The United States was one of the world’s first modern nations and one of the first to break free from colonial rule. It therefore stands at the beginning of the history of economic nationalism. This chapter analyses how nationalist thinking on the economy evolved in the USA from the Revolution to the Civil War. During this era, nationalists shifted from an outward-focused system aiming for economic development to an inward-focussed system based on protection. Developmental ideas were first championed by Alexander Hamilton, but his elitist conception of economic policy did not sit easily with the democratising ethos of the new nation. Economic nationalism became a mass movement as intellectuals like Daniel Raymond, politicians such as Henry Clay and activists in the mould of Mathew Carey jostled over questions of trade, manufacturing and banking. Instead of Hamilton’s close relationship between government and capitalists, the new movement put the everyday American producer at the centre. As it did so, isolationist ideas came to dominate. The intellectual capstone of this strand was provided by Henry Carey, whose influence would entrench a distinctly protectionist ‘American System’.

Nationalist ideas on the economy went global in the late nineteenth century, affecting policy in Germany, the Austro-Hungarian Empire, Ireland, India, Russia, the Ottoman Empire and Japan. In general, policy makers considered closing the gap with Great Britain to be of paramount importance. This aided the spread of Listian ideas. However, these ideas were transformed by local conditions in the countries they impacted. Developmental approaches worked better if they could be tethered to indigenous ideas, as was the case in Japan. In Germany, Listian was transformed into an aggressive ideology of territorial expansion and national struggle. In colonial India and Ireland, opposition to British rule and the necessity of public mobilisation meant that industrialist ideas were supplemented with agrarian interests. In multi-ethnic locations, such as the Russian, Ottoman and Austro-Hungarian Empires, isolationist approaches came to the fore as nationalists looked to build ethnically homogenous economies separate from those of other nationalities.

Economic nationalism became a dominant, and often destructive, discourse in the interwar period. This manifested itself in the rise of economic antisemitism in Nazi Germany, as well as in the corporatist dictatorships ruling Italy, Romania and Brazil. These autocracies were promoted in the writings of Mihail Manoilescu, who believed that dictatorship could spur growth even in autarky. In other ways, however, the interwar period saw a sharpening of existing nineteenth-century trends. Anti-imperialist movements remained powerful, especially in China, where Sun Yat-sen conceived of a powerful protector state that would manage foreign investment. Multi-ethnic contexts, as in Mandatory Palestine, encouraged isolationist approaches, this time from Zionist nation-builders. These efforts at nation-building encouraged economic segregation and ultimately inter-communal conflict. Even Britain, the erstwhile beacon of free trade, attempted to transform its Empire into a self-sufficient trading block during the Great Depression.

As empires fragmented after the second world war, politicians in the Global South finally had the opportunity to determine the economic policies of their newly independent states. As many of these countries were relatively poor, developmental ideas came to the fore once more. This is true both in sub-Saharan Africa as well as in Asia. Nationalist movements in these regions combined their nationalist economic ideas with a variety of complementary ideologies. In sub-Saharan Africa, politicians such as Kwame Nkrumah and Julius Nyerere turned to socialism, which they interpreted as a developmental system. In Japan, South Korea and Taiwan, governments espoused free market economics, which they supplemented with an activist state that promoted exports. Argentina and Egypt, on the other hand, saw the rise of populist regimes. These provide another important type of economic nationalism. Populists such as Juan Perón and Gamal Abdel Nasser associated international integration with enrichment by domestic elites Because they opposed these elites, populists sought to cut links with the world economy and espouse isolationist economic systems.

There are fundamental commonalities in the way nationalists view the economy and these commonalities are important enough to speak of a distinct nationalist approach to economic thought and policy. This does not mean all nationalists think and act in the same way – many policy positions are hotly contested among nationalists. But it does mean that nationalists choose their economic aims from a common menu. This introduction develops a conceptual framework to investigate this policy menu. I argue that the basic options on this menu are, firstly, isolation from the world economy, and secondly, economic expansion. Attempts to overcome the potential conflict between these two aims drives much of nationalist policy making. The introduction then focusses on solutions nationalists have used to overcome this dilemma through compromise, regulation, political reform, or imperial expansion. It proceeds to discuss the degree to which these choices are determined by interests or ideas, and finishes by analysing how such ideas are commonly translated into policy.

China continued its developmental approach after joining the World Trade Organisation in 2001. However, the policy of Xi Jinping also attempted to achieve self-sufficiency in high-tech products through an active industrial policy. This triggered a protective response from China’s trading partners, including India, the United States and Europe. This is one reason for the trend of the 2000s and 2010s towards isolationist approaches. The second factor is the return of populism, which spread not only to high income regions, such as the Britain, Germany, Hungary and the United States, but also to poorer countries, such as Bolivia. In these countries, nationalists from both the left and right wing of the political spectrum blamed rising domestic inequality on global integration. Amplified by the coronavirus pandemic and rising migration induced by military conflicts, populists promoted international decoupling.

This chapter shifts the focus to Europe in the early nineteenth century, where three important archetypes of economic nationalism were conceived. The first two were isolationist. Protectionists in France promoted disengagement from the world economy to forestall a rise in economic inequality which they feared might undermine national unity. Romanticist philosophers such as Adam Müller and Johann Gottlieb Fichte in Germany saw intensifying trade as eroding ‘traditional’ national and cultural values, which led them to advocate strict autarky. Friedrich List drew on these ideas, but also on developmental American approaches, in particular Alexander Hamilton’s ideas. He crafted an intellectual synthesis that sought to spur industrialisation by managing trade. However, List was unable to solve the tension between an ideology defending the economic sovereignty of small nations and one advocating imperialist expansion in search for markets, land and resources.

The conclusion draws the historical threads together and explains the causes of economic nationalism. It is most useful to think of nationalists as reacting to economic inequality. If inequality occurs between nations, we are more likely to witness expansionist ideas gain prominence. If inequality occurs within nations and is blamed on integration with the world economy, this is most likely to give rise to isolationist ideas. Both kinds of economic inequality are often accentuated by political inequalities. The motive for catch-up growth becomes more pressing if the nation is seen as politically subordinate within a system of imperial rule. Domestic inequalities are frequently given salience if they correspond to ethnic divisions within society. Based on these insights, the conclusion casts its gaze forward and predicts that both strands of economic nationalism will continue to shape economic policy in the near future.

The institutions of the developmental states set up in the postwar period began to crumble in the 1980s as liberalisation took hold. Isolationist approaches were on the back foot. However, this did not mark the end of economic nationalism. Nation-states were now recast as agents shaping competitiveness and therefore growth. This process is visible in the Baltic states breaking free from the Soviet Union, in Malaysia of the 1990s, and most importantly in reform-era China. Beyond these similarities, the differences are equally enlightening. China’s reforms as conceived by Deng Xiaoping saw an initially cautious, but increasingly rapid, dismantling of Maoist autarky, with the ‘rejuvenation’ of the nation becoming the principal aim. Malaysia under Mahathir Mohamad only slowly moved towards a developmental policy, because policy also tried to achieve the economic advancement of ethnic Malays over the country’s ethnic Chinese minority. Finally, not all independent states born from the Soviet dissolution could turn to the West. Ukraine in the early 1990s remained caught between internal divisions and increasingly aggressive Russian policy.