The fruits of nationalism

The 21st century has gotten off to a bad start. The 1980s and 1990s were some of the best decades in human history, and the good times continued into the early 2000s. But in recent years things have gone steadily downhill. In the 1980s and 1990s, most of the news in the financial papers was good news. Now it’s almost all bad news. Mostly self inflicted wounds.

While there are many factors in play, including the aftereffects of Covid, the underlying problem is rising nationalism. Consider the following Bloomberg headline, discussing the effects of the US moves to restrict technology transfer to China:

Chipmaker Rout Engulfs TSMC, Samsung With $240 Billion Wiped Out

  • Markets in Korea, Japan and Taiwan return from Monday holiday
  • Selloff extended to currency markets, with Korean won falling

That’s all caused by nationalism in the US and China.

Other headlines point to problems with the UK economy. Once again, many factors are at work. But it’s worth noting that ever since 2016 the UK has been doing poorly even relative to other developed countries. Some of us warned that Brexit would reduce the UK’s GDP, and it has. Once again, the fruits of nationalism.

Growth in the US has been slowed by a labor shortage, mostly due to a crackdown on immigration. Again, that’s nationalism.

The global economy has been severely impacted by the war in Ukraine—the result of Russian nationalism.

Trump’s trade war with China, which Biden has continued, is also reflective of nationalism.

Biden’s recent IRA bill has major weaknesses due to various buy America provisions, which will limit their effectiveness in addressing global warming. That’s nationalism.

There has always been a certain amount of bad news. But it used to be offset by occasional good news, such as international trade agreements, deregulation, and privatization. Now we get the bad news without the good.

I actually view these problems as fairly minor. The developed world is pretty rich, and it doesn’t much matter if we lose a few points of GDP growth. The more worrisome effects of rising nationalism will come later, in the form of increased war. There was also a rise of nationalism during the early 20th century, and we all know how that played out.

PS. A while back I recall some pundits complaining about the effects of globalization. Well, how are you guys enjoying the alternative? Have you checked you investment accounts recently?



22 Responses to “The fruits of nationalism”

  1. Gravatar of Lizard Man Lizard Man
    15. October 2022 at 18:39

    Disagree that US sanctions on China’s semiconductor industry are purely nationalism. It is hard to believe that they have nothing to do Russia’s invasion of Taiwan making US policy makers change their minds about the likelihood of war in the Taiwan Strait. Especially given that Biden said that the US would fight to defend Taiwan. I am not happy about the rising prospects of war with China, but I don’t know what else national policy makers can do. Encouraging immigration from China would hurt China and help the US, but increased immigration combined with locally imposed and pervasive constraints on housing supply seems like a recipe for falling living standards.

  2. Gravatar of ssumner ssumner
    15. October 2022 at 19:06

    “I am not happy about the rising prospects of war with China, but I don’t know what else national policy makers can do.”

    How about refrain from fighting a war with China? If fighting wars with nuclear powers is such a good idea, why aren’t we fighting a war with Russia? Who gave Biden permission to fight a war with China? This is madness. Have we learned nothing from the past 50 years?

    And God help us if our immigration policy is being determined by zoning regulations.

  3. Gravatar of Stevec Stevec
    15. October 2022 at 22:16

    I just looked up gdp of UK, Germany, France, Italy over last 40 years.. pretty sure most people wouldn’t be able to guess which graph was the UK. Including our host.

  4. Gravatar of Stevec Stevec
    15. October 2022 at 22:32

  5. Gravatar of George George
    16. October 2022 at 06:40

    “The CIA told the FBI the Russians had intercepted a call indicating Hillary Clinton personally approved an effort “to stir up a scandal against U.S. Presidential candidate Donald Trump by tying him to Putin and the Russians’ hacking of the Democratic National Committee.”

    “This has all the classic earmarks of a Russian information operation run through the Hillary Clinton campaign”

    Global communism is the hidden virus of humanity.

  6. Gravatar of George George
    16. October 2022 at 06:42

    “How about refrain from fighting a war with China?”

    The CCP is ALREADY waging a war. ON US ELECTIONS SYSTEMS, and who knows where else around the world.

    All wars are 90% informational and 10% kinetic.

  7. Gravatar of ssumner ssumner
    16. October 2022 at 07:12

    Stevec, LOL, that’s not a RGDP graph. Nice try!

  8. Gravatar of Ricardo Ricardo
    16. October 2022 at 15:25

    Whenever a farmer or a rancher, or a factory work says:

    “you know guys, my life is getting worse, the prices are rising, and my purchasing power is declining (real wage), and most of the jobs that I can get are being shipped to Vietnam where the minimum wage is about $200 a month” Sumner and his band of democrat thugs call them a “nationalist”.

