The best books on Economic Nationalism

We’re going to talk about economic nationalism through time. It seems to have become relevant in recent years with Trump’s protectionist measures, Brexit, China’s increasing focus on its internal economy. The dream of a frictionless global economy is not on the horizon. It is possible to define economic nationalism, at least broadly speaking, and is one epoch’s economic nationalism different from another’s?

I think it’s obvious that economic nationalism and the ideas that define it have asserted themselves in different ways throughout history. And you can say that each of those periods is unique and that they all contributed something to the broad system of economic nationalism. I think that is the only way to look at the development of an idea or an ideology, as a cumulative process. So

If I simplify things a bit, around the mid-17th century we start getting a much more distinct definition of what constitutes a state. And then, as a consequence of broader developments in Europe, this leads to views about the state which are based on a nation and a distinct territory. Thinkers and others then begin to say that, inside a certain territory, people have common characteristics that make them different to others. That notion then gets married to an ambition for the state, which is also somewhat different than it had been in the past. The state now starts to have greater ambitions for controlling what goes on inside its own territory. And that is when economic nationalism first starts to form itself, essentially as an offspring from a broader discussion about the forming of nations, the forming of the modern state, and new concepts for how these states should relate to each other.

There’s a lot more added to the idea of the nation state, the idea of nationalism, in the 19th century, and that leads to new views about economic policies. All those German philosophers that were working within the German historic school in the 19th century, they weren’t just philosophizing about the essence of nations or the essence of being German. They were also talking about how you need to arrange the economy in order to make it fit with their idealised view of how a state is supposed to work. Think about someone like Johann Gottlieb Fichte. He wasn’t just one of the leading philosophers behind German nationalism, he was also an economic thinker. The title of one of his books, The Closed Commercial State, pretty much says it all, how he and others of his ilk thought about the economy as part of a broader vision of nationalism. You can even say that—and perhaps I am exaggerating a bit here—that there is a link between that book and Trump’s The Art of the Deal.

And then, of course, comes the First World War and the consequences that followed, leading to another period of new thoughts and practices in the spirit of economic nationalism. Many policies then are exactly those that we would associate with economic nationalism today. High levels of trade protection against other countries, for example. Or the forming and use of national currencies and broader macroeconomic policies in a way that treats the economy and economic relations with other countries as a zero-sum game. It’s either we win or they win. So we need to arrange our system in a way so we can benefit at their expense.

“Economic nationalism, like nationalism, is inseparable from state power and the hunger for it”

At that time, and perhaps more importantly, you have the rise of the modern progressive state, with the birth of the welfare state and a growing role for trade unions. That gradually leads to labour markets and capital markets becoming a bit more closed than they were in previous eras, leading to a lot more protectionism and greater barriers to trade with other parts of the world. And not just on goods, we get a general market protectionism that often is about protecting the supposedly unique characters of those national markets.

To jump from that period to more recent times, we’ve seen an old-new kind of economic populism in America and other parts of the world. For some decades we got used to thinking that economic populism was more about the leftist style of politics in Latin American countries from the 1960s. But now economic populism has become more of a creed on the political right.

Perhaps it’s difficult to pin down economic nationalism and make it a unique idea in itself. It is directly linked to protectionism and mercantilism. Others have different views, but my conclusion is that we need to look at economic nationalism in the same way as we look at nationalism. Economic nationalism is an offspring from nationalism, not from textbook thinking about the economy and what is best for prosperity. And that means the core idea of nationalism is equal to the core idea of economic nationalism as well. Just because you want to raise tariffs on other countries’ goods, that doesn’t necessarily make you an economic nationalist—a protectionist, yes, but not necessarily an economic nationalist.

It’s the same with currencies. I don’t want my mother country, Sweden, to join the euro, but that doesn’t make me an economic nationalist, because the reason I don’t want Sweden to join has nothing to do with me finding the Swedish currency unique, or it representing values that are unique to Sweden. It’s more to do with my thinking that the pricing of Swedish factor markets would be incorrect under the euro and it would lead to imbalances in the economy.

Would you say that Donald Trump was an economic nationalist?

