Neoliberal Globalization and Nativist Protectionism Explained

The Pros and Cons of Neoliberalism and Protectionism

We explain neoliberalism, globalization, nativism, and protectionism and the pros and cons of “neoliberal globalization” and “nativist protectionism.” First here are some basic definitions of each so you can understand each term and how they fit together to create these two dominate modern left-right ideologies:

• Neoliberalism: An economic ideology that fuses classical liberal deregulation, with social liberal Keynesian economics, and a globalist mentality. Its not classically liberal, its not social liberal, its not social policy, its not economic policy, it is parallel a mash-up of all these things. It favors a global, integrated, capitalist economy in either a left-wing form or right-wing “neocon” form.
• Globalization (AKA Globalism): Global economic, cultural, and political integration between nations.
• Nativism: The favoring of a native population.
• Protectionism: In this respect, the favoring of a nation in trade deals (not to be confused with an “isolationist” anti-trade stance or “isolationist military stance). It favors “X nation first” in a global economy.
• Neoliberal Globalization: The modern global left-wing ideology that mashes up business interests and social ones generally taking a socially liberal, globalist, and pro-trade stance. Like Obama or Merkel.
• Nativist Protectionism: The modern global right-wing ideology that mashes up business interests and social ones generally taking a nativist, nationalist, and protectionist stance. Like Trump or Brexit.

TIP: Just to make life confusing, one should note that “neoliberal globalization” is a sort of “third way” and so is “Nativist Protectionism”. Neither is fully Free trade and neither is a fully Protectionist. Historically in America Republicans have always favored Protectionism and Democrats have always favored Free trade. However, things really changed over the 20th century due to progressivism, America’s role in the world, and the rise of technology. This is further complicated by the vastly different stances on global trade between Trump supporters (protectionism), libertarians (free trade), progressives (fair trade), and neoliberals (neoliberalism). This is also complicated by the aforementioned’s thoughts on cultural and political integration. See: United States Trade Protectionism: Institutions, Norms, and Practices Symposium: The Political Economy of International Trade Law and Policy.

TIP: Speaking loosely and in terms of America, what we call Libertarians and Progressives tend to have “mixed views”. Libertarians typically favor global integration, but not state-based economics, progressives tend to favor both aspects of protectionism and “fair-trade” over “free-trade”. In other words, we are describing general global stances, but individuals and groups tend to have “mixed” stances in practice.

TIP: A major aspect of the neoliberal globalist platform is one of cultural and economic integration, trade, and immigration like we see with the E.U. or NAFTA, another is military integration like we can see with NATO. As one might note from looking at the global politics of 2016-2017, there is a global pushback against these aspects of globalization. In this world-wide (especially in the West) conversation, negative factors like terrorism and the loss of jobs to technology get conflated with the positive aspects globalization. As a response, many neo-Nationalist groups have arisen en masse, arguably something not seen since post-WWI.

TIP: The main issue of contention of America’s founding factions, the Federalists and Anti-Federalists, was essentially an argument over Neoliberal Globalization (Federalists / North) and Nativist Protectionism (Anti-Federalists / South). This conversation related to national banks, to tariffs, to military policy, to the Monroe Doctrine, and even to our Constitution and Bill of Rights. It was THE main issue at the heart of national and world politics, which makes sense, as it’s the issue at the heart of economics too.

Imports, Exports, and Exchange Rates: Crash Course Economics #15. A good starting point for the topic.

TIP: Neo = an Evolution of, or a parallel version (so not new, and not an evolution, but a related type that isn’t the same). So neoclassical economics is built off of classical economics but is not classical economics. Neoliberalism is built off classical liberalism and social liberalism but is not classical liberalism or social liberalism.

TIP: Learn more about the birth of classical liberalism, the birth of modern classical economics, and the related birth of modern merchant and international banking. If you are confused about these terms, see the definitions below or our page on How to Understand Political Jargon Related to Globalization.

What is Neoliberal Globalization?