    Whenever these farmers warn us about the centralization of their industry: that is, foreigners buying up farms and consolidating land, which incidentally would give them total control over subsistence, and whenever factory workers raise the alarm about critical industries such as technology being bought by companies owned and operated by the CCP or some other nefarious actor, Sumner and his band of democrat thugs call them nationalists.

    Do you see the pattern here?

    Whenever the hard working people (clearly not Sumner) actually stand up for themselves, and tell the so-called elite (really idiots in power) that maybe we should raise tariffs on certain goods and protect our critical infastructure from outside actors, or maybe we we shouldn’t subscribe to that radical liberal proposition because it violates our religious tradition or our conception of goodness, Sumner and his band of thugs scream nationalism, Hitler, Nazi, racist, xenophobe, or any other variation of epithets to try and put fear into your heart so that he can exploit that fear.

    This is the tyranny of global liberalism, which really isn’t liberal. It pretends to be, but its underpinnings are not. Community power, decentralization, and a movement away from supranationals and globalism, the type of globalism that benefits MNC’s at the expense of everyone else is not Hitler. Gravitating away from people like Sumner who speak for those large organizations is not Hitler either.

  9. Gravatar of Aladdin Aladdin
    17. October 2022 at 06:54

    Liz Truss came in, an old school Thatcherite fashion, with a strong pro-growth traditional conservatives supply side plan. It fell apart in a matter of weeks.

    The same thing is being replicated in every country around the world, and counter movements, when they emerge, quickly die out. This isn’t the result of any one person or idea. It seems like a powerful trend.

    I don’t know what’s going on, I don’t know how to stop it, and I certainly do not know when it will end. It is sad.

    I am amused at all the tech people I know cheering on the China action, like guys, you guys make a ton of money coding on the chips made in Shenzhen. Manufacturing that is not easy, and the cost to you is 5 cents a chip, maybe.

    Almost all of the surplus by these chips flows to American software engineers. And software engineering is a lot easier work! Do you really want to be making these yourself? The engineer copying and pasted the ML algo on the TPU chip gets paid a hell of a lot more than the manufacturer of that chip. I don’t think the people cheering this want to live in a world where that is flipped.

    I keep hearing, over and over and over again, how national security this national security that … no one has presented any hard evidence of anything. Yes of course, some of the profits of trade flows to the Chinese military! Some of it flows to ours! The money made from trading with china, a portion of it is taxed, which goes to defense.

    As long as no one is directly helping the others militaries in a treasonous way (and arguably Trump did that!), we accept that, and understand that destroying everyone’s economy is not a solution. When Biden says, in very explicit terms, the reason for this is to deny China access to technology, for civilian purposes!, to “prevent China from becoming too powerful”, that’s not targeted at the military, that’s targeted at Chinese citizens, who you are punishing for their success.

    It also seems just pure … racism at some point. Like I get not wanting American data in the hands of the CCP via Tiktok. But you must understand, the Europeans feel the exact same way about Facebook. And yes, America is a democracy, but Facebook is more intrusive. All the indignation about GDPR … how many of those people are complaining when America pursues its, far more draconian, version of it?

    And all of the military strategists, competent ones, I have spoken too were very clear that counter China measures ought to be taken in a targeted way, with different alliances on different issues, and that containment is a recipe for the destruction of the world economy. That was why the Trans-Pacific Partnership was a masterstroke. But no, everyone has just decided to go to war. The exact same fact patterns preceding WWII, with rising nationalism from all sides, is playing out again, except we don’t have “it was the great depression and we didn’t know any better” as an excuse.

    Long post, I don’t know why I made it here where no one would see it, but yeah. Its extremely disappointing.

  10. Gravatar of Aladdin Aladdin
    17. October 2022 at 07:04

    In my undergraduate I studied chemical engineering, and we would go on these tours of manufacturing facilities and chemical plants, and my basic response to these was … this sucks. You are out in the middle of nowhere, the company basically bought out the local government, there is pollution everywhere, many health hazards, plant is at ridiculous temperatures for the process, a mistake will kill everyone at the facility, lots of physical work, despite the physical work everyone is obese, no prospects for finding future spouse, and so on.

    Continual American desire for these manufacturing jobs is rather amusing. I like getting paid to sit in an air-conditioned room drinking free coffee typing code on a computer all day.

  11. Gravatar of ssumner ssumner
    17. October 2022 at 07:22

    Ricardo, LOL, you think farmers and ranchers favor protectionism? Socialists like you don’t even know who supports your cause.

    Aladdin, Great comment.

  12. Gravatar of Monday Links – The Goodman Institute Health Blog Monday Links – The Goodman Institute Health Blog
    17. October 2022 at 08:50

    […] Scott Sumner: the 21st century is suffering from a spate of nationalism. […]

  13. Gravatar of Lizard Man Lizard Man
    17. October 2022 at 10:06

    Should the US ignore the stated aims of the CCP to reunite Taiwan with the mainland, and actions that indicate that they are willing to use force to do so? Building semiconductor fabs in the US may not be the best idea, but depending upon Taiwan and China is also a bad idea because the US will at least sanction China for an attempted invasion of Taiwan, and an attempted invasion of Taiwan will probably cause the collapse of Taiwan’s semiconductor industry as customers and key employees look for other places to make chips.

