Today in 1776, The Wealth of Nations by Adam Smith was published in London.
Liah Greenfeld, “Nationalism’s Dividends,” American Affairs, Summer 2019:
…economic nationalism originally took the form of mercantilism, which reigned in England and then Britain throughout the sixteenth and seventeenth centuries—remaining dominant until 1776, when Adam Smith published The Wealth of Nations. By that time, Britain was already the undisputed economic hegemon in whatever it counted as the world. It was this change in its position vis-à-vis its competitors that motivated a change in its economic thinking. Adam Smith suggested a new approach towards competition: free trade inside and out. This was not a matter of principle but of pragmatic consideration for him. Smith was a nationalist (which implied that he viewed the economy as a means to the greater good of national dignity or superiority); his support for the Navigation Acts indicated that he saw nothing wrong with protectionist trade policies so long as they served this purpose. But he was convinced that under the conditions obtaining at the end of the eighteenth century, the national interest would be better served by free trade.
Other nationalists understood the interests behind Smith’s argument. Some theoreticians in German universities of the early nineteenth century worshipped at the altar of Smithianismus and liberal economics—which became identified with Smith in no small degree due to their efforts. But the nationalist Friedrich List, a practical man, insisted that free trade promoted British national interests at the expense of nations with less powerful economies. His American friends fully agreed with him and made certain that the land of the free would stand fast against free trade until well into the twentieth century.
…within a matter of years, China will leave all other aspirants to economic superiority far behind, including those who currently enjoy it. It will simply be impossible for any Western power (each weakened by the disaffection of its elite and divided against itself) to overcome more than a billion Chinese, highly motivated and united in their national commitment. Only India might, perhaps, challenge this energetic mass in the future.
Under the leadership of China, economic globalization—the weaving together of disparate economies into one system—will proceed apace, as it is already. China will create ever more free trade zones, as it already does. It will insist on and wrench concessions from all its business partners. Its paramount objective will be to pursue its national interests, using its economic supremacy to maintain and increase its superior dignity and international prestige—and in doing so it will contribute to the prosperity of the world, while making the world dependent upon China.
To assert their independence and dignity vis-à-vis the Chinese colossus, some, like Russia, may throw even more of their energies into increasing their military capabilities, or into cultivating their arts and letters. But the only way to compete in the economic sphere will be to return to the original economic nationalism of protectionism and state intervention.
Unless, of course, China persuades other nations that doing its bidding is a win-win situation.