Nationalism and Neoliberalism
Supporters of free market economics
have always been ambivalent towards nationalism. In an important book called Nation, State and Economy (1919),
the leading Austrian neoclassical thinker Ludwig von Mises argued that it was
natural for human groups, who shared a common language, to adopt national identities,
although these need not be coterminous with state boundaries, as the example
of the Germans showed.1 Given the practical difficulties of establishing a world state to oversee the capitalist system, nation-states were as good a basis for establishing the necessary legal framework for economic activity as any other; but when nationalism was used to mobilise popular support for state activities which impeded the competitive operation of the world market, then it became a danger to economic rationality, as understood by representatives of the Austrian school. Nationalism as the mobilising principle with which to establish a free economy was acceptable to them; nationalism as collective interference in the free economy was not.
Neoliberalism follows neoclassical economics in relation to nationalism, as in so much else. Neoliberals tend not to describe themselves in these terms, but as supporters of globalisation, which they assume has to be capitalist in character. Turn to any of the contemporary works which extol the benefits of this process and we find nationalism indicted for an extensive litany of crimes, including making militarist threats to peace, erecting protectionist barriers to free trade and expressing racist hostility to migrants. The movements for an alternative globalisation which emerged in Seattle during 1999 are routinely accused of wanting to prevent third world development for selfish nationalist reasons.2 Yet
if we look beyond the rhetoric of neoliberal publicists to the behaviour of neoliberal
politicians and state managers we find a different attitude towards nationalism.
As David Harvey has noted, the neoliberal state needs nationalism of a certain sort to survive.3 To understand why, we need to be clear about what neoliberalism is.
The Consequences of Neoliberalism
By neoliberalism I mean those interlocking economic
and social policies that have become the collective orthodoxy since the mid-1970s.
Although the following list is by no means exhaustive, any attempt to catalogue
them would include: flexible labour markets, deregulation of financial markets,
removal of protective tariffs and subsidies on essential goods, privatisation
of state-owned industries and utilities, commodification of services once provided
free at the point of use, and the shift from direct and progressive to indirect
and regressive taxation. These have been adopted by states, including the remaining
few that claim to have superseded capitalism, of which China is incomparably
the most important, and by transnational institutions like the World Bank and
the World Trade Organisation, which police international development and (in)stability
in the interests of the global order. The emergence of neoliberalism as a conscious
ruling class strategy, rather than an esoteric ideological doctrine, took place
in response to the end of the post-war boom in the 1970s, but in changed conditions
created by that boom: above all, the unprecedented expansion of international
trade, the advent of cross-border production in order to utilise world forces
of production rather than those of one territorial state, and the creation of offshore banking
and flows of money capital unlimited by national boundaries. More than any other
development, this last one made government policies vulnerable to attack when
they were seen to be acting against the interest of capital. Unlike factories,
money can be moved and is not dependent on protection of a territorial state
or states. States had not become completely powerless in the face of markets,
of course that is the myth of globalisation cultivated by politicians
seeking to shift responsibility for neoliberal policies onto supposedly great
impersonal forces over which they had no control. Neoliberalism represented
a choice, but it was a choice increasingly difficult to avoid so long as the
goal was the continuation and expansion of capitalism at all costs.4
Neoliberalism has not succeeded in reducing either poverty or inequality; but far more fundamentally, from the perspective of the international capitalist class, it has failed in terms of the system itself. It has not recreated the conditions for capital accumulation which existed during the Great Boom. Above all, it has failed consistently to increase the rate of profit. To the extent it has intermittently done so, it has not achieved rates comparable to those between 1948 and 1974.5 Accumulation
has come to rely on increasing productivity on the one hand (making fewer people
work harder) and decreasing the share of income going to labour on the other
(paying workers less in real terms), but that is not physically sustainable indefinitely.
Furthermore, the suppression of real wage levels, notably in the UK and USA,
has encouraged the very dependence on borrowing which has now entered crisis.
