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ABSTRACT
With increasing economic interdependence, the scholarly treatment as well as the practice of economic nationalism is either seen as theoretically redundant or practically impossible. Contrary to this conclusion, I argue that economic nationalism is not inconsistent with globalization. States are not only active participants in globalization but they continue to strategically express nationalism in new global settings by supporting national firms and citizens overseas. By redefining economic nationalism from protectionism to the leveraging of national resources to secure economic benefits from the world economy, this paper provides an alternative view of economic nationalism. This paper analyzes economic nationalism as a dynamic concept. Empirically, it takes up three Indian industries (steel, auto, software) since 1950 to understand how nationalism was practiced and how it has changed under globalization. The paper establishes India's pursuit of economic nationalism under globalization through its support of Indian businesses and citizens abroad. Though the coherence of nationalism may be weak, it can still be expressed in looser forms of national ‘presence’ abroad.
ACKNOWLEDGMENTS
An earlier version of this paper was presented at the 2006 International Economic History Association Congress in Helsinki and subsequently was available as a working paper of the Asia Research Institute, National University of Singapore. I thank three anonymous referees and Janette Rawlings for their substantial scholarly and editorial inputs. The usual disclaimers apply.
Notes
a two private sector plants (TISCO 1.0 mt and IISCO 0.5 mt);
b three 1.0 mt public sector plants;
c capacity expansion TISCO 2 mt and IISCO 1 mt; d IISCO's capacity phased out to 0.45 mt, new greenfield Vizag with 3.0 mt commissioned.
*1991; see list of firms and acronyms for full name of auto firms; others include Daewoo, General Motors, PAL-Peugeot, Mercedes-Benz and 1999 onward Hyundai and Fiat; in 2001, Daewoo, Fiat, PAL-Peugeot, and PAL had stopped operations; in 2001, Hyundai and Toyota had 57.3% and 18.1% of ‘Others’ shares respectively.
1 To presume that earlier practice of economic nationalism, which provided policy space, produced equitable outcomes is debatable. But that is another discussion. Some exceptional cases such as Singapore display how broad-based social gains are not incompatible with global interactions.
2 It is beyond the scope of this paper to address why the hardware sector, even in a period of intense economic nationalism, failed to become world class. In this context one might mention that several globally successful software companies such as HCL, TCS, and Wipro transformed themselves from moribund national hardware companies. And today there is a confluence of economic and political forces that makes the establishment of a large semiconductor and other hardware manufacturing industries feasible.
3 It has been already suggested that past experience in economic nationalism gives the state better capabilities in managing globalization. Nayar (Citation2001: 261) suggests that the adjustment process since the 1991 reforms in India was swift precisely because of a ‘self-reliant economic base’ constructed in the past.
4 Japan and Japanese firms for various reasons keep a low international profile even as they become important sources of overseas development aid (ODA) and foreign direct investment. Their overseas nationals are less visible except in Brazil and Peru but they are nationally Brazilian and Peruvian first in the eyes of the Japanese.
5 I acknowledge that there is a danger of reducing firm objectives to state goals, especially when we know profits earned overseas could be reinvested anywhere. However, firms are nationally embedded institutions and are not that footloose (CitationDicken, 2007).
6 The literature on state-society interaction suggests a varying relationship from which nationalism may be aggregated (CitationEvans, 1995; CitationKohli, 2004; CitationPoulantzas, 1973; CitationScokpol, 1985) or state interests independently projected (CitationMiliband, 1983; CitationSen, 1984). But that change comes from state initiatives only has been challenged by those who see non-state actors as important (CitationChowdhury, 1999).
7 In the literature India's economic nationalism ends and globalization begins with the 1991 economic reforms. This is factually incorrect since reforms were initiated incrementally since the late 1970s.
8 Assurance was given to existing private firms, such as Tata Iron and Steel and Indian Iron and Steel, that there would be no nationalizations of their industry.
9 Witness the 2008 bailouts of financial institutions by the US government, no doubt motivated by nationalist concerns.
10 The entrepreneur Jamshed Tata, the founder of Tata Iron and Steel Company (TISCO), failed to raise capital in London at the turn of the century but could do so later in India itself (CitationEtienne et al., 1992: 49).
11 Due to the death of the founder Sanjay Gandhi, son of Indian Prime Minister Mrs. Indira Gandhi, Maruti was nationalized.
12 The government in the 1970s had established Scooters India Ltd. to capture the lucrative two-wheeler market. However, it failed miserably because of industrial strife, managerial incompetence, and technological obsolescence (CitationNayar, 1992).
13 A similar picture is obtained for commercial vehicles (CitationD'Costa, 1998: 307, Citation2004a, Citation2005: 93–98).
14 Computer Maintenance Corporation (CMC) was an exception. It was a major state-owned IT firm, which took over the servicing of IBM machines after IBM left India in 1977.
15 Of course what is national welfare may be hard to pin down. But increasing growth and its distribution via employment, and locally retained value of production can be seen as supporting national welfare.
16 For Bangalore's institutional arrangements in the IT industry see CitationD'Costa (2008b).
17 The Department of Atomic Energy and the Electronic Corporation of India (ECIL), located elsewhere, the civil aviation industry, and the information broadcasting sector all sourced electronic components from BEL located in Bangalore. Later ECIL itself served the computer needs of India.
18 There are of course social and environmental challenges with such mega projects in impoverished mining areas. But that is partly the nature of large-scale industrialization.
19 Similar attachments to nationalist sentiments have been also expressed by the collapse of the merger between Bharti telecom and South Africa's MTN Group, when Mr Bharti remarked that ‘… Bharti's vision of transforming itself from a homegrown Indian company to a true Indian multinational telecom giant, symbolizing the pride of India, would have been severely compromised’ (CitationTimmons, 2008; author's emphasis).
20 There have been some setbacks in the completion of the Nano factory due to a local politically-charged dispute over farm land.
21 Of course some firms of the industry had to go as part of restructuring but the industry as a whole has been energized. See CitationD'Costa (2005). There are also challenging dilemmas of oil dependency, ecological impacts, and public versus private transportation.
22 Of course, one must be aware of the downside of relying too heavily on remittance income since immigration policies as well as economic conditions could induce volatility in remittance income flows (D'Costa, forthcoming: 70–71; CitationSeers, 1983: 65–66).
23 The government of India has justified the logic of globalization when mollifying irate US white collar workers who claim job losses due to global outsourcing of IT to India.