The analytical frame of ‘economic patriotism’ helps explain the rise of xenophobic populism and its failure to acknowledge the complex realities of our economic interdependence
Contemporary politicians, particularly those with demagogic inclinations, pretend to their electorates that they can pull all the necessary levers of economic policy to exert control over the national economic future. 2016 has provided powerful examples on both sides of the Atlantic. The Brexit campaign promised to ‘take back control’, a vision that was also integral to Trump’s pledge to heal America’s economic wounds by reversing the industrial decline of rustbelt states. This is clearly a seductive vision, but unfortunately it ignores the reconfiguration of economic and political space which the interdependence of markets and multi-levelled economic governance regimes entail. The real world of political economy is much more complicated.
Private sector actors, large firms and other forms of private authority, as well as international treaties, regimes and agreements all greatly curtail government autonomy and the capacity of economic policy-makers to enact their visions for the governance of the economy. That this often goes unacknowledged when politicians articulate promises to exercise greater ‘control’ over the economy, jobs and growth is both very troubling, and enormously damaging to the quality of debate and commentary on political economy and economic policy.
A few years ago, Cornelia Woll and I developed a novel theoretical framework – ‘economic patriotism’ – which focuses on the overlapping economic governance regimes and dense international jurisprudence regulating them in which national economies and government are enmeshed. It highlights the limits that things like production, process and safety standards, and rules of origin requirements associated with the European single market and World Trade Organisation (WTO) membership place on national economic policy-making, and what governments can do about them. These complexities explain why it can take seven years to finalise a trade agreement. In doing so it draws attention to profound, if not self-evident, contradictions between international market integration and spatially limited national political mandates.
We argued that economic patriotism refers to an impulse by policy-makers to enact ‘economic choices which seek to discriminate in favour of particular social groups, firms, or sectors understood by the decision-makers as insiders because of their territorial status’. It entails ‘a form of economic partiality: a desire to shape market outcomes to privilege the position of certain actors’, thus it entails assumptions about who forms part of the economic community – who is, or should be, ‘in’ and ‘out’.
Economic patriotism, as a framework, offers an analytical lens to study how policy-makers seek to resolve what we see as perennial tensions between interdependent economies and political territoriality; between the international, the national, and subnational. The potential fruitfulness of this avenue of inquiry has been demonstrated by the Brexit campaign, the early period of Theresa May’s new government and now the Trump victory. This is because an important backdrop to the economic patriotism framework is that in a world characterised by an overlapping network of economic governance regimes, politicians face the ‘paradox of neo-liberal democracy’ (an idea developed by Colin Crouch). In essence, as Cornelia Woll and I argued, politicians’ ‘mandate is to pursue the political economic interests of their citizenry under conditions of complex economic, legal and regulatory interdependence where large parts of economic governance are no longer exclusively within their control’.
Our contemporary politicians, be it Boris Johnson, Theresa May, or Donald Trump, never acknowledge the inexorable constraints economic interdependence places on policy and action. Their pronouncements and programmes imply the possibility of ‘taking back control’ on a scale which is deeply unrealistic for any government. As the Brexit campaign proved for the UK, it is all but impossible in our current media and political environment to have a ‘grown up’ debate about the complexities of achieving economic governance, acknowledging the role played by the EU and other supranational bodies within national political economies. Assuming away these facts of 21st century economic life is tremendously detrimental to the quality of political discourse.
The May administration exemplifies both the economic patriotic impulse, and its failings well. Will Davies identified recently how May’s ‘protective state’ proffers an as-yet unelaborated turn to economic interventionism to shape how market outcomes to privilege certain groups, and to attempt to police the boundaries of an equally under-defined conception of protecting British citizenship. Defining who is ‘in’ and ‘out’ within the malleable definition of ‘patrie’ makes immigration a particularly pressing economic policy issue. All the more so when contemporary upheavals in Europe, the Middle East and Africa are generating an ongoing and intractable migrant crisis.
The UK government’s response post-Brexit has been to proclaim tighter control of immigration – signalled by baffling moves to restrict access to UK higher education for increasing numbers of the foreign students whose fees bankroll our knowledge economy. For all the rhetorical claims to ensure greater control of borders whilst opening up to the world, Theresa May’s recent trip to India demonstrated some uncomfortable realities. Ironically, without the ability to promise access to the EU single market, the UK’s trade negotiating hand is gravely weakened. Prime Minister Modi made it clear that facilitating more UK-India trade would be dependent upon allowing easier migration for Indian citizens into the UK, and restoring Indian students’ right to stay and work in the UK after completing their degree. Meanwhile, May continues to pretend that deepening economic ties with India and others can proceed whilst maintaining ever tighter control of UK borders.
Euroscepticism, a consistent undercurrent of British politics (which has now, in part, led us to Brexit), is one response to the tensions of international market integration and spatially limited political mandates. In a troubling twist, an array of European political forces from Alternative fur Deutschland, the French Front Nationale, the 5 Star Movement in Italy, Orban in Hungary, and Kaczynski in Poland, to UKIP and the Conservative Party in the UK are seeking to ‘resolve’ these tensions in ways more directly tied to racist populism.
The discriminatory, and indeed xenophobic elements of 2016-vintage economic patriotism are becoming more pronounced, less apologetic, and less the stuff of dog whistle politics. It is in that light that the announcement by Ministers at the Conservative Party conference that UK firms, universities and schools will be required to supply lists of foreigners within their institutions should be interpreted. Crucially, who is ‘in’ and who is ‘out’ entails the state reinforcing and instantiating those divisions. Trump’s campaign was similarly grounded in exploiting xenophobic resentments against immigrants, promising the construction of an ‘impenetrable, physical, tall, powerful, beautiful southern border wall’ to substantially limit immigration. Trump also promises to take back jobs that American firms have outsourced to Mexico and other emerging markets.
Failure by politicians to explain the limits of their economic policy control and to acknowledge the contradictions and tensions between international market integration and spatially limited political mandates will sow further disappointment amongst already disaffected voters and citizens. May, Trump, Johnson and others seek to appeal to those ‘left behind’ by globalisation but risk letting them down once more. The stakes are incredibly high. As Andrew Gamble recently noted, post-Brexit, post-Trump disaffections and destabilisations threaten ‘to unravel the western economic and political order which has been the framework of world politics for the last seventy years.’
The profound disjuncture between the promises xenophobic populists politicians make in office about ‘control’ over the economy, and the much more complex realities of 21st century inter-dependent economic governance poses an existential threat to the institutional edifices (EU /WTO) of a broadly liberal approach to international economic relations.
A version of this was blog delivered as the keynote address at the 2nd States in Varieties of Capitalism Conference organised by the Institute of World Economics at the CEU Budapest, November 10-11th 2016.