Economist's View: Patriotism, Nationalism, and Economic Policy

Mark Thoma:

When we think about issues such as immigration and international trade, how important should "cosmopolitan" influences be? Should we ever place, say, the elimination of poverty in underdeveloped countries above our own interests, or is our duty always first and foremost to ourselves? There is a theory that says pursuing our own interests indirectly maximizes the interests of everyone -- the metaphor of an invisible hand is used to illustrate this -- but the conditions for this result to hold aren't always present.

I recently said:

while I think the US should consider the welfare of other countries when implementing policy..., the Fed has made it clear that's not how it operates.

So I think that, when formulating economic policy, our concerns ought to extend beyond our borders. That's not to say that the interests ought to be weighted equally, so I'm not "cosmopolitan" in that sense, but I don't think the weight on external concerns ought to be zero either. I would give it meaningful weight. But not everyone agrees. For example, As Alan Krueger says with respect to immigration policy

There are no simple answers on immigration policy because different people can legitimately assign different weights to the welfare of new immigrants, recent immigrants, and various groups of natives.

This is not a new debate. It is expressed here in terms of immigration, but it is easy to generalize the arguments to economic policy more generally:

Greg Mankiw and Brad DeLong talk about libertarian, egalitarian, and cosmopolitan explanations for why economists do or do not support immigration. Here's Brad's post:

Greg Mankiw Explains Why Economists Favor Immigration: He does it very very well:

Greg Mankiw's Blog: Why Economists Like Immigration: With members of the House and Senate sparring over immigration reform, it is worth summarizing why most economists are sympathetic with the more welcoming approach of the Senate bill.

The study of economics leaves a person with two strong impulses:

The Libertarian Impulse: Mutually advantageous acts between consenting adults should, absent externalities, be permitted. The ability to engage in such trades is how people in free-market economies achieve prosperity. When the government impedes voluntary exchange, it prevents the invisible hand of the market from working its magic.

The Egalitarian Impulse: The market economy rewards people according to supply and demand, not inherent worth. Markets often fail to provide people the ability to adequately insure themselves against the vicissitudes of life and accidents of birth. We should, therefore, look for ways to help those who end up at the bottom of the economic ladder.

Most economists feel these two impulses to some degree. The difference between right-leaning and left-leaning economists is how strongly they feel each of them. Right-leaning economists have a stronger libertarian impulse, whereas left-leaning economists have a stronger egalitarian impulse.

Although some debates in economics come down to which impulse a person feels more strongly, on immigration the two impulses are reinforcing. The libertarian impulse says, let the American employer hire the Mexican worker, for it is voluntary exchange. The egalitarian impulse takes note that the Mexican immigrant is the poorest person involved in the situation, and he benefits from more relaxed immigration restrictions.

Here is a conjecture: Whenever a policy appeals to both the libertarian impulse and the egalitarian impulse, economists will offer a relatively united view, as they do on the topic of immigration.

I would add a third impulse: the cosmopolitan impulse. Economists tend to think that foreigners are people, and thus that their well-being counts. From the economist's point of view, increasing immigration is a hell of a powerful global economic development policy. The most you can say for restricting immigration is that it is an extremely costly and relatively ineffective domestic anti-poverty policy.

Greg says the libertarian and egalitarian impulses, "are reinforcing" and that is why "economists ... offer a relatively united view ... on immigration."... I would qualify this discussion slightly along Brad's lines. It depends upon your utility function, and that is another way to frame the impulse to support, or not to support, immigration. If you are a person, economist even, who cares deeply about the poor anywhere in the world irrespective of borders, the benefits of low-skill immigration will look quite different than they will to someone who believes our allegiance is to our own poor and our own citizens first and foremost. From a policymaker's perspective, what should U.S. policy address, the welfare of poor anywhere in the world which may represent the preferences of constituents, or should U.S. economic policy attempt only to maximize the welfare of U.S. citizens?

What do you think? What does "patriotism" require? I like the older definition of patriotism better than the one that equates it with nationalism ("devotion to the common good, rather than pure identification with a nation-state"), but how it's defined is part of the issue.

I've been extremely disturbed by the, at times nonsensical, rhetoric of one of my Republican opponents in my State Senate race.  At one point Todd Hilton stood up at a forum in a Walton County and said, "ladies and gentlemen, the Federal Government has a gun to your head."

 

Look, just become I thought the Bush tax cuts would shift massive amounts of government revenue into the hands of the top 1%--which they used to further inflate the housing bubble that has devastated working people across this nation and balloon the deficit--doesn't mean the Federal Government had a gun to my head. Ditto the Iraq war part deux. 

 

I didn't win that policy debate at the polls.  That's not a conspiracy, its the democratic process.  Its quite offensive to use that type of hyperbolic rhetoric when all over the globe people literally have guns to their head.  The tea party is full of passionate people that literally have basic, and I mean basic, facts about our economy wrong.  Yet their shockingly uneducated rage will have a major impact at the polls on election day--especially here in the south.

 

Patriotic fervor has taken to the streets.  The demos is overflowing with pathological "patriotic" rage at the Federal Government (we are the government so that means its self directed rage).  If thats what you mean by patriotism I want nothing to do with it.  Give me Edmund Burkiean patriotism over this tea party nonsense any day of the week. 

Posted via email from Jim Nichols