American and EU judicial authorities are one source of this new nationalism. Another is the institutions responsible for international trade, especially when new technologies are in play.
Many of the fundamental technological breakthroughs over the past century have come from large government outlays for research and development that would be prohibitively expensive for any private firm. America’s technological superiority since World War II is a direct result of its Cold War-era military-industrial mobilization, which led to the development of satellite technology as well as what would become the Internet.
Direct state support for high-tech companies often conflicts with international trade rules designed to encourage neutrality and a level playing field. For example, the World Trade Organization just ruled that Airbus, a European company, has received state aid in violation of WTO rules. According to the WTO, Airbus’s successful new Airbus A350 made it to market only because of the “direct and indirect effects” of long-term government support.
The Airbus controversy has been dragging on for decades, with Europeans countering that Boeing, an American company, is viable only because of its status as a US military supplier. Indeed, this lobbying game is often a race to the bottom, and foreign companies are compelled to establish a local presence so that they can persuade politicians that they are just as beneficial to the domestic economy as their native competitors.
Market economies cannot operate when their established rules are haphazardly enforced, which is what happens when national and international regulators turn into advocates for local enterprises and enemies of foreign businesses. This is not the result of a populist revolt; but populists in power certainly won’t address it.
Harold James is professor of history and international affairs at Princeton University and a senior fellow at the Center for International Governance Innovation. A specialist on German economic history and on globalization, he is a co-author of the new book "The Euro and The Battle of Ideas," and the author of "The Creation and Destruction of Value: The Globalization Cycle," "Krupp: A History of the Legendary German Firm" and "Making the European Monetary Union."