Far from this being a means of consumers to add to their possessions as moralistic accounts imply it
has been driven by their need to maintain personal liquidity through loans, mortgages,
credit, overdrafts and the rest, precisely to meet the costs of the ultra-commodified
world neoliberalism has created. But an economy which requires systemic debt
to maintain expansion is scarcely in a healthy condition. The real success of
neoliberalism has been to transfer wealth and resources to the ruling class and
its hangers-on. There are, however, limits to this process. The opportunity provided
by opening up the hitherto closed Stalinist economies was a once-and-for-all
operation. Similarly, there is a limit to how far wealth can simply be transferred
from the public to the private sector; for ultimately this is simply relocating
existing money and resources within the system. But capitalism can only survive
through expanding production, not mere personal enrichment.
The Necessity for Nationalism in the Neoliberal Order
Nationalism is the necessary ideological corollary of capitalism. The capitalist class in its constituent parts has a continuing need to retain territorial home bases for their operations.6 Why?
Capitalism is based on competition, but capitalists want competition to take
place on their terms; they do not want to suffer the consequences if they lose.
In one sense then, they want a state to ensure that they are protected from these
consequences in other words, they require from a state more than simply providing an infrastructure; they need it to ensure that effects of competition are experienced as far as possible by someone else. A global state could not do this; indeed, in this respect it would be the same as having no state at all. For if everyone is protected then no-one is: unrestricted market relations would prevail, with all the risks that entails. The state therefore has to have limits, has to be able to distinguish between those who will receive its protection and those who will not. But the state cannot simply be the site of particular functions, with no ideological attachment; capitalists have at least to try to convince themselves that what they are doing is in a greater national interest, even if it is plainly in their own. Without some level of self-delusion, mere gangsterism will result. Therefore, when Liah Greenfield describes the spirit of capitalism as the economic expression of the collective competitiveness inherent in nationalism itself a product of its members collective investment in the dignity and prestige of the nation,
she is turning history on its head.7 It
is the collective competitiveness of capitalism, expressed at the level of the
state which requires nationalism as a framework within which competitiveness
can be justified in terms of a higher aspiration than increased profit margins.
If Britain or for that matter, Scotland is
to be collectively competitive then this obviously means that individual British
(or Scottish) companies must be individually competitive, but they are in competition
with each other as much as with foreign rivals. In the course of this competition
some will fail. Their failure, however is a contribution to national survival,
comparable, perhaps, to the sacrifice of soldiers in the field: competition is
the health of the nation, just as war was once held to be the health of the state.
Nationalism does not simply unify territorially demarcated sections of the bourgeois
culture; it plays an equally important function for capital in fragmenting the
working class. Georg Lukacs once pointed out that one of the ways in which the
bourgeoisie tries to prevent workers achieving coherent class consciousness is
by binding the individual members of those classes as single individuals, as mere citizens, to an abstract state reigning over and above them.8 But
it cannot be an abstract state; it has to be a very concrete, particular
state founded on a sense of common identity. For the working class, nationalism
arises from two sources. One is from the spontaneous search for a form of collective
identity with which to overcome the alienation of capitalist society. National
consciousness is therefore an alternative to class consciousness, but is rarely
a complete alternative, since reformism is effectively the means by which nationalism
is naturalised in the working class. But the other source is the deliberate fostering
of nationalism by the bourgeoisie in order to bind workers to the state and through
the state binds them to capital.9 Hence
the absurdity of claims by Tom Nairn that what the extra-American world
should fear is not US nationalism but the debility of the American state,
as if the nationalism was not the means by which the American state mobilises
popular support behind imperialist adventures like those in Afghanistan and Iraq.10
The application of neoliberal policies over the past thirty years has increased
the alienation and atomisation which is the normal condition of everyday life
under capitalism, but it has also done more. Capitalism needs a human being who has never existed, writes Terry Eagleton, one
who is prudently restrained in the office and wildly anarchic in the shopping
mall.11 But precisely because these
human beings do not exist, because the economic and the social are not as separate
in life as they are in academic disciplines, the anarchy, the emphasis on self-gratification,
self-realisation, and self-fulfilment through commodities has tended to permeate
all relations, with uncertain consequences. In the face of the resulting social anarchy and nihilism, Harvey notes, with perhaps excessive restraint, some degree of coercion appears necessary to restore order.12 Unchecked,
the future will be as foreseen by George Steiner at the fall of the Berlin Wall:
a combination of repression and commodification, The knout on the one hand;
the cheeseburger on the other.13 But repression on its own will not produce the degree of willing acceptance which the system requires.