“Neoliberal Globalization” describes the globalist ideology of neoliberals. A mixed-market socioeconomic policy, that pairs global trade with deregulation, and is focused on globalization (global economic, cultural, and political integration). It isn’t pure mercantilism, and it isn’t pure free-market, it isn’t pure classical liberalism, and it isn’t pure social liberalism, it isn’t pure neoclassical economics, and it isn’t purely Keynesian. It is a MIXED left-leaning ideology focused on globalization.^{[1][2][3][4][5][6][7][8][9][10]}

TIP: Neoliberal Globalization can also be described as global liberalism or when speaking just in terms of trade and economic policy, global economic liberalism.

What is Nativist Protectionism?

The counterpart to “Neoliberal Globalization” can roughly be described as “Nativist Protectionism.”

The term “Nativist” describes the favoring of a given nation’s economy, people, and culture, and protectionism or, in this case, “trade protectionism.” It focuses on creating policies designed to improve a given nation, even at the cost of international relations. It aims to “get the big banks out and bring jobs back home.”

Brexit was a vote for Nativist Protectionism, and Trump is a Nativist and Protectionist. Likewise, NAFTA is a neoliberal trade deal, and the Clintons are (progressivism and social liberalism aside) neoliberal and globalists.

Ha-Joon Chang on IMF, WTO, World Bank and Protectionism This video explains the relationship between classical liberalism, social liberalism, neoclassical economics, Keynesian economics, and neoliberalism.

TIP: Roughly speaking, the term neoconservative describes a neoliberal in the conservative party. In practice this means, a social conservative who is economically part neoliberal, but often errs toward nativist protectionism. Because the position mixes neoliberalism and nativist protectionism in trade, and because we are already covering both those concepts, we won’t focus on it here. Reagan, Thatcher, and Bush are neocons, which is not a fully nativist protectionist position, but is more-so than the pure neoliberal position.

“General Secretary Gorbachev, if you seek peace, if you seek prosperity for the Soviet Union and Eastern Europe, if you seek liberalization: Come here to this gate! Mr. Gorbachev, open this gate! Mr. Gorbachev, tear down this wall!” – Ronald Reagan. Bill Clinton was called a Reagan Democrat; Reagan was a Clinton Republican. In both cases, classification is based on their mixed-market economic policies. They are neoconservative and neoliberal respectively.

A Few Types of Neoliberalism and Protectionism

Typically both of the above types come in a few “flavors”: 1. Focused on economic issues like deregulation, passing trade deals, and new-liberal economics. 2. The radical and progressive kind focused on social issues. These would be social progressives who want more humane trade deals or are focused on native workers’ rights, and social conservatives who tend to want to bring the jobs home and are focused on increased tariffs and eliminating trade deficits.

Neither type typically focuses on “pure” anything; sociopolitical ideologies of large groups are necessarily complex. We are describing general ideologies of groups, not specific ideologies of individuals.

Dr. Carlos A. Torres: Neoliberalism, Globalization Agendas and Banking Educational …… A lecture from Canada.

Did you know? Canada is the United State’s biggest trade partner. U.S. goods and services trade with Canada totaled an estimated $662.7 billion in 2015. Exports were $337.3 billion; imports were $325.4 billion. The U.S. goods and services trade surplus with Canada was $11.9 billion in 2015. Learn more from the Office of U.S. Trade.

FACT: Neoliberalism originated as a slang term to describe liberals who mix classical liberal views with social liberal views, especially regarding deregulation, trade, and economic policy. If we consider ideologies that include neoliberalism, neoconservatism, and other similar ideologies like “the third way” along with other ideologies that promote versions of global new classical and new Keynesian economics (new neo-classical synthesis), then we can say this group has dominated western politics since the 1980’s.

TIP: The IMF recently published an interesting article called Neoliberalism: Oversold? While it may have been oversold in some circles, the general reaction to the TPP and the confusion over bodies like the markets, the Fed, the EU, and the IMF itself hints that there is a bit of underselling out there.

What is Neoliberalism

Neoliberalism describes a political ideology focused on mixed-market economic liberalism (a visible hand guiding the invisible one). The American Democratic Party is liberal, and we believe that there are two groups of liberals. One is composed of progressives like Bernie Sanders, who says “no” to TPP and wants to break up the banks. The other is the Obama and Clinton view that we need to embrace classical liberal principles to ensure the West remains a world economic and military leader.

