Nations and Markets

Abstract

ABSTRACT Economics and security seem increasingly intertwined. Citing national security, states subject foreign investments to new scrutiny, even unwinding mergers. The provision of 5G has become a diplomatic battleground—Huawei at its center. Meanwhile, states invoke national security to excuse trade wars. The USA invoked the General Agreement on Tariffs and Trade national security exception to impose steel and aluminum tariffs, threatening more on automotive parts. Russia invoked that provision to justify its blockade of Ukraine, as did Saudi Arabia and the United Arab Emirates to excuse theirs of Qatar. And with the spread of COVID-19, states are invoking national security to scrutinize supply lines. Multiplying daily, such stories have led some observers to dub the era one of geoeconomics. Nonetheless, these developments remain difficult to judge, and the relationship between economics and national security remains confused and slippery. The essay seeks clarity in the deeper logic of these labels, revealing a fundamental choice between the logics of markets and the logics of state. Whether invoked to ‘secure’ borders, privacy, health, the environment, or jobs, ‘national security’ is a claim about the proper location of policymaking. Appeals to economics, with their emphasis on global welfare and global person-to-person relationships, are such claims as well. Resolving disputes, this essay argues, requires recognizing these root choices.