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Nationalism, Liberalism, and Capitalism

The Economist (July 15) published an editorial on Egypt and Saudi Arabia (two dictatorial countries allied with the United States in the Middle East) expressing hope that they would become democratic in the future.  What is surprising, however, is that in the same issue the magazine did a favorable review of a book by Stephen Kinzer, a former New York Times journalist, who, after analyzing the nationalist and capitalist revolutions under way in Turkey and Iran since the 1920s, advocates the alliance of the United States with these countries.  Perhaps this attitude of the major liberal magazine is a sign of the times.  It reflects the demoralization of the “globalist” ideology which characterized the 30 Neoliberal Years of Capitalism (1979-2008) — an ideology that condemned the nationalism of developing countries, while rich countries practiced without hesitation their own nationalism.

Historically, liberalism and economic nationalism have always been at odds with each other, but they are complementary ideologies.  Nation-states were formed through nationalism, and it was through this process that their frontiers were extended and broad and secure domestic markets were formed, making industrialization possible.  In other words, it was through a combination of nationalism and liberalism that nation-states such as Great Britain, France, and the United States achieved their capitalist revolutions.

Globalism was able to criticize economic nationalism (forgetting how different it is from dreadful ethnic nationalism) only because the nationalism of rich countries was not in danger: nobody in those countries doubts that their government’s role is to protect national employment, knowledge, and capital.

No doubt, a world without nationalisms would be better, but that would be a fantasy world.  In reality, society worldwide is today organized in families, organizations, and nation-states.  It is expected that each individual first shows solidarity with his family, with the organizations in which he participates, and with his country, so that he could later pursue common interests and promote cooperation among all.  Globalism teaches that rich countries are ready to cooperate, and the dependent elites believe it; they do not realize that what really moves them are their national interests.

When countries, like Saudi Arabia and Egypt, become subordinated to the rich countries, it means that their elites are alienated, that their economic development is slow, that corruption is rampant, and that economic inequality only increases.  When countries such as Iran use religion to strengthen their nationalism, they are adopting an old practice to achieve national cohesion and to complete their capitalist revolution — an essential condition for them to become consolidated democracies.  As long as rich countries do not understand that this religious nationalism is not against them, as long as their spokespersons continue to criticize Iran’s authoritarian government, as long as they support dictatorships such as Saudi Arabia and Egypt that offer no prospects for their people, they will be trading short-term interests of some of their enterprises for their own national interest.


Luiz Carlos Bresser-Pereira (Professor Emeritus, Getulio Vargas Foundation) is an economist.  Em Português.




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