Three Minute Theory: What is Neoliberalism?

“To renew America we must meet challenges abroad, as well as at home. There is no longer a clear division between what is foreign and what is domestic. The world economy, the world environment, the world AIDS crisis, the world arms race: they affect us all. Today as an old order passes, the new world is more free but less stable. Communism’s collapse has called forth old animosities, and new dangers. Clearly, America must continue to lead the world we did so much to make.” – Bill Clinton

What is Globalization

Globalization describes the process of integrating the world’s nations by focusing on economics, culture, and politics to bring prosperity and peace through a relationship of sharing wealth, knowledge, culture, credit, and debt. This is typically accomplished through trade and foreign policy, such as NAFTA, TPP, international businesses including banks, international investing, showing Hollywood movies in China and Korean Dramas in the U.S., and protecting Democratic and Republican ideals worldwide.

Neoliberal Globalization is the fair-trade or free-trade mixed-market global socioeconomic ideology focused on expanding the world’s economy, and ideally as a consequence, lifting up all nations and peoples.

TIP: Learn more about globalization and other like terms.

Globalization easily explained (explainity® explainer video)

“Integration of national economies into a global economy, that’s here, that’s done.” – Barack Obama^[11]

The Argument Against Neoliberal Globalization

Mixed-market economic policies including trade policies are designed by the rich including the major Western powers and tend to err toward their special interests and consolidate money into the hands of a few. This could corrupt democracy, hurt workers worldwide, and jeopardize the integrity of the trading republics themselves. Either fair-trade or protectionist policies are needed. Negative interest rates, the 2008 Global Financial Crisis, and the growing global wealth gap prove that this path is unsustainable.

Cronyism and monopolies and special interest on a global level can have major negative repercussions. A little deregulation there, a sweetheart deal here, and the nativists and protectionists say, “I told you so; they took our jobs.”

Of course, the worst result of all is what is happening in places like Syria where conflicting views on the future of world politics are coalescing into terror, proxy war, and human rights violations. We are not blaming an entity here; we recognize facts. The wish to avoid conditions of war and chaos are exactly why we want peace, trade and general stability moving forward. See What’s happening in Syria? From the BBC.

Neo-Liberalism: The Ideology behind Contemporary Globalization

Naomi Klein on Global Neoliberalism.

Noam Chomsky Globalization and Neoliberalism FULL Speech + Q&A. If you feel as though progressives tend to be against neoliberalism more than conservatives, then you are probably right.

“Liberty is to faction what air is to fire, an aliment without which it instantly expires.” – James Madison

The Argument For Neoliberal Globalization

The counter-point to the wealth gap argument sums up the main selling point is that although the wealth gap is widening so is the quality of life of the poorest. So, for instance in America, the poor have less wealth than the wealthy, but all Americans have more wealth compared to people in some other countries. Today someone living in poverty might have regular meals, access to education, a cell phone, and a roof over their head at least some of the time. The goal would be to have upward mobility everywhere.

CNN – Obama on globalization.

The myth of globalization | Peter Alfandary | TEDxAix.

Globalization and the poor — a look at the evidence | Krisztina Kis-Katos | TEDxStuttgart.

“Foreign powers do not seem to appreciate the true character of our Government. Our Union is a confederation of independent States whose policy is peace with each other and all the world… The world has nothing to fear from military ambition in our Government.” – Polk describing how the point of Monroe Doctrine politics is to ensure free-trading republics and peace, not to just “hit people with a big visible stick” when they don’t play ball, as it sometimes comes off.

What is Nativism

Nativism, as noted above is simply the favoring of a native population. However, we don’t mean literal “native.” We mean perceived native. This might be white working class males in Britain and the U.S., especially Anglo or other specific groups. It could be natives of the nation in other places.

Nativism

TIP: Nativism can mean a few things like many terms on this page. A Nativist can be progressive, fighting against the Dakota Access Pipeline in America, or they can be conservative saying,  “drill baby, drill.” These two groups are in direct conflict ideologically, but are both nativists (although the term certainly fits one native group a little better than the other on a gut level).

“The bank is trying to kill me, but I will kill it!” The nativist populist protectionist social conservative Souther Democrat Andrew Jackson told Martin Van Buren in vetoing a bank recharter bill led by Henry Clay.