Yes, I think he was. He ticks all the boxes of being a protectionist, being a populist, and being a nationalist. In his rhetoric, and in his motivations for policies, you could clearly see that notion that there was something special about America’s own economic structures. There was something that made American companies, American labour, American capital markets unique because they were American, not because they were more efficient, or because they produced outcomes that were better than you find in other countries. So I think there was a distinct nationalist element in his economic policies. But he also laid out a populist version of the economy, that broader, anti-establishment, anti-elite element, where there’s no individual agency. Where, if you’ve ended up in a position that wasn’t economically beneficial to you, if you lost your job, or you couldn’t pay all your bills, it was someone else’s fault, and that might be the elite swamp in Washington, DC or the Mexicans or the Chinese who you think stole your job.

Let’s move on to the books. First up is Eli Heckscher’s Mercantilism, which was, I think, published in the 1930s, originally. Tell us about this book and why you’ve chosen it.

I like this book partly because it’s economic history written in the way economic history should be written. It’s not one of those boring tracts of economic history that is full of agricultural production statistics in various small localities around the world 300 years ago. It’s a book that tries to tell the larger story about how Europe changed from the 17th century onwards. And I think that’s also what makes it a bit unique. Before it was published, mercantilism was often seen as the set of policies you would go to if you had the same problems that they had at that period of time. So there was a logic to mercantilism. There was a problem and a policy was devised to address it, and that policy was mercantilism.

And Heckscher didn’t agree with that view of mercantilism?

No, Heckscher didn’t really agree with that view and rather thought of mercantilism as a broader societal system, an economic practice that was built on broader ideas about how the state and how society should work. That is what connects it to economic nationalism. Mercantilism can be seen as the first cut of economic nationalism. And mercantilism, of course, arose when many countries in Europe were trying to define what was unique about their own national culture, and were thinking about how to build a state around that culture. What Heckscher says is that, if you go through mercantilist economic policies—the fear of foreign goods, for example, or the strong desire to increase your balance of payment surplus and hoard gold—all of that was part of a unitary system. These policies were integrated parts of a larger notion about power, the state and how the state should function. And I think that that is what made Heckscher’s book unique at that time.

I should also say that many people have criticized Heckscher for his treatment of mercantilism in history, and I don’t think his book should be seen as the final answer to what defines mercantilism. But he opened up a new discussion around mercantilism, which I think was very helpful. So if you want to understand economic nationalism, Heckscher’s book is a good start. Economic nationalism isn’t just a few economic policies that one or several governments are playing around with. It’s rooted in an idea of how you want to organize society and the state and—not to forget—the subjugation of the individual to the state.

He’s looking at the 17th century, but he’s also writing it in the late 1920s and 1930s when there was an increase in mercantilist thinking or policies. Is the book, as a result, very much a book of his time, as well as being historical.

That’s very much the debate that emerged after this book was published. It came out in the 1930s. And a bit more than 10 years later another seminal contribution to the idea of mercantilism was published by an American economist called Jacob Viner. He was pretty close to Heckscher, both ideologically and in treating mercantilism not just as an economic theory or as an economic policy, but as part of an idea of how you obtain and manage political power. Viner, perhaps more than Heckscher, was influenced by contemporary politics. He wrote it just after the Second World War, and his idea of mercantilism reflected the emerging conflict between the free market democratic West and the Soviet Union. In a way, Viner could see the use of mercantilism as part of American foreign policy.

Heckscher didn’t like what he was seeing in the 1920s and the 1930s, but I think his intention, and the way that he was influenced by contemporary thought, was to try and save Adam Smith‘s critique of mercantilism, especially from the type of German economic thought that developed in the 19th century and which had been a lot more positive towards mercantilism. They had actually treated mercantilism in the same way as Heckscher, as part of a broader idea of society and the state—but, obviously, giving it a much more positive gloss.

Heckscher started out as a political conservative, but gradually became an economic liberal. He gradually took on many of the ideas that Adam Smith had outlined, especially around the notion of a harmonious economic system, this idea that you can actually have peaceful economic relations between different interests and different people, between companies and between countries.

The Wealth of Nations is a great anti-mercantilist tract…

Absolutely. The Wealth of Nations is first and foremost a book against mercantilism.

How does Smith deal with the issue of the nation? Does he just make the classic argument that free trade is of benefit to all sides, and therefore, effectively, concerns about the preservation of national character are an irrelevance, because trade is a way of preserving peace and benign relationships within countries and between them. Is that roughly how he would look at it?

Yes. He shared that with other Scottish Enlightenment philosophers who took a bottom-up view of society, basically assuming that an ordered society can be spontaneous and varied, rather than unitary and planned. But I wouldn’t say that Smith had a larger theory about nationalism or internationalism and he doesn’t challenge what I would say is the core plank of economic nationalism, namely nationalism. That is partly because nationalism wasn’t a fully developed idea in his time. Smith and others were more preoccupied by mercantilism and how it led to bad economic practices through imperialism and colonialism.

