Today we come to one of the core elements of Economic Nationalism, which is not the economics, but the Nationalism.
In practice, this leads directly to economics as well. Why are America and Canada the only wealthy countries in all of the Americas? It has something to do with their British heritage, which has led to certain political outcomes, which in turn lead to economic policy.
I have put off writing this item for a while, because it is hard to express properly the idea of the Nation, and what it means for human social organization. Here’s a description of Aristotle’s idea of the “philia”:
I will have to collect some better and additional examples to this over time, perhaps from the writings of Ibn Khaldun, Arnold Toynbee, or John Glubb.
Here is Glubb’s description of the early stages of National success:
The characteristics of the Nation are a combination of enough similarity of thought and background (and language, religion and so forth) that a group of people can effectively work together to achieve some kind of positive outcome for the group. Any short reading of the Founders of the United States shows how rare and precarious good government is.
Glubb then goes to show why empires (and nations) decline:
Here’s the “Tytler Cycle”:
Note again that success begins, and is sustained, by “Unity and Deep Moral Groundings.”
I am sure that someone else can express these concepts better than I am doing here. Anyway, the result of all this, over a period of many centuries, was the idea of the “Nation-State.” In other words, State boundaries and jurisdictions should be defined by, and separated by, Nations.
Against the “Nation State,” we can contrast several other common situations:
The Multi-State Nation, such as Germany before 1871. One nation riven into many different governments.
The Multi-National State, such as Iraq, containing Sunnis, Shiites, and Kurds; or India before the creation of Pakistan in 1947, which had a combination of Muslims and Hindus.
Empire, such as the British in India (or the Muslims in India before the British), or the Mongols in China, where one Nation (the Hindus) is ruled by a distinctly separate Nationality. (Muslims were in India because they invaded and conquered India from Uzbekistan.)
All of this led to centuries of conflict, which is why the Nation State is the principle upon which the whole world was organized during the 20th century, dissolving overt empires, and which still continues today.
Of course there are those who wish to create dissention, and dissolve national unity, mostly so that people can be more easily ruled by others. The British division of the Middle East in the Sykes-Picot Agreement, or the Kalergi Plan, are examples of this principle.
All of this should serve as encouragement to maintain national unity by limiting, rather severely, immigration from other races and nationalities. This used to be a simple principle of government. Historically, in the last two hundred years, the primary impetus for immigration was cheap labor. Black slaves were imported from Africa for cheap labor, and also because they were more immune to tropical diseases than the equally-cheap laborers from Scotland that had a bad habit of dying in less than twelve months when brought to the disease-ridden American South. And how is that working out? (The laborers imported from Scotland were also slaves, or “indentured servants” as they were known, typically for seven years.)
For the first hundred years or so of US history, 1790-1890, immigration was mostly limited to Canada, England, Scotland, and Ireland, with Germans the largest non-English speaking group. After 1890, Italians, Poles and Russians became more common. Although these were all White European Christians, nevertheless there was concern that the introduction of people from Germany, Italy, France, Poland or Russia, that had lived for centuries under oppressive monarchical governments and had no direct experience or education in the principles of Freedom and Liberty that animated the American Experiment, would lead to a deterioration of the Constitutional order and a turn toward big-government tyranny.
Today, we commonly scoff at such concerns, and can hardly believe that people were once so critical of Germans or Italians. But, what indeed happened, during and immediately after that inrush of foreigners, was a turn toward big-government tyranny. You can trace this to the 1890s, the decade that introduced the first peacetime Income Tax (in 1895), and which was also marred by repeated attempts to devalue the currency (“free coinage of silver”). Currency debasement was common in Europe. Britain and America were unusual examples of currency discipline.
They also brought with the all kinds of Socialist tendencies, which later erupted into a Communist Revolution in Russia only a few years later.
And what happened in the US? An explosion of big-government socialism, beginning with the Income Tax in 1913, and of course the Federal Reserve which was immediately pressed to debase the currency during World War I.
