”. Financial Times. Retrieved 23 May 2018.
- ^ Jump up to:ab Harry Binswanger (5 September 2003). “‘Buy American’ is UN-American”. Capitalism Magazine. Retrieved 17 April 2012.
- ^Daniel J. Ikenson (6 July 2003). “The Big Three’s Shameful Secret”. The Cato Institute. Retrieved 17 April 2012.
Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder TBIL.co STATX Fund.