On Nationalism

From Dani Rodrik’s Straight Talk on Trade:

My starting point is that markets require rules and that global markets require global rules. A truly borderless global economy, one in which economic activity is fully unmoored from its national base, would necessitate transnational rule-making institutions that match the global scale and scope of markets. But this would not be desirable, even if it were feasible. Market-supporting rules are nonunique. Experimentation and competition among diverse institutional arrangements therefore remain desirable. Moreover, communities differ in their needs and preferences regarding institutional forms. And history and geography continue to limit the convergence in these needs and preferences.

A few things worth pointing out:

  1. the market is not a natural phenomenon — it requires rules (at the absolute minimum, contract law) and institutions to enforce those rules. The idea that the market is somehow prior to the state is a myth.
  2. there are a number of different structures that can support economic growth. And, moreover, those structures are context-specific — what works in one place may not work in another.
  3. differences in culture, history, and geography are yet another reason why a single approach won’t work. Different societies may, for example, approach the trade-off between economic dynamism and stability in different ways. And that is fine — see (1) above.

This bit from Isaiah Berlin’s Nationalism essay shows why the cultural differences from (3) aren’t likely to go away:

The need to belong to an easily identifiable group had been regarded, at any rate since Aristotle, as a natural requirement on the part of human beings: families, clans, tribes, estates, social orders, classes, religious organizations, political parties, and finally nations and States were historical forms of the fulfillment of this basic human need.
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