In academic discourse, the wave of interest in nationalism peaked in the 1990s with works by historians Ernest Gellner, Eric Hobsbawm, Anthony Smith, Benedict Anderson, and Rogers Brubaker. Currently, nationalism frequently appears in public discourse as a pejorative term to describe attitudes of national egoism synonymous with xenophobia, contempt for the national and ethnic other that ultimately leads to conflict, violence, and war. Economic nationalism with protectionism of national manufacturing and employment with high tariffs for imported goods and migrant labor force restrictions became a staple of Donald Trump's policies toward China and Brexit. Yet, or perhaps because of the heated political atmosphere in which the term “nationalism” appears, the academic fashions seem to have moved away from it. The volume Nationalism and Economy comes therefore as a much needed collection of essays by economists, historians, and international business relations specialists from universities in Germany, Hungary, the Netherlands, Slovenia, Austria, Sweden, the United States, and Israel. They cover a variety of issues from history of historiography of nationalism to business strategies of national branding. The eight authors take positions on the past and present development of economic nationalism in Europe, the US, Israel, and China.
In this featured review, I focus on the essays that deal with economic nationalism as a response to the country's relative backwardness. There are several essays in the volume that deal with economic nationalism as either a set of economic and social policies or ideology of backward nations. This distinction, although with different terminology, is emphasized by Stefan Berger of Ruhr University in Bochum, Germany in the opening essay “Historians, Nationalism Studies, and the Economy”; Harold James of Princeton University in his essay “Visions of Europe: European Integration and its Origins in Nineteenth Century Economic Thinking About Nation-Building”; Andreas Etges from Ludwig-Maximilians University in Munich in his “Theoretical and Historical Reflections on Economic Nationalism in Germany and the United States in the Nineteenth and Early Twentieth Centuries”; and especially by and Thomas Fetzer of Central European University in his essay “Nationalism in Political Economy Scholarship.” I follow this important distinction in my further arguments.
On the one hand, economic nationalism can be approached as a set of policies designed to overcome the country's backwardness and improve its position in the international economic order. In particular, such policies have historically been crafted in order to not only catch up with but also challenge the countries dominating the world in a given historical era, be it Great Britain in the eighteenth and nineteenth centuries and the US in the post-World War II era. This is an area of expertise by economists, political scientists, and specialists in international relations. The term has often been used as a synonym for economic protectionism, including high tariffs for imported goods; mercantilism and neo-mercantilism understood as a governmental attempt at accumulating monetary resources, “trade restrictions in order to have positive balance of trade” (Etges, 88), but also governmental encouragement of manufacturing, increase of population, and centralization of the economy (Etges, 88), as well as governmental “control over the exploitation of minerals and other natural resources” (Berger and Fetzer, 2), import substitution, and economic self-reliance.
On the other hand, nationalism has also been performed as an ideology that is a set of moral and esthetic ideals that provides a large group with common identity and legitimizes its social stratification and political order. Economic nationalism, like other competing ideologies including socialism and communism, served as a platform of collective mobilization of effort and sacrifice for the purpose of development. Again, historically this ideology has been more pronounced in and by the aspiring backward nations on their road to challenge the global order. This approach to economic nationalism is characteristic for historians, including historians of thought that often recruit from among philosophers and sociologists. The works of Liah Greenfeld (1992) are rightfully mentioned in this context as especially revealing.
It has been the German development of the last 200 years that has served as a prototype of the benefits and dangers of economic nationalism understood both as a set of policies aimed at increasing the country's international economic competition, and the ideology of popular mobilization for the modernization effort. Four essays in the volume extensively discuss the German case (Harold James, Andreas Etges, Hagen Schulz-Forberg, and Thomas Fetzer in his two essays), while all others refer to the German model while dealing with such different issues as historiography, Israeli land policies, Yugoslav redistribution, division of labor schemes as a an expression of Serbian nationalism, interwar Romanian welfare provisions, foreign direct investment (FDI) in east central Europe after 1989, Chinese diasporic policies for economic advancements, and the role of internal consumption and nation branding in international trade.
