International Relations: A Beginner's Guide by Charles Jones

Author:Charles Jones [Charles Jones]
Format: epub
ISBN: 9781780743042
Publisher: Perseus Books, LLC

Nationalist Responses to Liberalism

The first impulse of liberalism is not to regulate at all. At its inception the great motto was Laissez faire, laisser aller, which may be roughly translated as ‘Let people do what they please and go where they please’. Coined by French economists in the eighteenth century, this phrase was soon adopted by anglophone liberals. But from the late nineteenth century forms of compensatory liberalism developed, in which states intervened in the economy to counter perceived shortcomings of the liberal project. Within their own territories this meant the creation of welfare systems to combat poverty, which was regarded as a recruiting agent for extremist political parties. Abroad, it took the form of international co-operation under US leadership to create a stable and prosperous world calculated to avoid any repeat of the sequence from global economic crisis, through nationalist response, to war.

By the middle of the twentieth century the policies associated with this late form of liberalism were, in reality, not so very different from those fostered by the self-consciously anti-liberal tradition that can be traced from the early decades of independence in the USA, through the process of economic integration that prefigured German unification, to the pooled economic nationalisms of the Global South. Most American states had retained high tariffs following independence for lack of other convenient sources of revenue. The USA went further, using its tariff to shield industry from global competition. Alexander Hamilton (1755 or 1757–1804) was a prominent economic nationalist in the young North American confederation, and the first man to hold the office of Secretary of the Treasury, from 1789 to 1795. Hamilton favoured state intervention to promote business, including the use of high tariffs to protect infant manufacturing industries. His political influence waned following the 1800 presidential election, but his ideas, notably in the 1791 ‘Report on Manufactures’, were to continue to influence US thought during economic downturns. The baton that fell when he died, in 1804, was taken up and ably carried by Henry Clay. Clay was the Kentucky lawyer who anticipated Mahatma Gandhi by more than a century when, in 1809, he proposed that members of the state legislature should wear homespun instead of imported British broadcloth. He went on, as a leading Whig, to advocate protectionist tariffs, state provision of physical infrastructure, and a national bank.

Friedrich List, a native of Württemberg who lived in the USA between 1825 and 1832, later maintained in his 1841 National System of Political Economy that only a large domestic market behind a protective tariff wall could hope to resist and ultimately match British strength in manufactured textiles and metal goods. His work helped justify the 1834–66 expansion of the German zollverein (customs union), much as Ricardo’s had legitimized the practical free trade politics of Cobden. By the end of the century the industrial success and economic growth of Germany and the United States were being widely imitated. Governments throughout Europe and beyond responded to downturns in the business cycle by raising tariffs and assuring themselves of exclusive access to sources of strategic raw materials.

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