Nationalism is defined as the belief that patriotism for your own country is of more value than other countries, and that your country should come before others. Nationalistic countries believe that their own politics and economic growth should be focus of their country, and not likewise for others. This rival’s globalism as it focuses away from helping more countries abroad than your own.
The current rise of nationalism such as Brexit, Trump’s America and Russia are a concern for global economics, as powerful countries are turning their attention from how to better global trade to how to better themselves. These countries invite trade protectionism, which attempts to limit imports and exports of both natural resources and goods, as a way to have only locally made goods available for the nations’ market. Trade protectionism is good for local companies as it limits their competition to only local ones, meaning less competitors in the market, this can create local jobs, furthering along nationalistic goals. However, this lack of competition means that companies do not need to work as hard to produce high quality products, meaning that low quality ones will suffice as competition is scare, leading to lower consumer confidence. Supply for local made goods would rise as alternative products are scarce in the market, resources would also be reallocated, where before they might have been exported and now they will be used locally.
Global economics have always favoured trade details between nations, where one country can export their goods to another country, and receive something else in return. As nationalism moves away from this possibly in favour of bilateral trade deals, other countries need to fill in the blank where that country is not involved, possibly leading to a trade deal with poor results. Trade between nations is believed to strengthen ties to other countries, and create a world without borders for trade, this is what globalism focuses on, that the global market is stronger than individual nation markets. Comparative advantage is a major driving force between trades with other countries, where one country is better at producing one item but lacks in the other, trade can help a country receive more of the product it lacks in production, and export the item it is good at making. Overall global trade seems a better option in the long run, but political swaying impacts the global trade deals, meaning it is harder to fully implement.
While global economics will be hit by the rise of nationalistic governments, local economies could expect to flourish under laws and regulations favouring them over international competition. Stronger local businesses will be preferred to foreign businesses and demand for local made products will increase. Nationalist economic policies can be characterised by corporate tax cuts, domestic deregulations, increased import tariffs and higher defence spending, all to benefit the local businesses and population. However, businesses who depend on foreign workers for a cheaper workforce will be impacted as nationalistic policies would have businesses only hire local workers, potentially costing the business more to hire local workers. Multinational companies may also be impacted as they would be required to produce all their goods in that country, which could cost more than to produce and import from other countries. All of this is economically beneficial and not so, where one policy benefits one party, it affects another, the government could do more to help everyone. Whether it will instead focus on which better supports the country is completely up to that leading party.
In conclusion, where nationalism may be an effective policy to run a country politically and economically natively, it no doubt worsens global trade and the goals of globalism. Whether you agree or not with nationalism as a way of government policy, it is the enemy of global trade, which quite often is beneficial to all parties involve.
Image credit: http://www.economist.com/news/international/21710276-all-around-world-nationalists-are-gaining-ground-why-league-nationalists