In a similar way, I often say that our politics is “becoming more Latin American,” displaying the kinds of features that have led to a century of stagnation, mediocrity and periodic crisis for every country south of Texas. The per-capita GDP of Mexico today, as a percentage of US per-capita GDP, is no different than in 1960. Not much “emerging” going on. Certainly one reason for the “Latinization” of our politics is that we have a lot more Latinos in the US now than in the past, the consequences of the Immigration Act of 1965 and the illegal immigration wave that followed.
Mexico has been sitting there south of Texas since the days of George Washington, and it was always highly populated even in the pre-Columbian period. Much of the United States, in 1850 when this chart begins, was literally Mexico a decade earlier. (Almost nobody lived there.) But, a significant Hispanic population in the US is a new thing.
Despite endless propaganda to the contrary, a country does not need immigration to succeed. Some of the biggest success stories of the past two centuries — including Britain and Japan — had almost no immigration.
Ireland was part of Great Britain — it was literally the same country — until 1921.
In 1900, only 1.5% of the population of Britain was foreign-born, just as was mostly the case in the US at the same time. Britain at this time ruled about a quarter of the world’s population. But, perhaps one reason why Britain was so successful during the 19th century was that, although it extended it reach throughout the world, it did not have an “influx of foreigners” as a consequence, as Glubb describes, and which was certainly part of the decline of multi-ethnic Ancient Rome.
In total, over 145 years, Britain had average immigration of about 16,000 people per year; and if we exclude Irish, the number is 5,786 per year. Despite strangely multi-ethnic historical dramas recently produced by the BBC, the total African immigration is estimated at 69 people per year over that time period.
This leads directly to the question of Immigration, typically a main interest of the Economic Nationalists. To summarize for today, I see no reason for it. The main reason for it is cheap labor. The result is that an immigrant perhaps makes more than they would if they had stayed home (since this is the main impetus for immigration), with the inevitable consequence than a native American makes less. There are a few people that argue that immigrants contribute to innovation and business entrepreneurialism. Certainly the upper ranks of Silicon Valley today have a notable share of immigrants. However, the United States was also the growth and innovation capital of the whole world, when immigration was highly restricted.
What about Trade? Can we make an argument for restricted trade (perhaps a universal Tariff), on the basis of National Unity, beyond what we have done already? There is considerable history of this throughout the twentieth century. Commonly, this takes the form of some kind of restrictions on foreign ownership of assets, including land and real estate, and also, majority shareholdings of major companies. Many countries have today, or have had in the past, strict limitations on foreign ownership of corporations. Thailand does today; Indonesia used to, until it was strongarmed by the IMF. Japan had an effective limit on foreign control, in the form of the “cross-shareholdings” that were instituted in the 1960s specifically to block foreign control.
I see no particular problem with this. All of these countries have been successful, with these limitations on foreign control, and perhaps in part because of them. The general pattern of economic success is that it is primarily domestic. Domestic companies, domestically owned, domestically financed by domestic banks, and managed by the natives of the country. This has been the case for Japan, South Korea, China, Taiwan, Thailand and Malaysia — although Malaysians argue that the ethnic Chinese that are prominent in business in Malaysia are not really Malaysians. This was also true, of course, for Britain and the United States.
I think you can make an argument for a certain amount of “economic self-sufficiency,” particularly in agriculture (to the extent possible), as a way of maintaining political sovereignty and basically reducing geopolitical risks. The United States should not be dependent on other countries for basic electronics production, or a hundred other examples that recur when Free Trade leads to a natural pattern of Specialization. The smaller a country is, the more it must rely on Trade for all the products of the modern age; but also, the larger a country is, the more it has the potential to produce these domestically.
There is a lot more to say, about questions of Nationalism, and probably better ways to say it. I will return to this topic in the future, and hopefully build up enough material that it can later be sifted and purified into a more coherent statement.
