Assume for the sake of the argument that the run-of-the-mill nationalist’s expression “our national resources” is meaningful. These resources—physical resources, capital, talents, expertise, etc.—constitute a sort of “public good” belonging to, and to be consumed collectively by, the nation’s members, if not by “the Nation” herself.
Consider a first contradiction. Nationalists are usually mercantilist: they want “protection” against imports and maximization of exports—the largest possible trade surplus. But this means using “our national resources” to produce goods for foreigners (the definition of exports), and using state coercion (tariffs and other barriers to imports) to limit our fellow citizens’ consumption of the production from (output of) foreigners’ own national resources. The contradiction is obvious. To be consistent, nationalists should instead favor maximum imports and minimum exports.
A nationalist could offer the counter-argument that “we” export production from “our” national resources in order to be able to import the foreigners’ production from their national resources. If that is true, “we” would want the best terms of trade, that is, as much importation and as little exportation as possible. But why would “we” want to do this? Answering by invoking comparative advantage and the benefits of trade generates a second contradiction (this one more institutional than purely logical). For then, why would “we” limit imports to what our government’s political and bureaucratic geniuses think should and should not be imported and under which conditions? Economic freedom is generally more efficient than government planning and industrial policy.
What does “efficient” mean? Different schools of economic thought provide different answers: maximizing economic benefits measured in terms of money (mainstream neoclassical school); maximizing social welfare (welfare economics); favoring economic growth and prosperity (Adam Smith and classical economics); “increas[ing] the opportunities for any unknown person picked at random” (Friedrich Hayek); coordinating individual actions (see, for example, Robert Sugden, The Economics of Rights, Cooperation, and Welfare or, for the matter, Anthony de Jasay); realizing the common preferences of all individuals for the basic rules of social interaction (James Buchanan). The underlying ideal is to satisfy as much as possible the demands of all individuals, all being assumed formally equal. In international trade as in domestic trade, comparative advantage simply follows from free individuals (and their private organizations) producing what each can produce efficiently enough to find willing customers, in order to be able to purchase individually what they want at the lowest price available. Economic efficiency refers to the satisfaction of individual preferences.
A corollary of these individualist theories is that property of “our national resources” is held by individuals in severalty, as opposed to in commonalty (a legal term to mean “in common”). Otherwise, the principal-agent problem prevents the efficient use of resources on the Pareto frontier. (See Chapter 13 of de Jasay’s Justice and Its Surroundings.) What belongs to everybody belongs to nobody except the state.
Nationalism, on the contrary, refers to the satisfaction of the national collective, which means in practice its majority or a plurality. Nationalism is a form of collectivism. In reality, the satisfaction of a collective amounts to the satisfaction of the preferences of its rulers and their political supporters.
In a free society, “national resources” are private. (Exceptions for communal lands, streets, roads, and such can be justified, perhaps with a social-contractarian argument, but they would be exceptions.) Trade from the outputs of private resources is, at least in peacetime, freely open for individuals and their private organizations to conduct as they want.
******************************
Waiting in line to hug our national-collective tree, by ChatGPT and your humble blogger
READER COMMENTS
Jose Pablo
Jun 10 2025 at 2:21pm
The “national resource” that nationalists seem to value most is the aggregate demand of all American citizens.
Rather than seeing demand as the outcome of individual choices, they treat it as a national treasure, a source of “good” jobs, since Americans can be employed producing what other Americans consume.
If foreigners meet that demand, the logic goes, Americans lose jobs.
This is a kind of backward economics, where demand drives production, rather than production being determined by how effectively resources like labor and materials are used.
In this view, what limits output isn’t the capacity to produce, but whether there’s enough demand to justify it. It’s a model that explains a lot about economic narratives, if not actual outcomes. For instance:
When some consumer preferences aren’t considered “worthy” or “dignified” to produce, they must be discouraged or eliminated, take dolls, for example.
Demand, in this framework, must be “educated” to favor what producers are used to making. Demand becomes the slave of supply.
And if foreign countries dare to satisfy that demand, they’re seen as plundering a national treasure (“raping” the U.S. economy).
Some economists bear responsibility for this idolization of demand, especially those who elevated the GDP identity (often misread as: domestic production is driven by total demand – net imports, (a.k.a. “the part of our national treasure, stolen by the rapists”) over richer frameworks like production functions.
Warren Platts
Jun 10 2025 at 4:28pm
Indeed, that’s exactly the position of the American economic nationalists. But there’s nothing backwards about it. It’s the job of entrepreneurs to figure out how to satisfy that demand. To produce something for which there is no demand is the most ineffective use of labor & materials imaginable. As for the shaping of demand, isn’t that what advertising is all about? And yes, the trade deficit is a major concern because (among other reasons, like the associated debt trap) it represents an export of aggregate demand, thus slowing GDP growth rates.
(Yes, I know, sometimes trade deficits can be good for GDP growth rates when desired investment [defined as investment in capital goods that pays for itself] exceeds actually capacity to invest. But that is not what is happening now in 2025 USA, although that may have been the case 200 years ago.)
