Essay on Economic nationalism is a natural response to

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Essay on Economic nationalism is a natural response to the failures of liberalization. Discuss.

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Economic nationalism is a natural response to the failures of liberalization. Discuss.

Introduction

Globalization, which began in the 1990s, is characterized by a pattern of market deregulation and liberalization, the mobility of production components like capital and the reorganization of supply chains sped up by the development of transportation and communication technologies. This essay will argue that the rise of economic nationalism is again a response to the shortcomings of liberalization and globalization that disregarded the constraints of developing countries as well as the role of a government in ensuring the welfare of all of its citizens.

This paper will trace the development of economic nationalism and its growth from the 19th century period. Furthermore, this paper will analyze the competing theoretical paradigms of mercantilism and liberalism to understand the roots of economic nationalism. Additionally, this essay will further ponder the rationale behind the criticisms of liberalization in the 1990s to further evaluate the fallibilities of liberalization that pave the way for economic nationalism all over the world.

The evolution of economic nationalism

In the current global political economy, what type of threat does economic nationalism present to economic liberalism? According to conventional knowledge, economic nationalism is a deteriorated ideology in this era of economic liberalization and globalization. But this claim is based on interpretations of economic nationalism that are becoming more widespread and questioned by contemporary academic research. Many analysts have come to the conclusion that economic liberalism does not face any significant political threats as the dominant ideology in the formulation of international economic policy as a result of the failure of the Marxist political agenda in the former Soviet Union. However, during the 19th century, when economic liberals last had such a prominent position in world politics, they also faced opposition from economic nationalists.

Liberal economists typically used this phrase to criticize programmes they disagreed with. It evolved into "everything that did not fit in with the liberal definition of economy and development, usually conjured up in a doctrinaire manner" in the words of Jan Koffman (1990)(Helleiner, 2002). Both the left and the right are embracing economic nationalism after its expansion in the USA and Europe. New economic challenges are currently emerging, especially considering shifting power dynamics between developing India and China, two of the emerging world's largest economies, and the West. Besides, the most prominent of these is a simmering economic nationalism. Protectionism has fallen out of favor in the majority of Western nations since, in theory and frequently in practice, by the conclusion of World War Two. Economic openness has been at an all-time high over the past ten years(Isaac, n.d.). The widely held political interpretation of globalization has undoubtedly changed. The majority of today's leaders are aware that globalization has costs. It forces public officials to make decisions supporting or rejecting economic liberalization.

The West is one of the most visible examples of the rise of economic nationalism.Both admirers and detractors of Donald Trump have interpreted his victory as a sign of anguish over American liberalism's shortcomings. NAFTA, NATO, and the Paris Climate Agreement were among the contemporary liberal institutions that Trump's America First programme opposed. His electoral performance demonstrated how deeply uneasy the American electorate was about the benefits of such global collaboration(Thomson and Hechter, 2022). With rising nationalism and populism fears heightened by the development of right-wing groups like the National Rally in France and the AFD in Germany, Brexit has sparked concern throughout Europe about the eventual dissolution of the European Union(Pangle, 2019). Additionally, the prolonged migration issue has shown divisions inside the European Union, adding to concerns that the EU threatens independence and sovereignty.

In a theoretical prism

Economic nationalism, also known as "Mercantilism," tends to be a zero-sum game in the context of international relations theory. It is a strategy in which nations frequently engage in war and create policies that benefit them at the detriment of one or more other nations. Political and economic interdependence between nations is a win-win situation because both sides win in a world that is becoming more intertwined(Simons, 1933). The cooperation that was formed at Bretton Woods after World War II, where organizations like the IMF, WTO, and others built multilateral strategies to address world challenges , is, on the other hand, undermined by economic nationalism.

There were both losers and winners in international trade, despite the fact that the United States has supported economic liberalism as an ideology since World War II and that it maintains that trade benefits the economies and citizens of nations involved. The job of the government in economic liberalism is to establish and uphold the laws that keep international trade as free as possible, whereas the government's function in economic nationalism is to act to protect the domestic economy. In truth, economic liberalism holds that, to the extent that the government can restrain its meddling, international commerce will generally benefit all participating countries equally and produce a positive outcome(Abdulsattar, 2013).

Economic nationalism is currently on the ascendant, undermining the paradigm of economic liberalism and discouraging international collaboration on both the political and economic fronts. The establishments that have supported treaties between countries that consented to the principle of law, personal liberty, exchange rates, collection of taxes, social utilities supplied to underdeveloped nations. These balances of power have benefited when a government chooses to enhance the quality of life, create employment, and significantly improve their economic systems by deviating from agreements involving liberal policies.

Shortcomings of liberalization

Populist nationalism, authoritarianism, and state capitalism are all on the upswing as powerful challenges to liberal hegemony in various parts of the world. China offers an alternative economic structure that aims to gain access to global markets without completely opening up its economy. Moreover, economists call for the defense of regional autonomy against faceless, bureaucratic multinational organizations. Both the World Bank and the International Monetary Fund have been criticized for serving as platforms for neoliberal tyranny and capitalist exploitation. Whether they represent the left or the right, liberals are criticized for not being able to accept national sovereignty. Liberalism, on the other hand, is viewed as an essentially imperialist economic and political ideology that promotes the dissemination of its political ideals throughout the world by asserting that it is the only type of governance that is fair.

