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Chapter 2: Mercantilist IPE - Coggle Diagram

- - - - • Policy-Based Definition: Liberal economists used EN to discredit non-liberal policies like tariffs, quotas, and autarky. But the underlying motivations (e.g., sectoral interests or socialism) weren't necessarily nationalist
      - • Realist/Statist Definition: defined EN as an economic variant of realism or mercantilism, where economic activities are subordinate to the goal of state-building and state interests. But some critique that this def. is misnomer bec it focuses on the state and its power/interests, neglecting the core element of nationalism and national identity
    - - • Core Definition: EN is an ideology concerned with the influence of national identities and nationalism on economic policy. It should be defined as a set of policies resulting from a shared national identity.
      - List's View: rejected the "boundless cosmopolitanism" of classical liberals who focused on individual or universal human welfare.
        
        List's system, the "National System of Political Economy," was based on NATIONALITY as the intermediate interest between individualism and humanity
        
        The goal of economic policy must be the prosperity, civilization, and power of a given nation.
  - - - Infant-Industry Protectionism
        
        • Core Policy: Use selective tariffs to cultivate an industrial sector until it is internationally competitive, only then moving to free trade
        
        • Rationale: Free trade would cause agricultural countries to lose out relatively to already-industrialized countries. This policy was meant to equalize power and capabilities among nations to prepare for an eventual "universal society" of strong, equal nations
      - Macroeconomic Activism
        
        • Core Policy: Advocated for an inconvertible currency (rejecting the gold standard) to allow for active national macroeconomic management (e.g., expanding the money supply, deficit spending) to ensure full employment and national prosperity.
        
        • Critique of Gold Standard: Liberals supported the Gold Standard for its laissez-faire cosmopolitanism, but Attwood saw it as a threat because it imposed external discipline and undermined the state's ability to serve domestic economic needs. An inconvertible national currency, conversely, would be "self-dependent" and bolster national loyalty, particularly in wartime.
      - Autarchic Economic Nationalism
        
        • Core Policy: Advocated for complete national economic self-sufficiency/GOV'T (autarchy) to protect national values and control domestic economy.
        
        • Fichte's Rationale (Statist Planning): Autarchy was necessary to support a highly interventionist state with central planning. He advocated rigid exchange controls and abolishing gold to prevent foreign trade dislocations from disrupting national plans.
        
        • Muller's Rationale (Romanticist/Sociological): Autarchy was necessary to strengthen the "spiritual" bonds and collective national identity. He opposed free trade because it destroyed national cohesion, and metallic money because its cosmopolitan nature destroyed links to the national state.
      - Liberal Economic Nationalism
        
        • Core Policy: Supported core liberal policies like free trade and the gold standard.
        
        • Rationale (Nationalist-Serving): Unlike cosmopolitan liberals who supported these policies for global peace/efficiency, liberal ENs endorsed them because they believed they would strengthen national identities, prosperity, and/or the power of their nation-state.
        
        Free trade: the UK built a "world-manufacturing monopoly". Others saw it as linked to national political values. in order to boost wealth hence power
        