Adam Smith is one of the first economic anti-colonialists, one of the first to make a strong economic case against British imperialism and keeping the colonies. Smith was pretty good at demonstrating that the British Empire and imperialism were actually an economic cost. They didn’t benefit the welfare of Britain. But I don’t think he laid out an alternative vision of what society would look like without empires. He wasn’t a nationalist.

Let’s move on to Elie Kedourie’s Nationalism. Tell us a bit about his background and what this book adds to the story.

Kedourie was one of the first thinkers to really lay out what ‘nationalism’ was. Before Kedourie, and even since, academics have often treated nationalism either as a response to certain events, like broad technological developments and some version of modernity, or as something natural, almost God-given. Kedourie sets out a core, ideas-based definition of nationalism and describes how it grew in very special political circumstances.

This book is very much a history of ideas. It’s centred on this period in Germany, in the late 18th and 19th century, when many thinkers were working in the spirit of Immanuel Kant and his notion about individual self-determination and self-emancipation. Post-Kantians took those concepts into thinking about Germany and German society, and other European societies as well, especially France. And they came close to developing an idea about nationalism, which is basically the idea of nationalism that we have around us today. When we talk about nationalism, the way we define it, it basically comes down to how Kedourie defines its birth and growth in this period. It comes back to this idea that an individual can only become free, can only become himself or herself, if he or she is part of a natural collective, and that natural collective is the nation; a society itself can only be free if it is formed as a nation.

The state constructs to which many belonged to before the age of nationalism were often empires and sprawling kingdoms, and there were strong roles for non-nation institutions like the Catholic Church, which was much more internationalist than nationalist. Basically, what these nationalist thinkers wanted to do was to come up with an organic, metaphysical idea that freedom is only possible if you are part of a nation. If you’re not part of nation, you cannot be free, you cannot be yourself.

And is Kedourie highly critical of that? Does he set out to rubbish that or just describe it? To what extent is he sympathetic to it?

He’s not sympathetic to it at all. He’s very much against it, he’s very much against nationalism, not just as an idea, but as it manifested itself in many type of policies at the time when he was writing, which was from the 1950s to the 1980s. He had an interesting background himself. He was an Iraqi Jew, born in Baghdad. He later came to the UK, attended an Alliance française school and became a British citizen—so not exactly the CV of a nationalist. He was a famous professor at the London School of Economics and one who wasn’t afraid of courting controversy. He was the bête noire of those in the post-war and post-independence period who were sympathetic to nationalism, perhaps not in Britain but in the Arab world.

“At the heart of economic nationalism is the belief that our economic behaviour expresses an inherited cultural essence that is unique to us”

Kedourie actually did his dissertation at Oxford, but it was refused by some leading historians at the time who thought he was too critical of Arab nationalism. From then on Kedourie held grudges against people behind what he called “the Chatham House version” of the Middle East, the conventional wisdom at the time that this part of the world needed a good dose of nationalism and everything bad there was a consequence of the British empire. I think you can say that Kedourie appreciated the British Empire, partly because it prevented this nasty dynamic that you can get when you found nation states and start to develop nationalist thought. He wrote a lot about Arab nationalism and he wrote a lot about what he considered to be the mistakes of the British government and the British elite in supporting Arab nationalism. He was very much an anti-nationalist. I don’t think that comes through very strongly in his book, but it’s there, for sure.

What were the economic implications of his thinking? Were there particular economic issues at the time that he was writing in the 1960s and 1970s that fed his negative view of nationalism?

Absolutely. At the time when he was writing, and especially when he was researching this book, the economic consequences of independence in the Arab world, but also in Asia and Africa, had started to show. And it was already absolutely clear that the economic policies that followed nationalist sentiments, that to a large extent constituted the independence movement, basically led these countries into poor economic development. And they led to very difficult relations within and between states, even civil wars.

That was certainly part of his broader thinking. But, in the book, he doesn’t lay out specific economic policies. He talks about a pre-nationalism type of economic structure, especially in Europe, in the sense that, if some version of natural law existed, you had rights—also economic rights like property rights and indemnity rights—regardless of under what king, empire or nation-state you lived. These were obligations that every ruler had to obey. You had competing systems of contract law. And you weren’t forced to work just with one set of law because you were in a territory where one state had established a dominating legal philosophy.