Most of all, the COVID-19 disease outbreak and growing geopolitical tensions between the United States, China, and Russia are raising the likelihood that economic nationalism will have a major effect on our world in the long term. The World Financial Crisis of 2007-2008 initially sparked interest in "economic nationalism" as a possibly dangerous and looming threat, but later as a danger that developed into a drawdown of economic systems from international markets. It can be seen that, in addition to some remarkable annual growth in the private sector in many Asian and Latin American countries, domestic market liberalization was encouraging more private sector activity. However, the increased freedom for entrepreneurial activity has also occasionally given rise to extortionate sale prices, gang activity, and social unrest. While domestic and international private businesses have contributed to the steady expansion of exports of emerging economies, trade liberalization has also resulted in the closure of numerous businesses(IMF, 2002). This also indicates that newly privatized or incorporated businesses have been encouraged to streamline their methods of production, but they have also had to lay off employees, which has led to an increase in the number of unemployed people in many nations(Juhasz, 2002). This includes both developed and underdeveloped countries.

Liberal reforms have been put into place in numerous nations within the framework of SAPs. While their stabilizing goals have made some progress, the continued low growth prospects have deterred capital investments in technology upgrading, infrastructure investments, and the development of new enterprise options. In many emerging nations, governmental spending cuts have precluded investment in the fundamental material, institutional, and mainstream scientific and technological structures, both local and foreign-owned, that businesses will need to compete economically. In fact, according to the African experience, some businesses may have refrained from investing in long-term restructuring efforts because they were too quickly exposed to trade rivalry. As a result, many companies lost their position on the global market and were devoured by foreign firms.  Due to inadequate producer adjustments to liberalization, challenges in changing public sector revenue structures, and a lack of appropriate external support, budget deficits have mostly been addressed through spending reductions. This caused a lack of public spending and a reduction in poverty alleviation methods, spurring inequality and social chaos. Because of this inequality and sociopolitical unrest, several countries have supported economic nationalism.Unemployment and inequality also rose, raising objections against migration and outsourcing. The liberal support for cosmopolitanism and multiculturalism is opposed to popular nationalism nowadays.

Conclusion

This essay argued that the defects of liberalization paved the way for economic nationalism to rise again. This reflects the different challenges it poses to the existing economic and political structure that is mostly western-centered. Even though liberalization brought tremendous technological advances, it failed to bring equitable development across the world, both in the developing and developed countries.

Reference list

Abdulsattar, T. (2013). Does Globalization Diminish the Importance of Nationalism? [online] E-International Relations. Available at: https://www.e-ir.info/2013/11/14/does-globalization-diminish-the-importance-of-nationalism/.

Engle, E. (2016). Trump’s Foreign Policy: Realist Economic Nationalism. Loyola University Chicago International Law Review, [online] 14(2), p.91. Available at: https://lawecommons.luc.edu/lucilr/vol14/iss2/2/ [Accessed 29 Oct. 2022].

Helleiner, E. (2002). Economic Nationalism as a Challenge to Economic Liberalism? Lessons from the 19th Century. International Studies Quarterly, 46(03), pp.307–329.

IMF (2002). Globalization: Threat or Opportunity? An IMF Issues Brief. [online] Imf.org. Available at: https://www.imf.org/external/np/exr/ib/2000/041200to.htm.

Isaac, A. (n.d.). ECONOMIC NATIONALISM OR PROGRESSIVE GLOBALISATION? The choice for modern government. [online] SMF. Available at: https://www.smf.co.uk/wp-content/uploads/2007/06/Publication-Economic-Nationalism-or-Progressive-Globalisation-The-choice-for-modern-government.pdf.

Juhasz, A. (2002). The Failure of Globalization. Cambridge Review of International Affairs, 15(3), pp.407–420.

Pangle, H. (2019). Liberalism and Nationalism. [online] Nationalaffairs.com. Available at: https://www.nationalaffairs.com/publications/detail/liberalism-and-nationalism.

Simons, H.C. (1933). Mercantilism as Liberalism. Journal of Political Economy, 41(4), pp.548–551.

Thomson, H. and Hechter, M. (2022). The Rise of Economic Nationalism Ushers In an Era of Uncertainty. [online] Discourse. Available at: https://www.discoursemagazine.com/politics/2022/02/02/the-rise-of-economic-nationalism-ushers-in-an-era-of-uncertainty/ [Accessed 29 Oct. 2022].

Woo, K. (n.d.). Economic Nationalism and Liberalism: realities in the global political economy - International Affairs Forum. [online] www.ia-forum.org. Available at: https://www.ia-forum.org/Content/ViewInternal_Document.cfm?contenttype_id=0&ContentID=8757.

Essay on Economic nationalism is a natural response to the failures of liberalization. Discuss.

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