        Gold Standard: : Adopting it was a source of national prestige, a way to attract investment, and a vehicle for consolidating national unity
- - - - • Bannon distinguishes between illegal and legal immigration, arguing both depress wages and reduce employment opportunities for working-class citizens
      - • He supports a merit-based system, which limits immigration while prioritizing skilled workers, until domestic employment reaches full capacity.
      - • He insists his nationalism is not racial or ethnic but based on citizenship: economic nationalism, he claims, “doesn’t care about race, religion, or gender it only cares that you are a citizen.”
      - • Critics challenge him for aligning with European right-wing populists like Orbán and Salvini, whose rhetoric often has racial undertones. Bannon defends them, saying they are not racists but patriots trying to protect their citizens.
      - • He refuses to condemn their controversial statements, arguing that elites unfairly label nationalists as racist because they reject mass immigration and supranational control.
    - - • Views free trade as a fetish for elites that undermine national economies (claims that trade deals & immigration are two sides of the same coin designed to suppress wages and weaken working-class bargaining power
      - • Supports tariffs bec they rebuild domestic manufacturing and reorient global supply chains away from China.
      - • For Bannon, China is the core adversary a “totalitarian mercantilist regime” exploiting the liberal trading system to hollow out Western industry.
      - • He likens China’s model to 1930s fascism and blames liberal economists for enabling it through decades of engagement and “wishful thinking.”
      - • The journalist challenges Bannon with mainstream economic logic those tariffs raise consumer prices and do not significantly increase jobs but he rejects this, arguing that the goal is not short-term efficiency but long-term sovereignty and worker empowerment.
      - • Bannon argues that free trade has deindustrialized the U.S., created asset bubbles favoring elites, and impoverished workers, while populist policies are aimed at reversing this inequality.
    - - • Bannon calls for the “deconstruction of the administrative state” reducing bureaucratic power, limiting regulations, and returning decision-making to citizens and entrepreneurs.
      - • He contrasts his vision of worker-centered capitalism with what he calls crony capitalism — a system controlled by the “permanent political class” and corporate lobbyists.
      - • He praises European populist movements for challenging the EU’s supranational structure but says they should evolve toward an entrepreneurial populism that distributes power and capital more broadly.
      - • Bannon envisions a “union of sovereign nation-states”, not a federalized Europe, arguing that true freedom and democracy reside in national sovereignty, not in bureaucratic international institutions.
    - - • Bannon repeatedly attacks global elites politicians, bankers, and corporate leaders who he says enriched themselves through global finance while abandoning the working class.
      - • He claims the 2008 financial crisis and the bailouts that followed “saved the elites but left workers behind,” fueling the populist revolt that brought Trump to power.
      - • He argues that populism is the rational response of citizens who have witnessed decades of declining wages, rising costs, and elitist governance.
    - - • Bannon views climate change policy (like the Paris Accord) as another example of globalist manipulation unfairly restricting Western economies while letting China pollute freely.
      - • He says Trump’s withdrawal from the Paris Agreement was about economic fairness, not denialism.
      - • He identifies a future “technological singularity” — the convergence of automation, AI, robotics, and genetic engineering as the real existential challenge for workers, arguing that control must return to citizens and not to the “scientific-managerial class in Davos.”
    - - • Bannon compares #MeToo and Time’s Up to the French Revolution powerful but potentially destabilizing forces that seek to completely reorder social hierarchies.
      - • While he claims to support women’s empowerment (pointing to his daughter’s military service), he views the movement as anti-patriarchal and potentially destructive to traditional cultural and religious structures.
    - - • Responding to criticism that younger voters largely oppose his views, Bannon insists populism will win through actions, not rhetoric: by delivering jobs, higher wages, and national dignity.
      - • He describes millennials as “serfs” under global capitalism — burdened by debt and stagnant wages while elites prosper.
- - - - Argues against that mainstream economists whos reject the idea of economic nationalism, as this dismissal oversimplifies its intellectual and historical roots. Economic nationalism is not a mere rejection of markets or globalization; rather, it emphasizes the subordination of economic activity to national goals such as industrial development, political autonomy, and national security.
      - He Called out Germany and US in the 19th century as they followed nationalist policies
    - - • Economic liberalism prioritizes individual freedom, market efficiency, and international integration.
      - • Economic nationalism prioritizes the collective interest of the nation, strategic control over resources, and economic sovereignty.
      - He argues that economic nationalism does not necessarily oppose markets, but rather seeks to discipline and direct them to serve national objectives. This approach was seen as essential for late-developing countries trying to catch up to industrial leaders
    - - • Germany’s Friedrich List promoted protectionism and state support for industry as essential steps in achieving national development.
      - • The United States used tariffs and internal improvements to protect its “infant industries.”
      - • Japan’s Meiji Restoration relied on state-led modernization and selective openness to foreign trade.
    - - rebuts the idea that economic nationalism lacks theoretical rigor. He shows that it is grounded in distinct ethical and political assumptions:
        
        • Nations, not individuals, are the main actors in economic life.
        
        • Economic policy should serve national welfare and collective goals.
        
        • Markets must be embedded in social and political contexts, not allowed to operate autonomously.
      - liberalism’s universalism its claim that free markets benefit all is itself ideological, masking the fact that global liberalization tends to advantage already-powerful nations
- - - - • Contribution:
        o Industrialization: Central to wealth and power.
        o Productive Powers: A broad concept encompassing not just capital and resources, but a country’s culture, institutions, and political system all reinforced through industrialization.
        o Free Trade Critique: List viewed free trade as a tool of British hegemony. He was not opposed to free trade in general but was against it among unequal countries.
      - • Geographical Focus (Limitation): primarily concerned with Germany, the United States, and France. did not advocate for his policies in Latin America, Asia, or Africa, believing they were "destined to be commodity exporting countries" and should therefore be free traders.
      - • Motivation: Defensive against British power, but also had an offensive element, aiming to build German power for potential future conquest.
    - - • Key Difference (Social Vision): Unlike List, Carey was deeply interested in domestic distributional issues. He combined his nationalist goal of maximizing U.S. power with a populist vision that this would help workers and farmers against the elite power of global trading classes. He even applied this to England, arguing that the poor in England were exploited by the free trade system
      - • Global View: In contrast to List, Carey was very interested in non-Western countries and believed they should pursue Neomercantilists policies. He was also anti-colonial, calling for an end to British imperialism in India
      - • Motivation: Entirely defensive against foreign economic power.
  - - - neomercantilism has been far more common and heterogeneous than previously acknowledged, which suggests that periods of "pure" global free trade are likely rare interregnums corresponding to a single, dominant power (e.g., Britain, post-WWII U.S.).
      - • Emergence of Neomercantilism: These ideas tend to emerge in contexts of high economic vulnerability and high geopolitical vulnerability.
      - • Conditions for Free Trade: The opposite conditions peace, low geopolitical threat, and limited domestic upheaval from globalization are required for free trade to flourish.
    - - • New Sectors: Contemporary neomercantilism focuses less on traditional industrialization and more on new "leading sectors" like digital, AI, and green technology.
      - • Green Transition Driver: The Neomercantilists mindset "If we don't do this, someone else is going to get ahead and outcompete us" is used to mobilize political support for green industrial policy strategies (like the European Green New Deal or China's push into renewables).
      - • Deep Roots: Even Henry C. Carey linked his neomercantilism to environmental concerns (soil fertility) in the mid-19th century, showing the connection is not entirely new.