What is far more important in Kedourie’s book is his definition of nationalism. It is, in all its complexity, a notion about how you can only be and become free and become yourself if you are part of a nation, that you can only be natural in your essence, as an individual, as long as you are part of a greater whole, a nationally and culturally defined state. Without that, the individual is nothing—she is just lost. And this is, in my view, also the essence of economic nationalism—it’s the idea that the economy cannot work unless every economic agent is part of a nationally defined economic structure.

And in that spirit, I would say that economic nationalism, like nationalism, is inseparable from state power and the hunger for it. The economic nationalist strives for economic sovereignty and is hostile to becoming economically dependent on others—that is, relying on others for the supply of goods and services, capital, technology and human talent. At the heart of economic nationalism is the belief that our economic behaviour expresses an inherited cultural essence that is unique to us. Without it, we would be unfree and no more than servants to a foreign master.

Let’s move on to Adam Tooze’s The Deluge.

This book is about the inter-war period, the twenty years between the two world wars—and in the academic book market, that has been a pretty crowded space for a long time. There are a lot of good books but I like Adam Tooze’s book, partly because I like him as an historian. He’s written some really, really good books, like one, which came out before The Deluge, on the Nazi economy, called The Wages of Destruction. I’d say that this is one of the best economic history books of all time because he goes into depth about the forces of deflation and inflation and what really happened in the German economy leading up to the 1930s and the economic thinking of the Third Reich. The Deluge is different. It’s not just a European book. I think what Adam Tooze really wants to do with this book is to write America into the broad history of this turbulent inter-war period. One of the consequence of this period was that America emerged as the uncontested power. Europe couldn’t rival America anymore.

It’s an interesting period in many ways. It is the final nail in the coffin for European imperialism or having empires as an organising unit in Europe. We can have a debate about which empires fell at what time, but it’s certainly the case that the Dual Monarchy and the Ottoman Empire didn’t survive the First World War and its aftermath, and that nationalism became the guiding idea of Europe. France’s Third Republic also started its decline then. So this is a period when empires are falling and nation-states are constructed. And I think that’s interesting in itself for economic nationalism and its acceleration in the mid-war era. The book also covers the types of nationalism that started to grow in this period and where they came from.

One of the ironies, if you look at this period with our current views, is that perhaps the strongest political impulses for nationalism came from America and American progressives. This was the peak of progressive nationalism and one of its leaders, Woodrow Wilson, was also the US president that led America into the war and outlined an ambitious idea for liberal internationalism after the war. So the liberal order was, in a way, built on the primacy of nationalism. Wilson of course had internationalist aspirations but it’s quite often forgotten that of his classic Fourteen Points-plan that he took to the Versailles peace conference, nine were about nation-states and nationalism. He, himself, was much inspired by Giuseppe Mazzini, the Italian nationalist of the 19th century, who led the way in creating a united Italy. He had more difficulties with Bismarck and the German brand of nationalism, for obvious reasons, but, at the same time, he could see the benefits of it. And he had himself, as an academic before he became president, been a strong believer in the German bureaucratic system and wanted to take that unitary state order to America and break with the old factionalism and the philosophy of divided government that came from James Madison.

“We should acknowledge that progressivism can lead to pretty extreme forms of nationalism”

So, he was a nationalist, but he was also progressive. And after the First World War, nationalism gets a progressive character. The respectable form of nationalism that survives is by and large progressive. That’s what makes Tooze’s book interesting, this period’s discovery of new ideas and how they manifested themselves in new policies coming out in the inter-war period.

Nationalist economic practices get much stronger in this period. Many countries are increasing protectionism and raising tariffs, and one of the countries raising tariffs more than others, of course, is the United States. Especially after the collapse of the efforts to restore the gold standard, you get into a macroeconomic form of nationalism. Money and finance becomes a lot more organized around a notion of your own uniqueness and your own desire to control your own economic territory, in ways that couldn’t be done in the past, when there was a more internationalist monetary system.

As soon as you start to move away from the gold standard, you get into fiat money-types of structures, which lend themselves a lot more to nationalist political thought. And then, of course, this is the time when you start seeing the strong regulation of labour markets, when trade unions get a prominent role in economic policy and the national discourse, where everything from welfare states through to ideas of public works become strong. All this gradually leads to a certain type of economic nationalism, or at least an order with such influences. Countries start to protect the welfare state order from the intrusion of foreign impulses. And it’s probably that type of economic nationalism that has been the strongest in the post-war period—the desire to protect your workers and your capital markets against competition from abroad, because you think it’s something unique to your own local markets, and that it’s necessary for your own unitary idea of the state and how you control your own territory, that you have these highly regulated and protected markets.