Jose Pablo
Jun 10 2025 at 9:04pm
Nobody owns my demand, Warren.
The very rationale behind American independence affirms my right to pursue my own preferences, whether domestically produced or otherwise.
Any individual whose preferences are to consume domestically produced goods and services is free, and most welcome, to do so.
Craig
Jun 11 2025 at 10:24am
You DO live in a country though where in Wickard v Filburn they ruled federal government has power to regulate the wheat you grow on your own farm, never leaves the farm, on the basis that the fact you grow your own wheat impacts aggregate demand for wheat. (Now I think that is an atrocity of a decision, but it is what it os JP!)
Jose Pablo
Jun 11 2025 at 10:47am
Yeah! … If the Founding Fathers could raise their heads and see us now!
And yet, that’s no justification for further deepening the subjugation of the individual.
In fact, the collectivization of American aggregate demand becomes all the more abhorrent the more one insists on treating it as a national asset.
Pierre Lemieux
Jun 10 2025 at 7:11pm
Jose: There is one confusion to avoid, though. What you say applies to the Keynesian concept of aggregate demand. In a free economy, demand (and what each consumer is willing to pay for) on each market determines what is produced. By looking at aggregate magnitudes, it is easy to forget this and, like our friend Warren, imagine collective entities (and their politician-angels) that don’t exist. I don’t think there is any serious social analysis outside of methodological individualism. This is why Marx was so wrong, and why the regime he promoted was so collectivist, protectionist, poor, totalitarian, and unlivable.
Craig
Jun 10 2025 at 3:55pm
“Exceptions for communal lands”
Of course that exception stands out because federal government is a very large landowner.
Pierre Lemieux
Jun 10 2025 at 7:13pm
Craig: Yes, in the West, communal land is the rule, private land the exception: a free society upside down.
Craig
Jun 11 2025 at 12:42am
In our system of land ownership all valid title must ultimately derive from a sovereign authority that had the power to grant the land in the first place. Most people don’t think of this but somebody sold you the land and so on until perhaps we go back to somebody who subdivided the parcel off of a larger one and so on back until ultimately you will hit the end of the chain and the end of that chain will be the ‘sovereign’ which of course can ultimately be quite a few governments actually as the case may be. I think you might not necessarily like that concept, but ultimately if that was not the case your chain of title would simply go back in time to Jim Bob saying it was his because he said it was his, right?
Pierre Lemieux
Jun 11 2025 at 6:10pm
Craig: Your comment raises fundamental questions to which a short comment cannot do justice. But here is, in short, what I understand.
Except if you adhere to “legal positivism,” which refers to a socialist-drifted or otherwise statist (à la John Austin or Hans Kelsen) system, I don’t think it is true that “In our system of land ownership all valid title must ultimately derive from a sovereign authority that had the power to grant the land in the first place.”
“At the end of the chain,” to use your terminology, I understand Friedrich Hayek as saying that what you find is the common law (custom, not command), at least its Anglo-American version. The common law is the result of the evolution of rules of just conduct (“just” in the sense of adjustment) capable of coordinating the expectations of individuals. It has nothing to do with a sovereign deciding who owns what. The book to read is Hayek’s Law, Legislation, and Liberty, especially vol. 1 (see my Econlib review).
This is not unrelated to William Pitt 1763 declaration:
With a different argument, you find in Anthony de Jasay a conclusion similar to Hayek, but more rationalist and radical. The argument is that private property must have logically been anterior to the state because otherwise a sovereign would not have found enough resources to steal in order to enforce his authority. A roving bandit in a Hobbesian state of nature could not have become a sovereign bandit. Chapter 1 of his Justice and Its Surroundings–titled “Who Gave Us Order?”–is enlightening for this purpose; I briefly touch on this point in my Regulation review.
James Buchanan’s strand of classical-liberal legal-constitutional theory reaches a conclusion coherent with the ones above. “Property,” that is, ownership protected by the state, and the basic rules governing property, are not created by a sovereign, but by the unanimous agreement of all individuals in a given society. Reading Buchanan’s The Limits of Liberty might help understand this.
In a sense that is not necessarily subsumed by so-called “natural law,” law is not what is decreed by some sovereign, but what is just: ius quia iustum, not ius quia iussum.
Craig
Jun 11 2025 at 11:52pm
Philosophically its one can hear similar tones in the primus movens arguments. Every cause has a cause until we get back to something that wasn’t caused, the uncaused cause, etc.
” It has nothing to do with a sovereign deciding who owns what.”
Ok, but then why is your individual claim superior to any other. Indeed I can foresee issues pertaining to overlapping claims.
If we go back in time to the beginning of the chain and that person conveys the property to a buyer by deed, the buyer should be asking, “On what basis do you have a valid claim to this property” because there’s not going to be a deed coming in from the previous owner here!
As much as its theoretically interesting, in the vast majority of instances the concept isn’t even remotely useful to even bother knowing with respect to real estate closings/transactions.