The essays interestingly discuss the German roots of economic nationalism understood as a set of governmental policies aimed at overcoming backwardness and challenging the international economic order. Etges demonstrates how German economic nationalism understood as a set of policies promoting economic development and challenging Britain's domination manifested itself first in the form of the unification efforts in the mid-nineteenth century. The economic rationale for it was for the industrialized north to defeat and incorporate the rural south into a common German market and monetary unity. After unification in 1871, more aggressive policies were aimed at boosting the German position in international economic competition and challenging the position of Britain, the industrial superpower. In the late nineteenth century, the governmental incentives to German manufacturing and export included public investments in infrastructure, high tariffs for imported goods, support for business organizations and agricultural cooperatives (Etges, 92–93), as well as social provisions for the lower classes that increased internal consumption. Friedrich List's “infant-industry argument” of 1841 was applied “as existing international economic structures perpetuated the status of agricultural countries as backward peripheries” (Fetzer, 45), while domestic industry had to be supported by public infrastructure and tariffs. James convincingly argues that at this stage Alfred Krupp, the most successful businessman in Prussia, became a symbol of the new Germany (James, 71) and its industrial power—a symbol useful for the increase of both internal and external sales.
The imperialist and Nazi period of German history is not covered in details by any of the essays published in the volume. Yet it would be very interesting to look at German nationalism in the first half of the twentieth century from the point of view of economic development and competition with Britain and the rising United States. James points out also that in the post-World War II period, “the legacy of thinking about political existence primarily in terms of economic consequences or outcomes was powerfully visible in the history of … the Federal Republic of Germany” (James, 73) and Germany's place in the European Union. He further discusses the economic rationale for the 1989–90 German unification and introduction of the euro. The essay ends with a critique of the two opposite interpretations of the German switch from the mark to the euro. He presents what he calls “the virtuous German story” as act of German economic sacrifice “needed to stop the recurrence of war between France and Germany” (James, 80). On the other hand, the “the vicious Germany” story presents Germany as a main beneficiary of the Eurozone: “Since Germany had lower rates of wage inflation than France and much lower rates than the Mediterranean countries, a locked currency would guarantee increased export surpluses” (James, 81) of mostly German products to the rest of the world. In this interpretation, popularized in Britain, German nationalism in a purely economic form would achieve what military efforts did not in the past. James convincingly argues that both interpretations are wrong and yet does not clearly present the one he considers right.
The essays also touch upon nationalism as “ideology of industrialization to overcome relative backwardness” (Etges, 89) as recognized by Alexander Gerschenkron and Simon Kuznets. Gerschenkron has argued, as Fetzer reminds us, that “industrialization in ‘backward’ areas differed from advanced countries not only because of the greater role played by state, but also because of differences in what he … called ‘intellectual climate,’ ‘spirit’ or ‘ideology’ … or ‘new deal of emotions’ that helped to endure transformation sacrifices and retain faith in a better future” (Fetzer, 52). Kuznets additionally observed that nationalism as a part of the popular imagination and a source of identity “mitigate[s] the inevitable interests/conflicts that accompany the transition from agricultural to industrial societies” (Fetzer, 53). Witold Kula, a Polish economic historian, analyzing German and Japanese industrialization, spoke about nationalism as an ideology also as a false consciousness that diverted attention and sentiment away from actual class conflict and directed it to ethnic and racial ones (Sosnowska, 2019). Nineteenth-century Germany was, again, a prototype of how nationalism in its variety of forms, from symbolic to militant, can be used to mobilize all social classes toward the struggle for economic development. Greenfeld's characterization of Germany's nineteenth century road to modernity as “driven by ressentiment and hatred of the West” (395), and its nationalism as a response to its sense of inferiority and desire to challenge the economically dominant nations (Greenfeld, 374) could be applied to ideologies in subsequent backward but aspiring countries.
The volume gives a good overview of historical and economic thought related to economic nationalism. It interestingly highlights the German nineteenth century experience as a model of both policies promoting economic growth for the increased international economic competition and ideology legitimizing the lower classes’ sacrifices that accompany this growth. In the numerous case studies from past and present Europe, the US, Israel, and China, the unifying and most revealing element is the similarity of policy- and ideology-related dilemmas that Germany underwent in the nineteenth century. These case studies demonstrate the importance of the German model, sometimes without acknowledging it, while discussing land, population, and diaspora policies, attitudes toward foreign investment capital, national branding in export promotion, and consumption and welfare policies in various developing countries. The collection would be richer if the cases of Japan and South Korea had been included.
