112 results
5 - Battleground WTO
- Kenneth A. Reinert, George Mason University, Virginia
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- The Lure of Economic Nationalism
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Summary
The WTO sits on the edge of Lake Geneva in a building that once housed the International Labor Organization and the United Nations High Commissioner of Refugees (UNHCR). We said a few words about it in Chapter 1. It has the distinction of coming under criticism from all points along the political spectrum. This criticism began with the political left in the 1990s who were outraged by certain rulings that affected environmental policies and spread to labor interests who were concerned about trade and wages in manufacturing. It has now moved to the political right in the form of new economic nationalists who, at times, appear to be bent on destroying the institution and its rules-based global trading regime.
Few WTO critics take the time to try to understand it. Despite many flaws, it is an international trade institution that embodies the important principle of multilateralism. As such, it is a response to the tendency toward zero-sum thinking and distributive bargaining discussed in the preceding chapter. What exactly is multilateralism? International relations scholar John Ruggie emphasizes that “multilateralism refers to coordinating relations among three or more states in accordance with certain principles.” Understanding these principles is important.
In his investigation of multilateralism, Ruggie begins with Nazi Germany and Albert Hirschman's National Power and the Structure of Foreign Trade discussed in Chapter 1. He emphasizes that the trade relations pursued by the Nazi government were bilateralist. Here is his description:
The essence of the German international trade regime was that the state negotiated “reciprocal” agreements with its foreign trading partners. These negotiations determined which goods and services were to be exchanged, their quantities, and their price. Often, Germany deliberately imported more from its partners than it exported to them. But it required that its trading partners liquidate their claims on Germany by reinvesting there or by purchasing deliberately overpriced German goods. Thus, its trading partners were doubly dependent on Germany.
This is not multilateralism. In the WTO, any bilateral agreement on trade in a particular good is generalized to all members through what is known as the most-favored nation (MFN) principle. If Japan lowers a tariff on Indonesia's exports of lumber, it must also lower its tariff on the exports of lumber from all other member countries. MFN is a core principle of multilateralism that allows countries to escape the confines of bilateralism.
9 - Techno-Nationalism
- Kenneth A. Reinert, George Mason University, Virginia
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- The Lure of Economic Nationalism
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- 01 August 2023, pp 137-156
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Summary
In August 2021, Lee Jae-yong was released on parole from prison in South Korea where he had been held on a bribery conviction. The Korean government cited overcrowded prison conditions when announcing his release, but Lee was no ordinary prisoner. He was the vice-chairman of Samsung Electronics and the son of Samsung's founder, Lee Kun-hee. Despite an official five-year ban on employment, as soon as he was released, Lee went directly to the Samsung's headquarters for a briefing, and deploying an interesting ambiguity, Samsung considered him to have resumed work despite not being employed.
At the time, the world was experiencing a shortage of semiconductor chips. Perhaps not coincidentally, Samsung was one of the three largest chipmakers, the other two being the US-based Intel and the Taiwan Semiconductor Manufacturing Company (TSMC). Indeed, the South Korean president justified Mr. Lee's release as a matter of national interest. Half of the world's chipmaking or “foundry” capacity resided with TSMC, and Taiwan was experiencing what could politely be called “political risk” given China's stated goal of reintegrating it back into the Communist fold. Indeed, almost exactly a year later, Chinese forces surrounded Taiwan in a four-day military exercise that interrupted trade.
Samsung's potential to offset this kind of risk was a topic of discussion in the business world, and firms relying on TSMC chips were looking for ways to diversify their chip sourcing. More generally, Samsung and Mr. Lee were caught in the crosswinds of evolving techno-nationalism. China is one of the world's biggest demanders of chips, and Samsung operates in China to help to satisfy this demand. At the same time, the US government is keen to ramp up semiconductor manufacturing capacity in the United States, and Samsung has agreed to be part of that effort as well. We need to consider rival techno-nationalist regimes, as well as the very concept of techno-nationalism, to understand these dynamics.
The Emergence of Techno-Nationalism
As we saw in Chapter 3 on industry and war, techno-nationalism as a feature of economic nationalism is nothing new. It was part of List's “productive power” project that was embraced by Japan in the late nineteenth century. As for the contemporary use of the term, legal scholar Robert Reich played an important role in a 1987 article.
