Former Treasury Secretary Larry Summers Calls For 'Responsible Nationalism'
ROBERT SIEGEL, HOST:
This year voters in Britain and the United States have rebelled against the guiding principle of international economic policy for the past several decades - a more open, integrated, international order. The Brexit referendum, the triumph of the Trump campaign and the success of the Bernie Sanders campaign entailed a rejection of trade policies that have been championed by political establishments as key to economic growth.
Well, from former Treasury Secretary Lawrence Summers comes this advice in response. Reflexive internationalism needs to give way to responsible nationalism. Professor Summers, welcome to the program once again.
LAWRENCE SUMMERS: Good to be with you.
SUMMERS: In this op-ed in both the Financial Times and The Washington Post, you say that internationalism in economic policies has delivered real benefits, but even those real benefits have been oversold. What's an example, and who's been over-selling them?
SUMMERS: There's always a tendency in political debate for people to want to argue their case as strongly as they can so the strongest claims win out. So I think the United States is much better off because of NAFTA than it would have been without NAFTA, but not all the claims about how we would have a spectacular surge of exports to Mexico have fully materialized. I think we're much better off with China in the World Trade Organization, but the claims that were made that it would lead to substantial political liberalization in China have not materialized.
And in a way, the bigger the problems get, the bigger the political obstacles are, the greater the pressure on the advocates is to exaggerate. And so we've been caught in a somewhat unfortunate cycle.
SIEGEL: If the appropriate response is, as you say, a responsible nationalism, what is a responsible nationalism?
SUMMERS: Responsible nationalism starts from the idea that the primary responsibility of any government is to the welfare of its citizens, not to some concept of international order, that international order is a means towards the end of improving the economic welfare of its citizens. And therefore as we look to the international economic area, we need to focus on kinds of cooperation that will most tangibly and directly benefit the largest number of Americans.
SIEGEL: How did the notion of the point of government being the welfare of its own people - how did that ever get bumped out of first place for what economic policy should pursue?
SUMMERS: Well, I don't think that people who have pursued these agreements have ever intended to lose sight of that agreement. But there has been a tendency for considerations of foreign policy to loom large, and there's been a tendency for those who have the strongest interest in what's happening in other countries to have the largest voices. And those have tended to be the corporations who do business in those countries.
SIEGEL: Do you accept then that there is a valid nationalism that politicians can advocate that is distinct from xenophobia, racism or isolationism?
SUMMERS: I think absolutely, and I - you know, I think the - I think if you look at the American tradition going back to what we've all heard in rap of late, the writings of Alexander Hamilton, there's a long nationalist tradition in the United States. And I think we need to recover parts of that tradition from an establishment that is sometimes more concerned with what people are thinking in Davos than what people are thinking in Akron, Ohio.
SIEGEL: (Laughter) When you say people who are more concerned about what people are thinking in Davos, you're not a complete stranger to the Davos scene, Secretary Summers. I mean, do you - is there an element of confession here in this column that you've written?
SUMMERS: I hope that this is not the first or the second or the third time that I've expressed myself on the importance of paying more attention to middle-class interests within the United States, but I also think that there's no question that all of us who have been involved in global policy have devoted less attention to questions of fairness, less attention to questions of local health and stability of economies than we would have if we had seen in advance all the trends that have materialized over the last 15 or 20 years.
SIEGEL: Former Treasury Secretary and Harvard professor Lawrence Summers op-ed in The Washington Post is titled "How To Embrace Nationalism responsibly." Larry Summers, thanks for talking with us today.
SUMMERS: Thank you.
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