Although my son, Thomas, is studying to be a computational astrophysicist, he’s also a naturally good economist. I love talking with him about economics; he helps me to sharpen my ideas and arguments. Earlier today he and I spoke on the telephone about so-called “economic nationalism” – a conversation that prompted the letter below.
Reflecting on our conversation earlier today, I have become quite unsatisfied with the term “economic nationalism” to describe either the philosophy that drives the likes of Trump’s protectionism or those protectionist policies themselves. My dissatisfaction springs from the fact that describing protectionists as “economic nationalists” seems to grant the protectionists’ conceit that their policies are indeed best for the nation – that their policies put the nation first – that their protectionist obstructions enrich the nation and serve the nation better than would a policy of free trade.
But of course this conceit is completely false. Protectionist policies damage the nation. These policies protect a handful of politically potent existing producers from having to best serve the interests of consumers in the nation. These policies are sand in the gears of economic competition and progress; they slow – and in some cases prevent altogether – resources in the nation from moving from less-valued uses to higher-valued uses. And protectionism diverts executive, managerial, and entrepreneurial talent away from activities that fuel economic growth and toward the seeking of special privileges from venal state officials.
So-called “economic nationalist” policies undermine the welfare of the nation; they make the people of the nation poorer; they choke and encumber the national market even as their champions, such as Trump, snooker the public into swallowing the fraudulent narrative that all these taxes and obstructions are in the national interest.
“Economic nationalism,” in short, is simply a set of crackpot ideas that delude people into believing that their economic self-immolation is really their economic salvation.