Frontmatter
- Kenneth A. Reinert, George Mason University, Virginia
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- The Lure of Economic Nationalism
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Contents
- Kenneth A. Reinert, George Mason University, Virginia
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8 - Pandemic Nationalism
- Kenneth A. Reinert, George Mason University, Virginia
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- The Lure of Economic Nationalism
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- 01 August 2023, pp 117-136
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Summary
On 5 October 2020, US president Donald Trump appeared on the Truman Balcony of the White House. Days before, he had tested positive for COVID-19 as had many other individuals who had attended recent White House functions. On the balcony, he extoled his own leadership and strength. Many likened this event to Evita Peron's similar appearance on a balcony of the Casa Rosada in Buenos Aires on another October day in 1951 when she gave her final speech to supporters in the Plaza de Mayo. Given President Trump's COVID-19 status, and his checkered approach to combating the pandemic, critics dubbed this his Covita moment, and it was indeed emblematic of his administration and its approach to the pandemic.
The COVID-19 pandemic changed the world in many ways. For starters, it impacted growth, employment, investment and trade. The World Bank suggested that the pandemic-induced recession was the worst since World War II. It was more pronounced than the recessions of 1975, 1982 and 1991. In some respects, it even overshadowed even the global financial crisis of 2009. What is more, because the pandemic undermined several important growth factors, the recessionary effects were likely to be long term, particularly given the continued emergence of new variants, including Delta and Omicron.
In 2020, Carmen Reinhart and Vincent Reinhart put it this way:
The shared nature of this shock—the novel coronavirus does not respect national borders—has put a larger proportion of the global community in recession than at any other time since the Great Depression. As a result, the recovery will not be as robust or rapid as the downturn. And ultimately, the fiscal and monetary policies used to combat the contraction will mitigate, rather than eliminate, the economic losses, leaving an extended stretch of time before the global economy claws back to where it was at the start of 2020.
Despite these dire economic conditions, some economic nationalists saw the pandemic as an occasion to further their cause. For example, as the deaths from COVID-19 reached 100,000 in the United States, US trade representative Robert Lighthizer referred to the pandemic as an opportunity to reshape trade relations and had the audacity to refer to these trade relations (and not the pandemic) as a “disease.”
Preface
- Kenneth A. Reinert, George Mason University, Virginia
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- The Lure of Economic Nationalism
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Summary
In 2014, I began to write a book entitled No Small Hope about the universal provision of basic goods and services, drawing upon economics, ethics and human rights theory. In the middle of this project, the world began to shift. In 2016, the United Kingdom voted to leave the European Union and Donald Trump was elected president of the United States. Both these developments reflected economic nationalist and ethnonationalist political platforms. In 2018, I presented the No Small Hope book at the World Trade Organization's annual public forum. This was somewhat ironic because President Trump was beginning a full-scale assault on that institution, attempting to hobble the multilateral trading system he loathed.
About a year later, COVID-19 appeared on the global scene, setting off further expressions of economic nationalism, exacerbating an already fraught US–China relationship, and causing 15 million excess deaths worldwide. In the United Kingdom, Boris Johnson was “getting Brexit done,” while Indian prime minister Narendra Modi was ramping up his ethnonationalist Hindutva movement. During 2020 and 2021, the pandemic ravaged the world, fraying economic relations. In January 2021, US president Trump attempted to overthrow the country's electoral process while Brexit came into effect. A little over a year later, Russia invaded Ukraine in another ill-considered nationalist spasm.
Whereas No Small Hope was a statement of what could be, this book is a statement of what is, and it is decidedly less hopeful. The main message is that economic nationalism is often a recipe for worsened economic welfare, strained international relations, enflamed ethnic tensions, global public health setbacks and reduced effective innovation. Behind economic nationalism lies a zero-sum mindset that misapprehends many realities and thereby sets back the important project of human flourishing. This zero-sum mindset, however, is an ever-tempting default that must be overcome for continued forward progress. This book argues that we must resist its lure and recognize the possibility of non-zero-sum outcomes as embedded in the principle of multilateralism. This lesson was painfully learned after World War II and unfortunately needs to be learned again.
Some small fragments of this book were published in editorial form in the US-based The Hill, and I would like to thank The Hill's Daniel Allott for his support in that process.
