- Why is economic nationalism making a comeback?
The reasons why I believe economic nationalism is making a comeback are because of several different factors. It starts out with all the criticism and frustration that’s around from both ends of the political spectrum. The left, which has historically opposed what it sees as the exploitation of low-income workers in developing countries, as well as the right, who are seen to be among those who stand to benefit the most from and support globalization, both waged attacks on the open world economy.
Both the left and right have strong criticisms, whether it is on the economic exploitation of workers, the lowering of job standards, or the wealth gap that continues to grow. On the opposite end of the scale, there has been much criticism about how an open international economy eliminates employment in such countries. They are losing their employment as factories relocate to cheaper areas and hire cheaper workers. This kind of critique has always existed, and for the greater part of a decade, economic nationalism was pushed to the sidelines as neoliberalism dominated the common agenda. When Trump arrived with his assault on free trade with China, things began to alter dramatically (Thomson, 2022).
Not too far away, Britain was witnessing the emergence of similar political beliefs as Brexit was pushed forward and had a successful referendum. Another eccentric outsider and a long-standing opponent of European integration, Nigel Farage, was able to merge people’s aversion to trade and immigration into a majority in favor of “regaining control” of the EU’s supranational governing institutions in Brussels (Thomson, 2022). The movement that Trump and Farage were both embracing was a new economic nationalism, one that prioritized national autonomy over individual or corporate economic self-interest by appealing to collective national identities.
This has also resulted in a rise in economic nationalism in other parts of the world as well like Eastern Europe. Nationalist policies are gaining more popularity in places like Hungary exemplified by Victor Orbán. Similarly in East Germany, there has been support for nationalist parties in opposition to European integration.
Ultimately for these developing worlds, especially for the ones in Europe, I believe it all comes down to autonomy and sovereignty. Many of the people nations are beginning to feel like their nation is not really their own, with immigrants flooding the country, jobs lowering, and the covid pandemic hitting, it all feels like things are too out of control and they do not have space where they can feel concerned for themselves by themselves. Decisions are being made by bodies that do not have their priorities aligned and want a degree of control back. Because of these reasons
Economic nationalism appears to be here to stay as six years after the decisive 2016 election there is little evidence of a return to neoliberal orthodoxies and economic globalization. Cultural politics and competing appeals to national identity have overtaken class politics.
- How fair is the global trading system?
There have been a lot of arguments about the fairness of the global trading system. Neoliberals argue that unequal global market outcomes are acceptable if equality of opportunity is maintained (which it isn’t, but that’s another topic). Others defend the global commercial system by stating that current imbalances are legitimate since they help the poor in general.
Issues always arise as nations try to negotiate with one another but often times there ends up being unequal trade agreements because of the inherent imbalance of power hence the imbalance in negotiating power. Such cooperation issues are normally handled by establishing common institutions that aid in the enforcement of agreements. This is how and why the WTO was established and is still relevant.
While the WTO has been successful in limited membership, ideas of reciprocity, and double-standardization in the application of WTO regulations and preferential status of less-developed countries (LDCs) (Broga, 2012).
For starters, developing countries argue that obtaining ‘Special and Differential (S&D)’ status in the World Trade Organization (WTO) through the US-implemented generalized system of preferences (GSP) system is not in their best interests. Furthermore, they argue that it is preferable to the needs of developed countries. Furthermore, in order to qualify for GSP and S&D, governments must liberalize and deregulate their economy (Broga, 2012). While affluent nations maintain their markets closed, the International Monetary Fund and the World Bank have pushed poor countries to open their markets at a breakneck pace, sometimes at the expense of underprivileged populations (Broga, 2012). MNCs from affluent nations, rather than national governments, frequently exploit the new vacuum area in the ‘confused’ country.
One example is how MNCs can move around their activities to a country that reduces their expense. Because nations can lose their GSP status they can move to a developing nation with more lenient tariffs placed on them for equity purposes and pass on their services as theirs avoiding what would have been more expenses for them while simultaneously taking away opportunities and exploitation. As a result, a free trade system permits multinational corporations and industrialized nations to take local production and exploit it for their own advantage.
There are many loops holes being used and nations as a whole are not going to be in agreement anytime soon. The current trading system is unfair, it is exploitative and it needs much improvement before we can confidently say it is doing us good.
- Can neoliberalism be reformed? If so, how?
Neo-liberalism is a political approach that favors free-market capitalism, deregulation, and reduction in government spending. In an ideal world, this would be a beneficial system where parts of the world with limited resources can have access to what our world can offer. History however has not been kind to many nations and has already placed them at a huge disadvantage over others.
In emerging nations for example neoliberalism is more harmful than good. Neoliberal policies encourage early privatization and opening up the market to foreigners when the country itself is completely unprepared to handle it and the governments lack the required resources to be regulating such activities. This major gap is not often taken seriously and its exploitative nature is a major flaw that needs reformation. WTO, for example, tries to address this imbalance, but it as an organization as mentioned in my previous answer has many flaws and loopholes that continue to allow such exploitative practices to continue.
Things are not better for developing countries as well. Many developing countries that ascribe to neo-liberalist thinking have liberalized and privatized their industries and are committed to minimizing interference from the government. The best example of this is the US which has gone so far as even privatizing its military. The kind of destruction that has caused for the world and for Americans themselves is unimaginable, going from country to country causing wars, massacres, and so on.
This damage to society that comes from privatization extends to healthcare as well. Think about the medical industry. The emphasis would move away from saving lives and toward profit if governments had little or no participation in healthcare and it was left to the market. Vital societal groups should never be left alone and should always be under close observation. Selfish profiteers take over the world with minimal effort. These standards are also used by multinational firms to crush any semblance of competition in developing nations. Developing nations are unable to give up control and let anybody into the market.
Given how there is little regulation, an unequal balance structure, and the archaic state of the international world, I am not too confident in what reforms there can be done towards neoliberal ideologies. I believe there needs to always be some degree of government involvement when it comes to industries in Medicine, food, and the Military. Industries that need to be regulated heavily to ensure social welfare. This sort of thinning is more in favor of socialist models than what neoliberalism envisions but it does seem like neoliberalism is not the best model for us.
Reference
Thomson, H. (2022, February 2). The Rise of Economic Nationalism Ushers In an Era of Uncertainty. Discourse; Discourse. https://www.discoursemagazine.com/politics/2022/02/02/the-rise-of-economic-nationalism-ushers-in-an-era-of-uncertainty/
Broga, D. (2012). Justice and Inequality in the World Trading System: A Critical Assesment. Inquiries Journal, 4(11). http://www.inquiriesjournal.com/articles/712/justice-and-inequality-in-the-world-trading-system-a-critical-assesment
Varga, M. (2020). The return of economic nationalism to East Central Europe: Right‐wing intellectual milieus and anti‐liberal resentment. Nations and Nationalism, 27(1), 206–222. https://doi.org/10.1111/nana.12660
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