Warren Platts
Jun 12 2025 at 6:33am
Is there ever such a thing as squatter’s rights?
Craig
Jun 12 2025 at 9:37am
A squatter as we contemplate the term is simply a person pretending to have a tenancy. Of course there are 50 states involved I don’t know them all of course, a further wrinkle is also adverse possession which is usually a bit sifferent. But yeah owner shows uolp, somebody there, calls police, police show up, owner says these people don’t belong in there, the people say they do often have a forged lease. Cops don’t know one way from the other and say, “Figure it out in court”
My solution to that os to record leases like deeds. Nj uses to do that…..
Warren Platts
Jun 10 2025 at 4:04pm
Pierre, I respectfully disagree with this statement. I keep saying this, but mercantilism and protectionism are not the same thing. Yes, mercantilism seeks big, chronic trade surpluses in order to amass a bunch of foreign assets primarily by reducing the consumption share of the national income and through beggar-thy-neighbor trade policies. Consequently, mercantilism requires the mercantilist country to be deeply enmeshed in a global system of trade in order to import raw materials and export manufactured goods. Ideally, the global system includes many countries that hold dear free trade economic philosophies, as they are easy marks.
Protectionism of the American System sort expounded by Alexander Hamilton, Henry Clay, Henry Carey, up through Peter Navarro, does involve some trade interventions like tariffs that mercantilists also use, but the goal is neither trade surpluses nor the national specialization based on comparative advantage, as in the free trade model (except for things like tea & pineapples). Rather the goal is national self-sufficiency at least in sectors that are important to the national interest and the protection of high wages for workers. The latter is important for humanitarian reasons, but also because high wages provide ample aggregate demand that provides an incentive to invest in increased production and high wages also provide a powerful incentive to invest in labor-saving devices that improve productivity. Note that self-sufficiency does not mean the same as autarchy. Trade happens, but it is not emphasized willy-nilly. That is, trade should be reciprocal and approximately balanced.
Historically, protectionism was a reaction to both 18th century British mercantilism and Adam Smith’s nascent free trade philosophy. In an ideal world, free trade would be wonderful. But in the real world, the problem is the international system is anarchic. There is no international social contract between nations (still less between individual humans across borders, as lamentable as that is). Every attempt to establish a liberal, global order was and is always undermined by bullies, cheaters, and free riders. And in this world, there are countries that insist upon mercantilist policies, including a couple that employ the old 18th century version that viewed mercantilism as an important precursor for military adventures.
Thus economic nationalism, at least in the American version, is simply a defensive economic policy to not allow the USA to be exploited by the several mercantilist countries. Meantime, within the USA’s borders, trade should be as free as possible, with minimal regulations.
Pierre Lemieux
Jun 14 2025 at 10:49am
Warren: You are right that a mercantilist is necessarily a protectionist but that a protectionist is not necessarily a mercantilist. Even admitting this, however, your thesis contains at least two fundamental errors:
(1) The claim that even if no individual can feel “exploited” by an exchange he may decline, their collective can be.
(2) You write, “Protectionism of the American System sort expounded by … up through Peter Navarro, does involve some trade interventions like tariffs that mercantilists also use, but the goal is neither trade surpluses…” The mention of Peter Navarro irremediably vitiates your argument. Since people of his ilk want to eliminate all bilateral trade deficits but not eliminate trade surpluses (consider the laughable “reciprocal tariffs”!), it does mean that they aim at a global trade surplus for their collective.
Mactoul
Jun 11 2025 at 11:59pm
Yes, common law of a particular people. A people that had managed to conquer all the other people and dispossess the other people and their law. And this conquering and dispossession took place by the armed might of a sovereign and not by lawyers and judges. They came after when the enemy was vanquished and the territory pacified.
Mactoul
Jun 12 2025 at 12:31am
Rationalist and radical and utterly wrong.
The error yet again comes from a total neglect of political boundaries that lets you ignore the existence of rival peoples. The people your people have to fight in order to have any property in the first place.
Pierre Lemieux
Jun 12 2025 at 2:05pm
Mactoul: One problem is to imagine “peoples” when one sees rulers. There is no scientific explanation of society without methodological individualism. Hayek’s 1946 article “Individualism: True and False” (reproduced in his Individualism and Economic Order), can help understand this. (A version I haven’t checked is available online.)
Mactoul
Jun 12 2025 at 11:55pm
Well Adam Smith did write The Wealth of Nations and not Wealth of Individuals. And American founding documents do refer to We the People.
Methodological individualism, as the term itself implies, is a method to address certain problems. It is necessarily agnostic as to existence of other levels of human organization.
Analogously, the physical scientists employ methodological naturalism which is again agnostic as to existence of supernatural entities and causation. See writings of Father Jaki.
Pierre Lemieux
Jun 13 2025 at 11:57am
Mactoul: Do read Hayek. Besides the article cited above, his The Counter-Revolution of Science: Studies on the Abuse of Reason is enlightening. Stanley Jaki seems interesting (notably in his reflections on Gödel) but irrelevant to the methodology of social studies.
Comments are closed.