References
- Kenneth A. Reinert, George Mason University, Virginia
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Index
- Kenneth A. Reinert, George Mason University, Virginia
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Afterword
- Kenneth A. Reinert, George Mason University, Virginia
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Summary
As this book went into production in March 2023, Chinese president Xi Jinping met with Russian president Vladimir Putin in Moscow. The Chinese Ministry of Foreign Affairs announced that the two leaders “agreed to follow the principles of good-neighborliness, friendship and win-win cooperation,” “to promote global governance in a direction that meets the expectations of the international community” and “to practice true multilateralism, oppose hegemonism and power politics.” Ironically, these are the very values expressed in this book, ones undermined by China and Russia in practice. Are not the invasion of Ukraine and threatened invasion of Taiwan forms of hegemonism?
Unfortunately, China and Russia are not the only two countries undermining “win-win cooperation” and “true multilateralism.” It is something of a trend. Indeed, defenders of multilateralism are commonly seen as idealistic, stuck in the past or wedded to a vague “Western” hegemony. In reality, the liberal principles of a rules-based international system, open economic relations and respect for human rights are universal and comprise the best approach to facilitating broad-based improvement in human welfare.
Also in March 2023, the United Nations issue its “synthesis” climate change report, and the results were described as a “final warning” on the issue, stating that the “pace and scale of climate action are insufficient to tackle climate change.” No amount of further economic nationalism can help address this challenge. It would only exacerbate it. The imperative is for collective, multilateral action, most urgently in the elimination of fossil fuel subsidies and implementing carbon pricing.
As of the April 2023 annual IMF/World Bank meetings, more than twenty counties were either in debt default or seeking debt restructuring, with only Chad having been approved for the IMF's Common Framework discussed in Chapter 10. Further, China was refusing to either reduce the face value of debts or to increase payment periods, effectively refusing to seriously take part in the IMF's debt reduction process. The global public good of debt restructuring is proving to be elusive.
The United States continues it bipartisan consensus on techno-nationalism vis-à-vis China, with continued technological restrictions and threat of sanctions extending even to undersea cables, an unprecedented move. The evolution is from protecting legitimate security-related technologies to attempting to undercut China in all “foundational technologies,” including biotechnology. It seems that there is no end to technological realms that can come under the nationalistic umbrella.
7 - The Brexit Blunder
- Kenneth A. Reinert, George Mason University, Virginia
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- The Lure of Economic Nationalism
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- 01 August 2023, pp 99-116
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Summary
In January 2013, responding to a perceived rising tide of British opinion, Conservative UK prime minister David Cameron proposed a referendum on British membership in the EU. He said at that time: “It is time for the British people to have their say. It is time to settle this European question in British politics. I say to the British people: this will be your decision.” In doing so, he was attempting to mimic Labour's Harold Wilson who had successfully done the same thing in 1974 regarding membership in the European Economic Community (EEC). Cameron launched a years-long campaign that culminated in a June 2016 Brexit vote in which the British people “had their say.” In what has been called Cameron's “great miscalculation,” they voted to leave the EU or at least to try. Prime Minister Cameron resigned with his political career in tatters.
The Brexit campaign had deep roots in what is known as Euroscepticism, a mix of nationalist, ethnonationalist and populist ideas about the state of Britain in the world. Its rise is often linked to the signing of the 1992 Maastricht Treaty forming the EU, as well as to perceived economic decline in the UK. It is primarily but not exclusively linked to the political right in Britain and has some parallels with similar development in the United States. The vote was a close call, with majorities in Scotland, Northern Ireland and London voting to stay in the EU. It was a signature event.
Populism has been described as an antiestablishment movement that pits “the people” against “the elites.” The fact that populists are themselves often members of the elite does not seem to matter. Populism engages in mythmaking and the gross simplification of complex issues (heuristic substitution from Chapter 4). In the current era, these complex issues include economic globalization and multilateral relations. Mythmaking and the us/them cleavage work together in populist rhetoric, conjuring up “enemies of the people.” Further, as discussed in the previous chapter, “the people” can be defined in ethnonationalist terms (the “English”), and the results can be dramatic.
For example, Nigel Farage is a descendant of Huguenot refugees who fled from France to England in the seventeenth century to escape religious persecution. He became the face of the populist UK Independence Party (UKIP) that took up the pro-Brexit cause.