In these circumstances nationalism plays two roles: it provides a type of psychic
compensation for the direct producers which is unobtainable from the mere consumption
of commodities, and it acts as a means of recreating at the political level the
cohesion which is being lost at the social. It is no accident that the nationalist
turn in the ideology of the Chinese ruling class became most marked with the
initial opening up to world markets in 1978 and the suppression of the movement
for political reform in 1989, which was followed by a patriotic education campaign;
the general tone of which continues to this day, as in different ways Taiwanese
and Tibetans have discovered to their cost.14 Britain
is in no position to criticise the Chinese in this respect: two of the most disgraceful
statements to have been made by Gordon Brown from an admittedly crowded field are
that we should stop apologising for the British Empire and that British jobs
should be the preserve of British workers.
Problems of Blowback
The division into national territories
has always helped to allocate where the devaluation or destruction of capital
occurs, as one set of state managers attempt to protect their own capitals from the pressure of global crisis at the expense of other sets attempting the same. This occurs most sharply in cases of actual military conflict: In an age of mass politics all interstate wars are nationalist wars, conducted in the name of nations and purportedly in their interests.15 But
war is scarcely the only, or even the most common form of geopolitical rivalry.
Edward Luttwak describes the new rivalries as geo-economics or warfare by other means; In it, investment capital for industry provided or guided by the state is the equivalent of firepower; product development subsidised by the state is the equivalent of weapon innovation; and market penetration supported by the state replaces military bases and garrisons on foreign soil as well as diplomatic influence. These are not simply analogies. As Luttwak notes, war may be different from commerce, but evidently not different enough; In particular, an action-reaction cycle of trade restrictions that evoke retaliation has a distinct resemblance to crisis escalation that can lead to outright war.16
But what Luttwak calls the adversarial attitudes mobilised by states
can of course escape the control of those who initially fostered them. Ian Kershaw
suggests that one of the reasons the Japanese military elite were forced into
the Second World War was that it had encouraged levels of mass chauvinism and
expectations of military-territorial expansion from which it could not retreat
without provoking popular hostility: the generals were trapped in a prison of
their own devising.17 Norman Stone argues
more generally that the First World War could not have been brought to a negotiated
end by the end of 1916 no matter what the politicians and generals may have wished,
because the nationalist hatreds they had encouraged, now amplified by the deaths,
injuries and destruction, had acquired their own momentum and called
forth leaders committed to victory.18 But similar outcomes can be found in the neoliberal era. Gowan has argued that Conservative hostility to the EU, now inherited by New Labour, is inexplicable at purely policy level, given the neoliberal programme upon which EMU (Economic and Monetary Union) is designed to institutionalise and to which all British parties are committed. But because the neoliberal reforms have so singularly failed to rejuvenate the British economy, other than by enriching a new rentier class, it would be exposed to competition which would reveal underlying weaknesses that neoliberalism was supposed to have corrected. Resurgent imperial nationalism was unleashed for the purposes of defending one version of the interests of national capital, but now prevents British politicians and state managers from pursuing any other strategy, however rational from their perspective.19
But there is another danger for ruling classes too, namely that neoliberal nationalism
will lead to the fragmentation of neoliberal states. Harvey writes: Margaret Thatcher, through the Falklands/Malvinas war and in her antagonistic posture towards Europe, invoked nationalist sentiment in support of her neoliberal project, though it was the idea of England and St George, rather than the United Kingdom, that animated her vision which
turned Scotland and Wales hostile.20 But would the hostility of (some) Scottish and (some) Welsh people have been less had Thatcher conveyed a sense of Britishness rather than Englishness? Gordon Brown is currently trying to do the former, with no real success. The difficulty here is a deeper one. Because nationalism is such an inescapable aspect of capitalist development, the first response to intolerable conditions is to seek to establish a new nation-state, although this is usually only possible where some level of national consciousness already exists, as it does in Scotland. In other words, neoliberalism may require nations, but it does not require particular nations.
