Economic Nationalism Giving Rise To A Zero-Sum World

Yet that shield conceals a deep paradox. Suesse argues that economic nationalists are trapped between two conflicting aspirations. On one hand, there is a powerful urge toward isolation to protect domestic industry. On the other, there is an equally strong ambition for rapid development and expansion.

Without access to foreign capital, technology and international cooperation, industrial catch-up becomes nearly impossible for most. This, Suesse suggests, is the dilemma confronting many developing countries today.

Indonesia, for instance, epitomizes the desire for full sovereignty over national resources, while enduring dependence on external investment and technology transfer to make that sovereignty economically meaningful.

A more technocratic yet skeptical view is offered by Jeremie Cohen-Setton, Madi Sarsenbayev and Monica de Bolle in“The New Economic Nationalism (2025).” The authors argue that the world is attempting to resurrect the state as the central economic actor, an approach long treated as taboo under liberal orthodoxy.

For them, this“new economic nationalism” is a high-risk experiment. When states intervene too deeply in markets under the banner of nationalism, the likely outcomes are not equity and resilience, but inefficiency, swelling public debt and corruption disguised as industrial policy. In this sense, economic nationalism resembles a potent drug administered in excessive doses, intended as medicine but ultimately toxic.

An even more radical and apocalyptic interpretation comes from Jamie Merchant 's“Endgame: Economic Nationalism and Global Decline (2024).” Writing from a Marxist-inflected perspective, Merchant does not see economic nationalism as a policy choice or a mere reaction to inequality.

Instead, he treats it as a symptom of global capitalism entering a phase of systemic decay. In his analysis, globalization has begun to collapse from within as the profit potential of free trade reaches saturation due to automation and the erosion of surplus value from human labor.

Economic nationalism, in this view, represents a desperate scramble by states to seize the shrinking remnants of prosperity as the global economic vessel slowly sinks into stagnation.

When these perspectives are confronted with contemporary geoeconomic realities, a troubling pattern emerges, one with profound implications for global stability.

Kenneth A Reinert, in“The Lure of Economic Nationalism: Beyond Zero-Sum (2024”), warns of the psychological dangers embedded in this trend. He describes economic nationalism as a seductive but destructive embrace of zero-sum thinking, the belief that one country's gain must automatically be another's loss.

If China builds a massive battery factory, the US sees an existential threat to its auto industry; if Indonesia bans raw mineral exports, advanced economies perceive an assault on their market access.

There is truth to the sense that the global system is under severe strain. China embodies many of the fears Reinert describes, leveraging globalization externally while pursuing fiercely nationalist industrial policies at home.

The US response, initiated under Trump and expanded under Joe Biden, reflects a growing impatience in Washington. Tariffs, technology blockades and sweeping subsidies under initiatives like the Inflation Reduction Act have followed.

The at least initially unintended casualty, however, has been the multilateral system itself. Institutions such as the World Trade Organization have been weakened, leaving the global economy increasingly adrift without mutually accepted rules.

On the ground, economic nationalism has proven to be more than a passing political slogan. In Japan, the shift toward“economic security” has led firms to relocate production out of China, even at a higher cost.

The European Union, long regarded as the world's most faithful champion of free trade, is now arming itself with anti-coercion instruments to defend market sovereignty. These developments reinforce Merchant's contention that the world is fragmenting into rival economic blocs marked by mutual suspicion.

The situation is further complicated by the moral justifications each country advances. Developing nations claim protectionism as a necessity to escape poverty, while advanced economies defend it as essential to preserving middle-class living standards.

This collision of narratives creates fertile ground for populist and far-right movements, which promise the illusion of absolute self-sufficiency as a path to political power.