2 - Power and Plenty
- Kenneth A. Reinert, George Mason University, Virginia
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- The Lure of Economic Nationalism
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- 01 August 2023, pp 9-24
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Summary
Approximately three centuries before Albert Hirschman wrote National Power and the Structure of Foreign Trade, another book was written on the same subject. The author was Thomas Mun, a wealthy merchant trader born in 1571. Mun's early career was in the Mediterranean trade, particularly in Italy. These trade interests led to his becoming a very rich man. As a result of his commercial experience and his wealthy stature, in 1615, Mun became a director of the British East India Company (EIC), and he spent the rest of his career advocating on its behalf. In 1622, he was also appointed to a British government commission on international trade and thereby brought the interests of the EIC directly into government.
The EIC had its origin in a meeting that took place in London in September 1599. Present at that meeting were a group of traders, most notably the auditor of the City of London, Sir Thomas Smythe, as well as explorers, including William Baffin of Baffin's Bay fame. Their purpose was to request a royal charter granting them monopoly rights to trade, and they were quickly successful in this aim, the charter being granted in 1600. This set in motion a long series of events in which the EIC would expand into Asia with the largest private army in the world.
Along with his dedicated service to the EIC, Thomas Mun became the best-known member of a group of individuals who wrote on economic affairs in Europe during the sixteenth and seventeenth centuries. Their body of work became known as mercantilism. What exactly mercantilism was has been a matter of extensive debate and substantial disagreement to the present day. The prominent historian of economic thought, Henry William Spiegel, referred to the mercantilist idea as “economic warfare for national gain.” If that put it too strongly, mercantilism was most certainly a form of economic nationalism. Consider another description from the economic historians Ronald Findlay and Kevin O’Rourke:
The prevailing mercantilist doctrine of those times viewed the struggle for wealth as a zero-sum game, and each of the powers looked upon its colonies as suppliers of raw materials and markets for manufacturers of the “mother country” alone, with foreign interlopers to be excluded by force if necessary. […]
Most of the rivalries of the age of mercantilism were about which national company could gain control of a given market or trading area.
The Lure of Economic Nationalism
- Beyond Zero Sum
- Kenneth A. Reinert
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The Lure of Economic Nationalism addresses the continued appeal of economic nationalism. It places economic nationalism in both historical and contemporary contexts, from mercantilism and the writings of Friedrich List to Brexit in the United Kingdom and the Trump Administration in the United States. It also considers the alternative to economic nationalism in the form of a rules-based, multilateral trading system and the World Trade Organization. The book argues that going beyond zero-sum outcomes is better suited to address current problems, including rising tides of ethnonationalism in many countries and pandemics. The book is written in an accessible manner and draws deeply from research in economics and political science. It will be of interest to policymakers, economists, political scientists and the informed public.
List of Abbreviations
- Kenneth A. Reinert, George Mason University, Virginia
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4 - Zero-Sum Thinking
- Kenneth A. Reinert, George Mason University, Virginia
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- The Lure of Economic Nationalism
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Summary
Behind mercantilist and neo-mercantilist policies is the implicit notion that international economic transactions tend to be zero sum in nature. In many expressions of economics nationalism, for example, exports are a win, while imports are a loss. This formula is largely at variance with the results of international economics, but this kind of zero-sum thinking seems to be hardwired into human psychology. As it turns out, this is a field of inquiry in psychological sciences, and it shows that zero-sum thinking, if not universal, is a very real phenomenon with implications for understanding economic nationalism.
Game theory has been one of the most fundamental developments in the social sciences, and it had its origin in a paper by the mathematician John von Neumann on two-person, zero-sum games. In zero-sum games, the available resources and rewards are fixed, and one person's gain is another's loss. Subsequently, however, this original contribution was generalized to the possibility of non-zero-sum games by von Neumann and Oskar Morgenstern in their book Theory of Games and Economic Behavior. In this more general context, resources and rewards can increase, and there are win-win outcomes that can be achieved via cooperation.
Among researchers across many different fields, actual zero-sum games are considered to be rare. The problem is that even if a game is non-zero sum, it can be perceived as zero sum, limiting win-win outcomes and cutting off cooperative strategies. The possibility and perhaps prevalence of this zero-sum bias has profound implications. As stated by one set of researchers:
Misappraisals of a situation or domain as zero-sum even when it is objectively and explicitly non-zero-sum are far from rare. These misappraisals bear critical implications because the strategies that are appropriate in real zero-sum situations (e.g., aggression instead of cooperation) can be detrimental in non-zero-sum situations—leading to worse social and economic outcomes for all concerned.