    Not to mention the illogic of selling and transferring advanced military technology to a rival who plans to use that technology against an ally.

  14. Gravatar of George George
    17. October 2022 at 15:33

    Ukraine’s constitution has overt Nazism baked right in to it.

    Check out Article 16:

    “and to preserve the gene pool of the Ukrainian people, is the duty of the State.”

    Imagine if Germany’s constitution said this.

    But because of muh left wing narrative, this is OK.

  15. Gravatar of LC LC
    17. October 2022 at 18:26

    Great comment by Aladdin.

    It is instructive to see how much US has obsessed with Taiwan ever since TSMC overtook Intel for process leadership. Goading China into attacking Taiwan solves that problem. (OK, that’s the cynic in me speaking.)

  16. Gravatar of Winston Winston
    17. October 2022 at 18:57

    After reading many of these posts from the UK, I think you could summarize Scott’s entire blog from 2010 to present in just a few words:

    He generally despises anything and everything to do with farmers, factory workers, republicans, and the rural working class; he prefers European socialism over American individualism; He’s a utilitarian (sort of but not in the most coherent way); he typically favors bigger government policies like sweeping abortion laws, gun laws, universal health laws and a supranational body of laws, etc; he likes free trade; he is a supporter of TikTok, BLM policies, and open borders; he has a passionate hatred for, and an almost a malicious disposition, towards your former President Donald Trump. He is a big supporter of NATO, WHO, WEF, etc; he sides with the NATO bloc in most disputes involving the Russian bloc; he’s an avid movie buff; and he’s in love with nominal GDP.

  17. Gravatar of mbka mbka
    17. October 2022 at 23:57

    “A while back I recall some pundits complaining about the effects of globalization. Well, how are you guys enjoying the alternative? Have you checked you investment accounts recently?”


  18. Gravatar of George George
    18. October 2022 at 05:53

    Evidence is pointing to CHINA, not Russia, as ‘hacking’ US elections.

    The ENTIRE Democrat establishment were constantly claiming, without evidence, that Russia hacked the 2016 election.

    Now we have EVIDENCE IN COURT, that CHINA is hacking US elections.


    Continuous deliberate silence on this at some point cannot be anything other than tacit acceptance.

  19. Gravatar of George George
    18. October 2022 at 06:23

    “A while back I recall some pundits complaining about the effects of globalization. Well, how are you guys enjoying the alternative? Have you checked you investment accounts recently?”

    False inference, and false dichotomy, lol.

    False inference because it falsely infers that the adverse impacts of continuous ‘globalization’ where investment accounts would have done even better had those impacts not taken place, are somehow not taking place when they are.

    False dichotomy because it falsely sets up two models, one world government and national self-determination as accurate ‘alternatives’ of what is in fact taking place, when in fact neither are independent from each other as both are operating in the information and in politics.

    It is common in the communist mindset, e.g. Stalin and Mao, that all problems of communism are caused by insufficient communism.

    Site owner’s mindset will be to blame lack of world government as responsible for every problem in every ‘country’.

    Central banking is globally centrally controlled, the EU is Hitler’s dream come true, the CCP hacked US elections, and the legacy media is in the hands of the perpetrators who killed hundreds of millions of people during the 20th century and is still seeking to take over the world.

  20. Gravatar of ssumner ssumner
    18. October 2022 at 08:21

    Lizard, You said:

    “Should the US ignore the stated aims of the CCP to reunite Taiwan with the mainland,”

    That’s not what this is about. We are trying to prevent China from developing a high tech economy. In any case, our actions make war with Taiwan more likely. We are pushing China toward nationalism. (It was already headed that way, but we are making it worse.)

    Winston, You said:

    “After reading many of these posts from the UK, I think you could summarize Scott’s entire blog from 2010 to present in just a few words:”

    LOL. Obviously you have not been following my blog, as these are not my policy views. To be a successful troll, one must first identify the target. Otherwise you look like a fool.

  21. Gravatar of George George
    19. October 2022 at 13:06

    I notice the site owner did not actually explain how anything Winston said is wrong or how, LOL. Just flat out denial.

    By my research, what Winston wrote is correct.

    The one thing liberals don’t like is when their views are merely described or cited. It’s why ‘Libs of Tik Tok’ account, that only reposts videos of crazy liberals, is attacked.

    In other news, the best defense against covid is to be fully unvaccinated.

  22. Gravatar of George George
    20. October 2022 at 04:15

    If Lake wins (assuming Democrat cheating is sufficiently reduced), AZ children will be safer.

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