Adam Smith vs the Ultra-Nationalists
Parties like Marine Le Pen’s Rassemblement National are not "moving Left" on economics, a deep suspicion of liberalism is where they've always been
Regular readers would be aware of my absolute disdain for the Left-Right spectrum. Given the economic and social revolutions that we’ve been through in even just the last 3 decades, the seating arrangement of the French Parliament in the 18th Century is no longer a useful way of describing our political cleavages. Beyond this, actual politics is a complex web of ideas, interests, economic incentives, traditions and evolving cultural forces, and, most importantly, psychologies. Reducing this web to a superficial binary effectively explains nothing.
The reemergence of authoritarian parties throughout the West are further testing our conventional understanding of politics. We currently lack the political lexicon to accurately describe these movements, and so we continue to try to shoehorn them into frameworks that – on closer inspection – make little sense. This is especially the case when seeking to understand their economic ideas.
An article published last week on Unherd titled “Marine Le Pen Is Now France’s Second Most Popular Politician” contained this curious paragraph:
Marine has remained an immigration hardliner but has also detoxified the RN brand by tacking her party, traditionally a home for shopkeepers and small business owners, to the Left on welfare and economics. While keeping the historic south-eastern stronghold, her social stances have made the post-industrial north of France, previously a Left-wing bastion, her new fiefdom.
What is odd about this framing is that Marine Le Pen’s Rassemblement National (previously the National Front) is not “moving Left on economics”. Parties like hers have always been suspicious of economic liberalism, and have always targeted industrialised (or now post-industrial) regions. This is because the core aims of ultra-nationalist parties are tied to collective forms of organisation, and are severely undermined by liberalism in all its forms.
Recently Foreign Affairs magazine has shared via its email newsletter a pair of articles by Dorothy Thompson on Nazi Germany, the first from 1935 and a second from 1940. Reading primary sources like these can provide insights into the nature of authoritarian movements that our modern mental frameworks can often overlook. What jumped out at me in Thompson’s first article was a description of the original economic objectives of the National Socialist movement.
The clearest exposition of the economic aims of National Socialism is contained in a pamphlet issued as a speakers' manual for the July 1932 elections, and called "Immediate Economic Demands of the N.S.D.A.P." It deals with both general aims and specific plans, the latter largely confined to work-creation programs to combat unemployment. It asserts as a fundamental principle that labor, not capital, is the source of all wealth, demands the immediate nationalization of banks and all monopolistic industries and trusts, immediate departure from the gold standard, government credit expansion, dissolution of department and chain stores, the increase of small land-holdings, and an immense program of government housing.
These are ideas that mostly read like a “Left-wing” programme to us today, and through this lens – despite the protests of those emotionally attached to the word “socialist” – National Socialism seems like pretty accurate name (the prime disagreement between these two socialisms is their views of history - either economic or racial). Alongside their obsession with racial purity, central to Nazism was also the romanticisation of the worker - and especially the traditional land-working peasant (the party’s original name was the German Workers’ Party).
We can see in modern ultra-nationalist movements, whether in Europe or with the Republican Party in the United States, there continues to be a romanticisation of workers as the “real people”. These are people who are seen embody a certain conception of authentic national spirit and especially a masculine ideal – strong men working with their hands, with output that is tangible and distinct from the intellectual and managerial classes. There is also a (often misguided) belief that the worker is more pliable, easily corralled into the mass movements – and mass shows of force – that these parties fantasise about.
While ultra-nationalists may be perceived to be in permanent struggle with socialists for the souls of the worker, their real enemy is actually Adam Smith. Although his muddled modern reputation may depict otherwise, Smith saw the financial betterment of the worker one of the great gains of productivity, and limiting concentrations of wealth as a key principle of his work. As someone who advocated for the decentralisation of decision-making, he placed a greater trust in – and had a greater respect for – the worker than those who see workers as merely malleable pawns.
However, ultra-nationalism’s suspicion of liberalism is more complex than just how it may erode their manipulative political aims. Smith’s most influential work – The Wealth of Nations – was a critique of the dominant mercantilism of the day. Smith’s counter-intuitive observation was that a nation’s wealth (as opposed to individual wealth) flourished when states stopped trying to direct how wealth was created. Individuals and businesses were best placed to make decisions without consideration of any “national” sentiment or objectives. The state simply does not have the knowledge to understand effective and efficient practices, and as a risk adverse entity, has difficulty sensing opportunity, or advancing innovation (except with war).