Economic nationalism is largely a zero-sum enterprise, and it can dramatically shape impressions and beliefs at both the individual and collective levels. This can have significant impacts in the form of lost potential gains in international economic relations and even in domestic political coherence. We will explore some of these implications in this chapter.
Market Transactions
Basic economics shows that, under a set of assumptions, market transactions provide gains for participants. These transactions also tend to provide positive social welfare.
Notes
- Kenneth A. Reinert, George Mason University, Virginia
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6 - The Ethnicity Trap
- Kenneth A. Reinert, George Mason University, Virginia
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- The Lure of Economic Nationalism
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- 01 August 2023, pp 77-98
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Summary
In February 2020, US president Donald Trump paid a state visit to India. Indian prime minister Narendra Modi organized a welcome for him at the world's largest cricket stadium with a crowd of 100,000. As President Trump entered the stadium to be greeted by Modi, the crowd was treated to the Village People's 1978 hit song Macho Man. The two macho men hugged at center stage, and two versions of ethnonationalism met in an expert piece of performance art. President Trump led a long-standing ethnonationalist project in the United States, while Prime Minister Modi led a similar project in India. Both emphatically embraced political performance, intuitively knowing that they were leading projects in political psychology. This is a rather widespread practice, both historically and geographically. With its close rela-tionship to stochastic violence, it is also a potentially dangerous one.
Economic nationalism is a form of nationalism, and nationalism is about the “nation.” Nations, however, are not states or governments. They are something different. Nations are most often conceived of in terms of an in-group and an out-group. As one researcher put it many years ago, “the concept of ‘us’ requires ‘them.’” More recently, a team of business researchers put it this way:
Prejudice and discrimination are […] generated within an in-group by the perceived or actual threat of a distinct out-group to the physical, social, or economic health of the in-group. In attempting to reduce this threat, the opportunities of the out-group are restricted, and negative stereotypes of the out-group are developed to justify discrimination. (p. 763)
It would be nice to claim that economic nationalists are free of such discrimination, but this is often not the case. These authors also note that “hostility toward the out-group may be augmented during conditions of instability in the relative economic fortunes of nations” and that, during such episodes, pressure increases to maintain in-group solidarity. Such hostility is usually combined with a sense of crisis to strengthen its political psychology impacts. As noted by The Economist, “nearly all drawbridge-up parties argue that their country is in crisis and explain it with a simple frightening story involving outsiders.” This can be a volatile and sometimes lethal formula of political mobilization.
What Is a Nation?
Before delving too far into the subject of ethnonationalism, it is important to mention and to keep in mind that it is primarily cultural, linguistic and psychological.
10 - Beyond Zero Sum
- Kenneth A. Reinert, George Mason University, Virginia
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- The Lure of Economic Nationalism
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- 01 August 2023, pp 157-172
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Summary
In the preceding chapters, we have seen how economic nationalism functions as a lure for both economic policy and political dynamics. Its associated zero-sum thinking is a default in many circumstances, even though the majority of relevant contexts are not actually zero sum. We have also seen that economic nationalism, including ethnonationalism, pandemic nationalism and techno-nationalism, can set back actual economic and human welfare in multiple ways. Overcoming these defaults represents a perennial, major challenge for human progress. Nonetheless, before we conclude this book, we need to give economic nationalism its due.
Giving Economic Nationalism Its Due
This book has been quite harsh on economic nationalism in its various forms, but there are elements of it that are worthwhile and contribute to our understanding of the world. Going back to mercantilism, for example, there was a serious attempt to explore how the economic world worked and to begin to engage in real economic analysis. As stated in Chapter 2, the conception of the balance of payments possessed by some mercantilist writers was far superior to many present-day politicians. If their equation of power and plenty was too strong, they did at least identify two categories of concern that are relevant to this day.
There is less positive to say about Friedrich List and his vision of an imperial Germany. Nonetheless, his identification of both infant industry protection and the role of talented immigrants has relevance to this day. Unfortunately, his early followers also included imperial Japan, and his modern followers have both taken infant industry protection too seriously but not seriously enough. Retuning to this concept, modernizing it, and making it compatible with WTO law as a DFT remains a project surprisingly neglected. That said, we need to keep in mind that List and his followers wholeheartedly ignore the central role of services in modern economies, reducing the relevance of their ideas.
While economic nationalists often take zero-sum thinking for granted, their doing so has inspired researchers in other fields (political psychology, negotiations theory) to examine it in some detail. This examination reminds us that central concepts in economics can be difficult to understand and communicate and that, consequently, various forms of heuristic substitution are an inevitable default.