Alternatives to Nationalism?
In spite of the risks, however, it is
not clear what could replace nationalism as a means of securing even the partial
loyalty of the working class to the capitalist state and preventing the formation
of class consciousness. (Football doesnt quite do it although it sometimes appears to be one of the candiates). Early on in the neoliberal era, Raymond Williams noted that a global system of production and trade also required a socially organised and socially disciplined population, one from which effort can be mobilised and taxes collected along the residual but still effective national lines; there are still no effective political competitors in that.21 In
many ways, nationalism took over the role of religion as the heart of a heartless world and it is not clear how the latter could reclaim that role. The resurgence of religious belief is real, although not extensive enough to roll back all the achievements of secularisation, and it is almost everywhere subordinated to local nationalisms. And there is a further difficulty. One ideological aspect of the War on Terror has been a revival of a pre-Marxist or vulgar Enlightenment critique of religion, focussed on the supposedly backward nature of Islam. For this critique to carry any credibility, however, it must be extended to all religions; hence the appearance of books with titles like Against all Gods, The God Delusion and God is not Great.
My point here is not the absurdity or moral bankruptcy of highly paid establishment
intellectuals like Richard Dawkins and Christopher Hitchens posturing as heroic
opponents of religious tyranny, but the fact that there is a division within
bourgeois thought on the subject of religion which makes it unusable as the principle
means of achieving ideological cohesion.
Could loyalties be transferred upwards to a global or even regional state? Montserrat
Guibernau has argued that the European Union will ultimately require European national consciousness to
give coherence to the otherwise uneven group of nations which comprise that body.22 But
as Benedict Anderson writes, in themselves, market-zones, natural-geographic
or politico-administrative, do not create attachments. Who would willingly die
for Comecon or the EEC?23 Nor could
loyalties easily be transferred downwards to individual capitals. It has been
known for workers to support their company, even to make sacrifices to maintain
it in business. But this tends to happen where these are local, well established
and where workers are employed on a long-term basis. Where workers make sacrifices
in terms of job losses, worsened conditions and as happened in the USA during the 1980s actual cuts in pay. They do not do so because of loyalty to the firm, but because they see no alternative that does not involve the even worse fate of losing their job entirely. Individual managers or team-leaders may internalise the ethos of McDonalds or Wal-Mart, but workers cannot: the reality of the daily conflict between themselves and the employer is too stark to be overcome. Beyond this, even those companies which still retain health insurance and pension arrangements come nowhere near providing the integrative functions of even the weakest nation-state. It is of course possible for workers outside a company to celebrate its achievements but
only because it is national.24
Neoliberalism is a reorganisation of capitalism and, like all forms of capitalism, it needs both the territorial nation-state form and the ideology of nationalism. For Scots, perhaps closer to the establishment of a nation-state than at any time since 1707, the point is of extreme importance. There are many reasons, including Trident, Afghanistan and Iraq, why no-one should lift a finger to preserve the British imperial state; but that is a tactical consideration. If the argument of this article is correct, then forming a new nation-state will not in itself relieve the pressures that make that option an attractive one. In social terms, the minority SNP government is operating close to the limits of reformism, largely in order to build an electoral base at the expense of the Labour Party.25 The
limits are set by its adherence to the neoliberal economic agenda and they will
be reached very shortly. When that happens, regardless of whether Scotland is
in or out of the UK, we would do well to remember that, ultimately, nationalism
of any sort is to paraphrase a slogan of 40 years ago part of the
problem, not part of the solution.