That’s a very interesting point, because, of course, such ideas would be an anathema for many on the left in Europe and the United States today.

I think we need to acknowledge that economic nationalism has different origins, and one of the origins is progressivism. When you merge progressivism with a certain state culture, it’s quite easy to end up in political domains that are close to nationalism—or worse.

And also, remember that progressives like Gunnar Myrdal, who was a Swedish Nobel laureate in economics and an important figure in the UN system—and Woodrow Wilson and many others of a similar ideology—believed in eugenics. They believed in a notion that man was a raw material that needed to be formed or reformed, and national culture was one of the methods to do that. I think somewhere Wilson says that “men are as clay in the hands of the consummate leader”. For many of them, there were no clear boundaries between individuals and the state, no clear limit to what the state could do with individuals and to change human nature. The progressive discussion now is different, but the thought that there shouldn’t be limits for states to control individuals did have progressive origins. So we should acknowledge that progressivism can lead to pretty extreme forms of nationalism, and pretty extreme versions of how you think about man.

And what is the ‘Deluge’ in Adam Tooze’s book?

It’s basically the unstoppable force of America—an America which, prior to the First World War, was a highly isolationist country, navel-gazing, rather than interested in the rest of the world. But it makes a new entry into the world in the inter-war period. In a very short period of time, it got a lot richer than all other countries. Around the 1860s America wasn’t, economically speaking, much larger than Britain or any other of the great European powers. But then, before the First World War, it was far richer than any other great power. And, of course, after the First World War, that gap had grown much larger. And in 1944, with the Bretton Woods Conference and the coming end of World War Two, it’s obvious that there is no European power that is remotely close to America in terms of money and power.

Let’s move on to Harry Johnson’s Economic Nationalism in Old and New States. Tell us about this one. What are the old and new states?

The new states are mostly states that were formed as a consequence of independence movements in Africa and Asia. And many of those, after independence, went almost immediately towards types of economic policies that were highly protectionist and led to the growth of power-hungry states.

Nationalist sentiments tended to be strong in many of the colonies and the countries that were under Britain, France, the Netherlands and Portugal. So, one of the first things many nationalists wanted to do after independence was to take back land and capitalist property that was owned by foreigners. They wanted to nationalise industries that were big and had, up to then, been organized in order to serve the interests of a foreign power. Many of the new leaders wanted—pretty much immediately—to cut a lot of the economic ties that they had with their colonial masters. They quickly entered into a type of economic paradigm that was closer to economic nationalism than anything else. Some of them were inspired by the Soviet Union. Others were not. But all of them tended to move into policies that led to high trade barriers, bans on foreign direct investments and the nationalization of industries. They were driven by the desire to have state control—or to take back control, to coin a phrase. They wanted to demonstrate that power was now in the hands of others.

And is this the story that Harry Johnson tells?

Yes, Johnson didn’t like any of this. He wrote in academic prose and, being an economist, he liked to use algebra, so none of his writings were very direct. Where he was unique is that he changed the way many economists think about economic protection. Part of that is related to the developing world, but it was also about protectionism in the developed world, in ‘old states’. He was very against the Keynesian demand-management consensus that had developed after Keynes and his General Theory, not least the whole theory of optimal tariffs and what was called the ‘second-best’ solution to manage national demand problems by trade policy. He said somewhere that the “second-best policies are usually recommended by third-best economists working for fourth-best politicians.”

Johnson thought that Keynesianism took on a life of its own after Keynes’s death and became a lot more macroeconomic; a lot more supportive of balance-of-payment policies; a lot more focused on trying to control the business cycle with different policies that lead to fairly strong interventions in different markets, through industrial policy, through labour market protections, through stop-go monetary policy, or by other means.

And what Harry Johnson did, together with others, was to open this field up for a new way of thinking about money, macro and trade that we now take for granted—a lot of what we now think of as the natural way to look at how the economy works. That wasn’t at all natural in the ’50s and ’60s, during the heyday of the Keynesian consensus. At that time, the World Bank and many other institutions that later become associated with American-style free market policies were far more excited about the economic model in the Soviet Union than they were about America. They were far more excited by command-and-control types of economic policies.