3 - Industry and War
- Kenneth A. Reinert, George Mason University, Virginia
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- The Lure of Economic Nationalism
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Summary
After the mercantilist era, economic nationalism became intertwined with industry or manufacturing, and the two have been remained so ever since. This fact was not lost on one of the founders of the field of modern political economy, Robert Gilpin, who notes:
For several reasons, the foremost objective of nationalists is industrialization. In the first place, nationalists believe that industry has spillover effects (externalities) throughout the economy and leads to its overall development. Second, they associate the possession of industry with economic self-sufficiency and political autonomy. Third, and most important, industry is prized because it is the basis of military power and central to national security in the modern world.
As we will see in this and subsequent chapters, these perspectives on manufacturing are limiting and tend to lead to conflict, something that Gilpin also notes. Further, the focus on industry turns out to be somewhat misplaced, and we need to take some time to see why.
What became known as the “Industrial Revolution” first took place in Britain or, more precisely, in the north of England. The initiating sector was the one we discussed in the previous chapter, namely, cottons. The initiating innovation was the flying shuttle, which, beginning in 1735, doubled pro-ductivity in weaving. Subsequent innovations took place in spinning. It is worth remembering that, up until the mid-eighteenth century, China and India accounted for approximately one-third and one-quarter, respectively, of global manufacturing output. Britain was playing catch-up but did so in a manner that surpassed these two previous loci of global manufacturing expertise. Eventually, these innovations had significant growth and wage effects in Europe. Exactly when this took place is a matter of debate, but it is located somewhere in the mid-nineteenth century.
Recall from Chapter 2 that the woolens sector in Britain successfully agitated for protection from cotton goods. This increased the incentives for domestic cotton goods production and innovation, including the introduction of a cotton–linen blend known as fustian that escaped the ban on cotton products. Steam power became central to the innovation processes as well. Importantly, innovations were not confined either to specific products or to specific countries. As noted by economic historians Ronald Findlay and Kevin O’Rourke, “the technical innovations that were first made in cotton were applied to the woolen, linen, and silk industries as well.”
1 - Albert Hirschman’s Forgotten Book
- Kenneth A. Reinert, George Mason University, Virginia
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In 1941, a little-known economist by the name of Albert Hirschman arrived at the University of California, Berkeley, on a fellowship. He was 25 years old and a Jewish German refugee. In the early 1930s, as Hitler rose to power, Hirschman had been active in the German Socialist Party but subsequently fled Berlin for Paris. From there, he went to study at the London School of Economics. Completing his studies at LSE, Hirschman went to Barcelona to fight in the Spanish Civil War. Then to Trieste, Italy, for doctoral work in economics and back to Paris to enlist in the French army. Peddling part of the way on a stolen bicycle, he later fled France over the Pyrenees and went on to Lisbon for his escape from European fascism.
While in Berkeley, Albert Hirschman met his wife and wrote a book. He would go on to write many more books as he became increasingly famous, and this first book has been almost forgotten. It is entitled National Power and the Structure of Foreign Trade and represents a refugee economist's struggle with the economics of fascism. Indeed, the book was in part a response to Herman Göring's famous statement that “guns will make us powerful; butter will only make us fat.” As such, it was a contribution to a centuries-long argument in economics between “power” and “plenty” and still has relevance for us today.
The objective Hirschman set out for himself in National Power was “a systematic exposition of the question of why and how foreign trade might become […] an instrument of national power policy.” To address this, he engaged in novel statistical analysis of Nazi trade relations in the pursuit of national power. This analysis led him to the following conclusion:
The Nazis have […] shown us the tremendous power potentialities inherent in international economic relations, just as they have given us the first practical demonstration of the powers of propaganda. It is not possible to ignore […] these relatively new powers of men over men; the only alternative open to us is to prevent their use for the purposes of war and enslavement and to make them work for our own purposes of peace and welfare.
15 - Global Capital Flows
- from Part III. - International Finance
- Kenneth A. Reinert, George Mason University, Virginia
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- An Introduction to International Economics
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- 18 September 2020
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Summary
This chapter provides an introduction to global capital flows. It considers four types of flows: foreign direct investment, equity investment, bond finance, and commercial bank lending. It considers the determinants of these four types of capital flows. It takes up the issues of net versus gross flows, capital account liberalization, and the application of capital controls.