“Too-big-to-fail banks are a threat to our democracy.” – Bernie Sanders on Glass-Steagall and the dangers of special interest deregulation, showing how modern progressive social liberals can be protectionists and nativists too.

What is “Trade” Protectionism

Protectionism, in general, means protective policies, but, when we discuss globalization. It means “trade protectionism.” Policies that are focused on protecting the nation’s interests typically means protecting the nation’s workers and economy but is not limited to this.

The general idea is that instead of taxing the native population, tariffs, which tax imports, are used to make “shipping jobs overseas” and general “investing overseas” less attractive.

When a social conservative says “NAFTA is very bad” or “I’m going to bring jobs back home” or criticizes trading deals, immigration policy, or foreign policy that favor “others,” they are protectionist.

Arguments for Protectionism

“NAFTA is the worst deal ever. It has destroyed our country. We need to build a wall. Law and order. Climate change is conspiracy by the Chinese.” – Donald Trump was displaying the qualities of Nativism and Protectionism and being anti-progressive and anti-neoliberal.

The Argument Against Nativist Protectionism

The world’s vastness can be viewed as dangerous, or it can be viewed as presenting an opportunity to offer us a better global future. Not every country is going to be good at the same thing, have the same types of workers, the same expertise, or the same resources. Just as specializing in something makes you more competitive for a particular job, and just as the stock market and bank offer you a way to invest your income and help the national economy, a nation specializing, trading, and utilizing interconnected international banks and markets has the same effect for the world. Many would argue that this is a “net positive” effect.

The big drawback is that the world isn’t connected in a healthy way. Instead, we have at least two ideologies butting heads on the international stage. Under these circumstances, the “other” people will always be “others,” and we are more likely to have war than trade.

A little debt and credit go a long way; nothing is better for healthy international relationships than a little trade deficit and a little mutual investment in each other’s economies. We tend to see more of a positive outcome with mutual interest than with an investment protecting against military force or one focused on militaristic proliferation and hegemony.

Specialization and Trade: Crash Course Economics #2. The benefits of international trade in terms of specialization.

“As on the one hand, the necessity for borrowing in particular emergencies cannot be doubted, so on the other, it is equally evident that to be able to borrow upon good terms, it is essential that the credit of a nation should be well established.” – Alexander Hamilton

The Argument For Nativist Protectionism

Adam Smith’s invisible hand only works when people invest back in their nation. Sure, if we all see the world as “our global nation” then we all invest in the world, and all is well. If we aren’t “there yet” as a global entity, then special caution must be taken to protect not only our poorest, but the middle-classes, native groups of each nation, and even nations themselves.

At its most benevolent and mundane, nativist protectionist movements may promote fair-tariffs and fair-trade. I am willing to pay a little bit more to help fight against humans rights abuses and to help to ensure a good quality of life for our trading partners. The problem comes when nativism and protectionism take on an extreme form fueled by hatred and despair. There is a real danger in bubbles, the military aspects of ensuring trade, and wealth inequality contributing to that. As we know, nothing works well in extremes.

TPP: The Dirtiest Trade Deal You’ve Never Heard Of. A modern argument for protectionism and the TPP.

Why Do Countries enact Protectionism?. A modern argument for protectionism and the TPP.

Milton Friedman – Free Trade vs. Protectionism.

“A Bill of Rights is what the people are entitled to against every government, and what no just government should refuse, or rest on inference.” – Thomas Jefferson was stating a universal and timeless truth that can be seen in the Universal Bill of Rights of today. Neoliberal globalization can’t come at the expense of core liberal values. Balance is needed, as always.

1. New neoclassical synthesis
2. Neoliberalism
3. Neoconservatism
4. Globalization
5. The Pros And Cons Of Globalization
6. Neoliberalism: Oversold?
7. Even the IMF Now Admits Neoliberalism Has Failed
8. What Is ‘Neoliberalism,’ and How Does It Relate to Globalization?
9. Neoliberal Globalization: Is There an Alternative to Plundering the Earth?
10. Benefits of Globalization
11. Obama: Globalization Is ‘Here’ And ‘Done’