Contradictions in “Our National Resources”

Assume for the sake of the argument that the run-of-the-mill nationalist’s expression “our national resources” is meaningful. These resources—physical resources, capital, talents, expertise, etc.—constitute a sort of “public good” belonging to, and to be consumed collectively by, the nation’s members, if not by “the Nation” herself.

Consider a first contradiction. Nationalists are usually mercantilist: they want “protection” against imports and maximization of exports—the largest possible trade surplus. But this means using “our national resources” to produce goods for foreigners (the definition of exports), and using state coercion (tariffs and other barriers to imports) to limit our fellow citizens’ consumption of the production from (output of) foreigners’ own national resources. The contradiction is obvious. To be consistent, nationalists should instead favor maximum imports and minimum exports.

A nationalist could offer the counter-argument that “we” export production from “our” national resources in order to be able to import the foreigners’ production from their national resources. If that is true, “we” would want the best terms of trade, that is, as much importation and as little exportation as possible. But why would “we” want to do this? Answering by invoking comparative advantage and the benefits of trade generates a second contradiction (this one more institutional than purely logical). For then, why would “we” limit imports to what our government’s political and bureaucratic geniuses think should and should not be imported and under which conditions? Economic freedom is generally more efficient than government planning and industrial policy.

What does “efficient” mean? Different schools of economic thought provide different answers: maximizing economic benefits measured in terms of money (mainstream neoclassical school); maximizing social welfare (welfare economics); favoring economic growth and prosperity (Adam Smith and classical economics); “increas[ing] the opportunities for any unknown person picked at random” (Friedrich Hayek); coordinating individual actions (see, for example, Robert Sugden, The Economics of Rights, Cooperation, and Welfare or, for the matter, Anthony de Jasay); realizing the common preferences of all individuals for the basic rules of social interaction (James Buchanan). The underlying ideal is to satisfy as much as possible the demands of all individuals, all being assumed formally equal. In international trade as in domestic trade, comparative advantage simply follows from free individuals (and their private organizations) producing what each can produce efficiently enough to find willing customers, in order to be able to purchase individually what they want at the lowest price available. Economic efficiency refers to the satisfaction of individual preferences.

A corollary of these individualist theories is that property of “our national resources” is held by individuals in severalty, as opposed to in commonalty (a legal term to mean “in common”). Otherwise, the principal-agent problem prevents the efficient use of resources on the Pareto frontier. (See Chapter 13 of de Jasay’s Justice and Its Surroundings.) What belongs to everybody belongs to nobody except the state.

Nationalism, on the contrary, refers to the satisfaction of the national collective, which means in practice its majority or a plurality. Nationalism is a form of collectivism. In reality, the satisfaction of a collective amounts to the satisfaction of the preferences of its rulers and their political supporters.

In a free society, “national resources” are private. (Exceptions for communal lands, streets, roads, and such can be justified, perhaps with a social-contractarian argument, but they would be exceptions.) Trade from the outputs of private resources is, at least in peacetime, freely open for individuals and their private organizations to conduct as they want.

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