Panel discussion
Economic patriotism versus the reality of globalization and
integration
•
•
•
National colours and roots or responsibility and paying taxes – what is modern
patriotism all about?
Business as an element of social life and civilizational change.
The importance of foreign investment for the economic growth, innovation, and
for creating jobs – examples, models, and stereotypes.
Globally
In the face of accelerating globalization, the slogans of economic patriotism are becoming
ever more resonant. Politicians put them on their banners as a counterbalance for the
removal of trade barriers, opening markets and international flow of capital. Entrepreneurs
are also more accepting of initiatives fostering cooperation to protect the national markets
or enabling the entry onto foreign markets.
Economic patriotism becomes even stronger under threat. The 2008 crash on the US
credit market shook up global stock exchanges and markets. Companies scaled back
production, fired employees, withdrew from investments - especially abroad. Capital,
which only recently knew no bounds, quickly reverted to having a nationality. Reindustrialization (understood as a return to industrial production) is a buzzword, while EU
countries started to point out their respective national interests, previously discreetly
passed over in silence. And, even though leading global economies repudiate
protectionism and interventionism, the more benign form of these attitudes - economic
patriotism - is certainly gaining momentum. In 2012, it became an important element of
Barack Obama's re-election campaign. His pamphlet entitled A New Economic Patriotism:
A Plan for Jobs and Middle-Class Security lists some key predicates of economic patriotism
as understood by the Democrat, such as re-industrialization, using new national sources of
energy, supporting US small and medium businesses and cutting the deficit (among
others, by eliminating tax loopholes).
Issues for discussion:
• Where is the boundary between economic patriotism and nationalism?
• How can states effectively promote their interests in the era of globalization,
faced with the growing power of corporations, markets and other aggressive
players in the global economy?
In Poland
The catch phrase of economic patriotism emerged in the Polish public debate around the
same time. In 2012, the Civic Institute published a booklet on this topic, which featured
an interview with Professor Andrzej Koźmiński. He defined economic patriotism as the
striving of societies to grow richer, but also as caring for one's 'small fatherland in the era
of globalization'. He named paying taxes as one of its key components. He also drew a line
between economic patriotism and nationalism, stating that the former 'stands for
something', while the latter - 'against something'.
Economic patriotism became one of the fundamental banners of the PiS party, with
Mateusz Morawiecki and Jarosław Gowin, Deputy Prime Ministers of Beata Szydło’s
government, as its most avid advocates. They define economic patriotism as universal
concern for the development, economy and industry, meaning the creation of such
conditions for entrepreneurs that will foster their growth as best as possible. Also the
promotion of small and medium companies is important. This trend aligns with the idea of
'nationalization' of institutions and enterprises.
At the same time, the launch of Jagiellonian Club's Pola application (which makes it
possible to quickly check information on the origin of products by scanning their bar
codes) has been accompanied by a rise in consumer ethnocentrism. This aspect of
economic patriotism was researched in late '80s of the previous centuryi and it signifies
'the belief held by consumers that they are morally obliged to purchase goods of domestic
origin'. Purchasing Polish products became fashionable in circles associated with right-wing
parties, but so far there is no empirical evidence that the sales of Polish companies have
gone up.
According to many interpretations, also fair pay, which translates into higher tax revenues
or greater social coherence, constitutes an element of economic patriotism.
The doctrine of economic patriotism rarely touches upon the issue of foreign investments.
On the one hand, the advantages of domestic capital over the foreign capital are often
emphasised, as the former is supposedly more secure (it is subject to speculation less
frequently), more permanent (as it has no country of origin to which it could flee) and,
according to some interpretations, cheaper (and if not cheaper, then at least it is a
domestic company that earns off of it). On the other hand, it would be difficult to find a
government or a politician who would not want to attract foreign investments - because
they create new jobs and new tax revenues. Up until mid-2016, Poland has attracted
investments with the value of ca. EUR 250 million. This made it possible to create ca. 5
thousand jobs and another several thousand in the surroundings of these investments.
The greatest value is placed on jobs brought by high-quality investments, which also
channel money into research and development. The number of patents may increase
thanks to such investments. More intellectual property is also generated by them.
Issues for discussion:
• How to promote domestic products in the country, at the same time hoping
that consumers on export markets will also choose to buy Polish goods?
•
How to attract foreign investments to a country which strives to become
independent from foreign capital?
The single market
One of the core elements of political correctness in the EU public debate has been
avoiding the subject of Member States' national interests. They clashed at the European
Council, Committee and Parliament. Yet the overarching paradigm of the EU debate has
been (still is?) the single market and the four freedoms (the free movement of goods,
services, capital and people). Even though economic patriotism is not, theoretically, at
odds with the single market - it is only natural for governments to root for the interests of
their economies - the abuses of this idea are a cause of mounting tension. The road from
protecting one's own market to protectionism is short. Economic patriotism in its most
benign, positive variety, encouraging consumers to shop local to support a domestic
manufacturer, product or resource, does not spin the single market out of balance.
However, any attempt at regulating the market so as to give the upper hand to domestic
companies at the cost of the foreign ones, edges us toward the spiral of protectionism.
This, in turn, weakens the single market and, consequently, the European project.
One fitting example is the issue of German minimum pay. From the perspective of Polish
carriers, who were able to compete with their German counterparts thanks to, among
others, lower human resources costs, the imposition of minimum pay by the Germans was
a manifestation of protectionism and of impeding their functioning on the single market.
Berlin, however, deemed it natural that minimum pay should apply to all enterprises
operating on the territory of Germany.
Issues for discussion:
• How to promote economic patriotism and build the single market without falling
into protectionism?
• Are the growing national egoisms a threat to the European project?
A definition, in lieu of a summary
The dictionary definition of patriotism is 'all love of one's country as the place of one's
origin and/or residence'. Economic patriotism, in turn, is the expression of this love
through economic conduct of societies. Just like in the general form of patriotism,
however, economic patriotism can also be marked by two main attitudes. At the risk of
oversimplification, these could be tagged as the civic and the nationalistic approach.
According to the followers of the national-patriotic school, domestic companies should be
supported by the state on the internal and foreign markets. This support may be financial,
regulatory or stemming from cooperation with large state-owned entities, such as stateowned companies. This strategy stimulates development and growth of the economy, thus
making the nation richer and stronger.
The liberal-civic school, on the other hand, wants to limit the state's influence on the
economy. A patriot should respect his or her country and its laws, pay taxes and act to the
benefit of the community and the common good. Such a patriot should not, however,
expect the intervention of the state in the market or in the economy. These two attitudes
do not necessarily have to be at cross-purposes, they may at times complement each
other. Often, the differences stem from the distribution of emphasis and follow from being
anchored within a broader political ideology.
Issues for discussion:
• Is a foreign company that hires, invests and pays taxes in a given country less
patriotic than a domestic company that does the same beyond the borders of
its country of origin?
• Is Škoda, now part of the Volkswagen group, an example of the triumph or
fiasco of the Czech motor industry?
Author: Andrzej Bobiński, Senior Business Analyst, Polityka Insight
i
In 1987, American scholars Terence A. Shimp and Subhash Sharma described this phenomenon in
the Journal of Marketing Research.