Why Economic Patriotism is rising since the coronavirus pandemic?

As we manoeuvre our way through this deadly pandemic, the inherent emotion of standing in solidarity with the state and a sense of rallying around the flag somehow sows the seed of Economic Patriotism within us. 

Even though globalization, as we know, peaked in 2008 and it's been steadily declining ever since, its main pillar, which is global trade, has also been in retreat. But the coronavirus pandemic has acted as a catalyst and accelerated this trend. Even if these changes are subtle and takes longer to pan out, some of the visible falling out has already been seen in the form of US-China trade war. Some people blame Donald Trump's rather aggressive stance against China for this fallout, but the truth remains that it was inevitable and was just a matter of time. It would have happened with any American president in office, though not in the same intensity. China has been calling Donald Trump as the worst US president ever, nevertheless. For now, the world has been engulfed by COVID-19, and the situation has gone from bad to worse. Both countries are unofficially in a cold-war era. Even the otherwise subdued Europe with leading economies like Germany, France etc, have openly criticized China for its "cover up of the coronavirus transmission". Australia hasn't been mincing its words either.

If we think about it, the rise of nationalism in some way, is attributed to the failure of the liberal society to weave its narrative around the significant advantages people have enjoyed over the years in the backdrop of economic liberalization and global trade, led by globalization. There has been a significant improvement in the livelihood and overall well-being of an average human being, especially in the developing economy due to economic liberalization. So much so, that some say the economic liberalization has been an instrument of improving livelihood in developing economies at the cost of the developed world. 

The idea that capitalism can flourish, with increasing income inequality in the developed nations by shipping jobs at the lower end of the value chain to developing countries is unsustainable. While unemployment in the developed nations rise, it has been an utter failure and a ticking time bomb, waiting to explode. This time, it seems to have finally gone off with the spreading of coronavirus pandemic. Americans have begun to imagine the dystopian world where a few will control all the wealth and in the name of capitalism will keep shipping jobs to low-cost countries. Both democrats and republicans have been opposing this trend, really vociferously of late.

The evidence of the world looking inwards, is very evident. In United states there is a special narrative being peddled by Donald Trump resulting into a slogan of "Make America great again". Even the democrats are in the same boat for economic self-reliance. Both democrats and republicans have bipartisan consensus on making China accountable for the spread of the virus and re-shoring industry and jobs back to the US. It is their version of economic patriotism which 'Elizabeth Warren' has been very vocal about. 

In China, on the other hand economic patriotism have taken a different form. The Chinese middle-class consumer, who was till recently one of the biggest consumer of US brands and luxury products have started boycotting it and are shifting towards local, home grown brands, while the Chinese government has been aggressively pursuing "Made in China 2025". In Europe, there have been calls of more self-reliance in strategic industries like technology and pharma etc. Indian PM recently talked about making India self-reliant, while addressing the nation on economic package. He also said, India should take advantage as anti-china sentiment rages in India. Though Indian problem can be attributed more to its policy paralysis, which has prevented them becoming a manufacturing hub in all these years. At some level the slogan of self-reliance is nothing more than a 'feel good factor' but it does cater to the domestic audience's sentiment.

Now, let's understand why this COVID-19 pandemic has accelerated and, in some cases, aggravated this whole concept of 'Economic Patriotism'? The answer lies in the fact that China has become a very important part of everybody's life with its size and scale. It produces majority of the products humanity consumes on a daily basis, even this year China is organizing the Canton fair completely online to cater to the world demand. Any disruption in China send shock waves throughout the world and that is precisely what happened. The pandemic not only created a disruption in China when it was discovered at a wet market in the city of 'Wuhan', but subsequently choked the supply chain of the entire world. Later, the virus spread in the whole world and alleged reports indicated China was trying to suppress the information in its initial stages. Chinese citizens travelled to other parts of the world, while the foreigners in china at that point in time also got infected before flying back to their home countries, which led to the rampant spread of the virus throughout the world. The double whammy of being faced with the deadly virus and the economic travesty has caused people and governments throughout the world to panic and blame China for its irresponsible actions. Much of the world have realized their over dependence on China, which has been there since a long time but this sudden disruption has laid bare the malaise. They think China has deliberately plunged the world into darkness and the trust is running thin.

This phenomenon has also helped the political leadership of various nations to bring in more controls and a kind of authoritarianism is creeping in throughout the world. They find this a perfect opportunity to increase influence and suppress the rights and freedoms of people. For example Donald Trump recently threatened social media platforms of actions for censoring his tweets. People on the other hand, understanding this being an unprecedented time of crisis are happy to follow along with the belief that they have to rally around the flag. In this moment of crisis, this is how their country is going to become stronger and fight the external enemy. Thus, it is safe to politicians and leaders throughout the world have also been responsible for an increase in this 'Economic Patriotism'. United States and India are good examples of countries peddling economic patriotism.

This pandemic has led to a widespread realization that countries need to be self-reliant at a certain level, to shield themselves in case of such disruptions. Even if they have to rely on supply chains outside their shores, it should rather be in a responsible, stable and democratic part of the world where they have bilateral strategic interests. Going forward this phenomenon will rise further and the 'Economic Patriotism' throughout the world will thrive for some time both at a political and social level.

Conclusion:

Economic Patriotism is an emotional call, stoked mostly by strongmen leaders, who want a certain message of strength and self-reliance to go to their domestic audience. In fact, economic patriotism has historically hasn't achieved much and have weakened economies and had adverse impact on its people. On the other hand, most of the development in the lived of common people have comes as a result of liberalization and globalization. The free movement of resources and people have resulted in the world economy exploding into a historically new growth phase, which was never seen before. Unfortunately, for globalization, the time is to recede and economic nationalism to take over.