For political parties that have domination as their central operating principle, the zero-sum game of mercantilism fit nicely with their authoritarian psychology. Yet there was more than just a lack of centralised control that concerned them about liberalism, there was also the actual outcomes of a more liberalised world.
Smith argued that mercantilism didn’t understand the gains to be made from comparative advantage. This was an observation first identified by David Ricardo, and then subsequently adopted by Smith. Comparative advantage was the recognition that different regions are able to produce a good or service at a lower cost - and/or better quality – than others, and therefore this is where they should concentrate their efforts. Alongside this, with the constant seeking of efficiency, many products can be an amalgamation of multiple comparative advantages.
To understand why ultra-nationalists would find this so offensive, the best explanation remains an essay from 1958 by Leonard Read titled I, Pencil, which tracked the production of a single pencil. As I wrote in The Failure of Fusionism:
Read’s pencil begins in the forests of Oregon and northern California, but soon finds itself bonding with graphite from Sri Lanka and wax from Mexico, it picks up rubber from Indonesia and pumice from Italy, and the whole process is fuelled by coffee beans from Brazil. This was not just decentralised cooperation, but global cooperation; a production of goods that transcends national boundaries, and pays little attention to local identities in search of economic agility.
This is the inherent cosmopolitanism of trade. An example of how even a simple pencil requires organisation across nations and ethnic groups. This is deeply confronting to ultra-nationalists because it is not just component parts that are exchanged in this process, but culture as well. These economic forces drive the movement of people, as well as the movement of cultures that come with them. The freer these cross-border exchanges the more the ultra-nationalists’ delusions of racial and cultural purity are undermined.
While ultra-nationalists may comprehend the cosmopolitanism of trade, the conspiracism that is a central pillar of their psychology simultaneously struggles to accept it. To those who only understand the world through the mechanisms of control, mentally there can be no decentralised economic forces. Smith’s “invisible hand” is not the spontaneous order and mutual benefit created from economic incentives and free exchange, but instead the nefarious machinations of a shadowy group. Usually – regardless of the strain of authoritarianism – this is the Jewish people. It was, of course, the Soviets who described the Jewish people as “rootless cosmopolitans”.
While Dorothy Thompson’s article from 1935 highlighted the early aims of the National Socialist Party in Germany as akin to those we today might call “Left-wing”, upon seizing the full power of the state the reality of their economic program became somewhat different. Then, the primary concern of the party became the building of a war machine, and for this it needed to harness, not inhibit, the country’s industrial capacity.
To achieve this a grand bargain was struck with Germany’s industrial capitalists. These oligarchs could maintain their fabulous wealth as long as their businesses worked for the aims of the party. Market forces, with their myriad of competing moving parts and economic incentives, were unpredictable and could not be relied upon to deliver outcomes that enhanced the Nazis’ power. The party needed active collaborators within the existing economic elite.
While not as externally aggressive as the Nazis, other ultra-nationalist parties like the Chinese Communist Party, the Bharatiya Janata Party (BJP), and Fidesz in Hungary have similar relationships with their countries’ wealthy industrialists. With a desperate need to control the national narrative through the commanding heights of the economy, the captains of industry have been brought under the party’s wing. Those who play the game get favourable regulations, privileged access to the acquisition of further assets, as well as protection from foreign competition.
To Smith, strong market competition wasn’t just about economic efficiency, it was a moral advocacy. A way to limit and disperse power within a society, and to enhance individual autonomy. To ultra-nationalist parties who believe that there should be no limits on their power, and to whom establishing a submissive collective is the ultimate objective, this is a brutal affront.
Modern authoritarian movements like Rassemblement National who lust after this power are therefore not some new combination of atypical ideas. They are the descendants of those parties that wrought such havoc and suffering on the 20th Century. The lessons of that century couldn’t be clearer – parties that seek to dominate society, and oppress certain groups within it, know they have to restrict how people exchange with each other. Only when we ditch our lazy use of Left and Right may we finally comprehend this danger.