Harry Johnson basically showed how this didn’t work and how the world of actual economic integration had moved away from the type of world that underpinned the Keynesian view of international economic exchange. He was the one who started thinking about the role of multinational firms in international trade, thinking about intra-firm and intra-industry trade. He showed how border protections caused ripple effects in domestic markets, how they distort domestic markets and lead to bad allocations of investment and labour in domestic economies. That was his contribution to thinking about economic nationalism. He demonstrated how that progressive consensus emerging from the 1920s, developing and getting stronger through the Keynesianism paradigm, needed to change.

And those are the issues covered in this book?

Yes, it’s in there. But there are also contributions from others. It’s not just Harry Johnson writing there. He didn’t write many books, he mostly wrote papers. There is a story about him, that for every flight he took—and they were many since he was a professor both at Chicago and the LSE—he drank a bottle of whiskey and wrote one paper. But he did edit a lot of books. This is a conference volume. It also includes people taking a positive view on economic nationalism.

Johnson’s book came out in the late 1960s. Finally, let’s move on to a more recent book, from 2018. This is Barry Eichengreen’s The Populist Temptation. What is the populist temptation? Tell us about this book. 

Eichengreen starts in the world of Trump and is very clear about his intention in writing this book. This is a book trying to demonstrate why Trump-style populism is wrong. The basic message is that populism can be tempting because it is indifferent to reality, it creates an imaginary world. And this is, of course, a general problem in economic nationalism, the actual economic reality has to be changed to fit with the nationalist concepts.

“Populists are good at spotting grievances, but very bad at proposing policies that actually address them”

This book has chapters and analyses about Trump’s policies and rhetoric, but Eichengreen touches on several moments of modern history to try to demonstrate the perils of populism and what really happens when you turn to populism. He covers everything from Mussolini’s Italy to Argentina under the Kirchners and Brazil under different populists.

Does he have a common thread to unite the causes of populism, or a common thread to counter the threat of populism? What’s his take on the phenomenon?

Well, I think what makes him interesting is that he helps us to form a better understanding of populism, and especially economic populism. It is basically economic populism that he writes about. That’s his forte.

You can see the connections to other books that I’ve recommended, like Heckscher’s Mercantilism, or Adam Tooze’s treatment of nationalist economic policies in the inter-war period. He shows that populists are good at spotting grievances, but very bad at proposing policies that actually address them. You cannot be an economic populist unless you are good at searching people with a grievance and freeing them from guilt. That exculpatory part of populism is what it’s all about.

Eichengreen is a progressive economist himself, just like Tooze. He looks at periods of history when politicians have had some degree of populism to their character, but have devised policies with a clear effect on the problems that they wanted to address—for instance, Franklin Roosevelt and the New Deal. He points to anti-establishment rhetoric and populists’ very simplistic idea of economic policy, which is that you can redistribute away a problem. So, you can address inequality by—if you’re more of a leftist populist—taxing the rich and giving the money to the poor. Or, if you’re like Trump, you can focus on policies where, implicitly, you are blaming other countries and other people for your own economic misery. Trump’s view of what’s wrong with the American economy is basically about blaming others for it—it’s the fault of immigrants, or it’s the fault of the Chinese or those Mexicans that have been stealing jobs. Trump’s standard line was that other countries have taken advantage of America.

Eichengreen is very good at showing that indifference to reality. It is as if they’re living in a fantasy world, with very simplistic notions about solving problems and where solutions do not require trade-offs or involve any other risks. So you can actually say that you’re going to solve inequality by taxing the rich and giving to the poor without acknowledging that, if you’re taxing the rich, you may also create a long-term problems, like reducing the tax base and having much smaller tax revenues in the future. So there may not be much to redistribute. Trump’s version of populism is, for instance, that you can close borders and that won’t have any effect at all on consumer prices, on firms being able to import, on jobs. This, of course, is pure imagination.

And does Eichengreen point to an obvious ‘solution’ to this populist phenomenon? Even if populist solutions are unrealistic, that doesn’t mean the problem isn’t real and that populism isn’t a real phenomenon that needs to be addressed. Does Eichengreen grapple with that at all?

Yes, he does. I think Eichengreen is pretty progressive in his political views. So he comes out pretty strongly in favour of different types of market and redistributive policies, but ones that are adjusted to the real world. He’s closer to being a Rooseveltian, New-Deal-type of person, who thinks that many of the economic problems that are confronting America can be addressed by smarter government policies.