Neil Davidson is a Research Fellow with the Department of
Geography and Sociology at the University of Strathclyde. He is the author of The Origins of Scottish Nationhood (2000) and Discovering the Scottish Revolution, 1692-1746 (2003), and co-editor (with Paul Blackledge) of Alasdair MacIntyres Engagement with Marxism: Selected Writings,
1. Available on-line from the Ludwig von Mises Institute at http://www.mises.org/nsande
2. See, for example, M. Wolf, Why Globalization Works, New Haven: Yale University Press (2002), pp. 36-38, 98-99, 122-126.
3. D. Harvey, A Brief History of Neoliberalism, Oxford: Oxford University Press (2005), p. 84.
4. D.Harvey, From Managerialism to Entrepreneurialism: The Transformation in Urban Governance in Late Capitalism, Geografisaka Annaler, 1989
5. R. Brenner, The Economics of Global Turbulence: the Advanced Capitalist Economies from Long Boom to Long Downturn, 1945-2005, London: Verso (2006), p. 268.
6. C. Harman, The State and Capitalism Today, International
Socialism, second series, 51 (Summer 1991), pp. 32-8; B. Anderson, The New World Disorder, New
Left Review, I/193 (May/June 1992), p. 6; Harvey A Brief History of Neoliberalism, pp. 35-6.
7. L. Greenfield The Spirit of Capitalism: Nationalism and Economic Growth, Cambridge, Massachusetts: Harvard University Press (2001), p. 473.
8. G. Lukacs, Lenin: a Study in the Unity of his Thought, London: New Left Books (1970), p. 66.
9. N. Davidson, The Origins of Scottish Nationhood, London: Pluto (2000), p. 7-46; Reimagined Communities, International
Socialism, second series, 117 (Winter 2007/8), pp. 158-60.
10. T. Nairn, Terrorism and the Opening of Black Plutos Door,
in Tom Nairn and Paul James, Global Matrix: Nationalism, Globalism and
State Terrorism, London: Pluto (2005), p. 233
11. T. Eagleton, After Theory, London: Allen Lane (2003), p. 28.
12. Harvey, A Brief History of Neoliberalism, 82.
13. G. Steiner, The State of Europe: Christmas Eve, 1989, Granta 30, New Europe! (1990), p. 131.
14. See, for example, C. R. Hughes, Chinese Nationalism in the Global Era, London: Routledge (2006).
15. M. Beissinger, Nationalisms that Bark and Nationalism
that Bite: Ernest Gellner and the Substantiation of Nations, in J. A. Hall (ed), The State of the Nation: Ernest Gellner and the Theory of Nationalism, Cambridge: Cambridge University Press (1998), p. 176.
16. E. Luttwak, Turbo-Capitalism: Winners and Losers in the Global Economy, London: Weidenfeld and Nicholson (1996), p. 128.
17. I. Kershaw, Fateful Choices: Ten Decisions that Changed the World, 1940-1941, London: Allen Lane (2007), pp. 105-6, 380.
18. N. Stone, World War One: a Short History, London: Allen Lane (2007), p. 97.
19. P. Gowan, British Euro-solipsism, in Peter Gowan and Perry Anderson (eds), The Question of Europe, London: Verso (1996), pp. 99-103.
20. Harvey, A Brief History of Neoliberalism, p. 86.
21. R. Williams, Towards 2000, Harmondsworth, Penguin (1983), p. 192.
22. M. Guibernau, Nationalisms: the Nation-State and Nationalism in the Twentieth Century, Cambridge: Polity (1996), p. 114.
23. B. Anderson, Imagined Communities: Reflections on the Origin and Spread of Nationalism, Third Edition, London: Verso (2006), p. 53.
24. Greenfield, The Spirit of Capitalism, p. 483.
25. N. Davidson, Scotlands New Road to Reform?, International
Socialism, second series, 118 (Spring 2008).