Economic nationalism, also called economic patriotism and economic populism, is 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. Economic nationalists oppose globalization or at least question the benefits of unrestricted free trade, favoring protectionism. To economic nationalists, markets are subordinate to the state, and should serve the interests of the state. 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. Economic nationalism tends to emphasize industrialization, 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.
History
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 Initiativemissile defense system, wrote, "Our common denominator is nationalism – both a military and economic patriotism – which inclines us to the side of pervasive national defense."
Modern examples
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:
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 Steve Bannon in the wake of the 2016 United States presidential election have been considered by some scholars and political commentators as a return to the economic nationalism of the Theodore Roosevelt Era.
Criticism
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 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.
