The President of the United States, Donald Trump, is proposing a new wave of tariffs and restrictions. Economic Nationalism has come to the US.
While these policies may seem new to Americans, we Latin Americans have seen them for years.
80 years ago, in the 1930’s, the President of Mexico, Lázaro Cardenas, introduced economic nationalism to the country by nationalizing oil.
He thus created a massive revenue stream for the government, while cutting out the influence of British and American oil companies. In Chile in the 1970’s, Salvador Allende’s populist socialist policies led to high inflation, economic chaos and culminated in the coup d’état by General Augusto Pinochet who then enacted orthodox reforms. Economic nationalism in Venezuela saw an enormous upsurge under Hugo Chávez and Nicolás Maduro. After the American-backed coup temporarily deposed him in 2002, Chávez became an even greater opponent of “savage neoliberalism”, fighting harder than ever for economic nationalism.
Though the underlying issues are undoubtedly complex and variable, politicians who use political populism will use economic nationalism when they have more to gain than to lose by using it, the determining variables being the ability to function without neoliberal economics and weakness of a political opposition.
Economic nationalism weakens the political and economic elite, strengthening the relative power of the populist politician.
The tragedy of economic nationalism repeats itself over and over again.
Cuba in the 50’s
Chile in the 70’s
Argentina in the 2000’s
There is only one way economic nationalism ever ends – economic collapse.
Either by accident or by careful planning, Trump is bringing textbook economic nationalism – to the United States.
Latin America is moving past such destructive policies, as seen in reforms in Colombia, Peru, and Venezuela.
The US and Europe are marching in the wrong direction.