Economic Crises and the Rise of Nationalism: A Global Perspective

At the core of the concept of “citizenship” lies patriotism. You cannot create a “citizen” out of people who do not love the culture, geography, traditions, literature, and music into which they were born. Citizenship is a concept that encompasses a sense of “responsibility.”

Patriotism becomes dangerous when it transforms to nationalism. While the idea of citizenship—based on patriotism—expresses the equality of individuals, nationalism expresses the superiority of one group over citizens. With the shift from citizenship to nationalism, the power and meaning of the concepts of equality and justice are weakened or lost at some point. This transition process lays the foundation for a societal formation that tends to drift away from democracy.

Today, we are confronted with the rise of nationalism. We have observed that the effects of the 2007-09 crisis play a strong role behind this surge. However, the migration issue created by the demographic changes triggered by the economy and international politics plays an important part in explaining the rise of nationalism. The phenomenon of immigration has become a topic that is increasingly discussed in the context of globalization and has gradually slipped out of control.

Citizenship does not mean that the economic, political, and cultural rights established within a country are shared inclusively with all of humanity. For this reason, citizenship is not about sharing but is inherently exclusive. The exclusive nature of the concept of citizenship is understandable and acceptable. Citizenship contains a historical accumulation of culture. It is understandable that those who created culture would try to keep their countries and cultures under protection, and this is totally unrelated to the concept of nationalism.

Morally corrupt societies eventually create their own elite classes. Bribery, along with the creation of political and economic rents to support certain groups, produces inequality. At this point, a society that has lost its ethical values can readily embrace nationalist approaches that set aside the concepts of individual freedoms and citizenship in favor of appealing to a specific community.

Nationalism can be built not only on the basis of ethnic origin and/or religion, but also on elements such as color, language, gender, and sexual orientation. The outcome of nationalism is a country and society hit by inequality and diminished democratic standards.

When societies lose their moral values and show tendency to easily embrace elements of nationalism, the potential for the strengthening of identity politics increases. The spread of immorality, followed by the rise of nationalism and eventually the use of identity politics as a tool through institutions, creates a ground for policy implications compatible with identity politics. Elections, referendums, an independent judiciary, parliament, and laws can all be used as instruments of identity politics.

At the core of citizenship lies morality. Citizenship is a concept that should be taught in school. Developed countries have succeeded in creating citizens. The economic crisis, with the inequality it has produced, has led to questioning the responsibility aspect of citizenry.

Faced with increasing inequality due to successive economic crises, citizens turned to seeking identity by forming masses rather than as equal individuals. Uncontrolled waves of migration has exacerbated the worsening social conditions of those masses. The need for solidarity emerged in response to the weakening qualities of citizenship. In other words, nationalist tendencies—built on different concepts—began to gain strength.

Large waves of unemployment, inflation, income inequality, and economic uncertainty drive individuals to seek new identities and forms of belonging. Throughout history, economic crises have laid the groundwork for the rise of extreme nationalist movements and authoritarian regimes.

It can be said that there is a cyclical relationship between economic crises and the rise of nationalism:

1. With an economic crisis, unemployment, inflation, and the feeling of insecurity increase. As unemployment, inflation, and poverty rise, anger and discontent spread throughout society. People begin to search for someone to blame for the crisis, whether from outside or within. While the upper classes feel the crisis less, the lower and middle classes are harshly affected.

2. Different groups (immigrants, ethnic minorities, foreign investors, etc.) may be held responsible for the crisis. Political actors use nationalist rhetoric to unite the people and sometimes create an external enemy.

3. Nationalist policies, protectionism, isolationist policies, and an emphasis on national identity are presented as solutions to overcome the crisis. Rhetoric such as “Our economic problems are caused by external forces” may become widespread. Governments may increase nationalist rhetoric to conceal their economic failures.

4. Conflicts among different groups within society intensify, and divisions and polarization gain momentum.

The Great Depression (1929) and the preceding period of unemployment and hyperinflation paved the way for the birth of Nazism in Germany. Adolf Hitler and the National Socialist Party linked economic problems with exclusionary nationalism. A series of successive crises increased the tendency for polarization within society.

The collapse of the Soviet Union led to a major economic downfall. Anti-Western rhetoric strengthened, laying the foundations for Putin’s “Strong Russia” policy. National identity was used as a unifying tool against economic instability.

Following the 1997 Asian Financial Crisis, the Indonesian economy suffered significant damage, and unemployment and poverty increased. A Chinese-origin minority was scapegoated, resulting in a rise in nationalist violence. Protectionist policies were implemented.

After 2008, the American working class blamed global trade and immigrants. Trump’s “America First” policy demonstrated that nationalism had become a defense mechanism in the wake of the economic crisis. Economic concerns after the 2008 crisis also increased anti-EU rhetoric. The Brexit process in the United Kingdom showed how nationalist reflexes can strengthen following a crisis.

Today, free, responsible, and egalitarian citizens in most societies are divided into blocs. Politicians who claim to be “saviors” and wish to appeal to these blocs vie for the votes of masses representing different identities, and they come to power.

The economics and politics of the mainstream of roughly the past 80 years have failed to satisfy humanity. The winners in this process were initially Western societies, but since the 1980s, Eastern societies have taken over. The East has never embraced the Western understanding of citizenship and democracy. However, within the framework of strong leadership and controlled market mechanism, by largely employing authoritarian-style choices and focusing on specific areas, they managed to take development steps that challenged Western economic indicators and technology.

Is it populism that fuels polarization, or polarization is the one which fuels populism? Both concepts feed off one another. Today, there are many examples suggesting that societies that have begun to polarize—or at least show a tendency toward polarization—paved the way for populism. In other words, the origins of today’s process lie in societies that, for various reasons, have started leaning toward polarization.

From the above lines, it is possible to express that societies that have lost their moral values will eventually distance themselves from democracy and experience a collapse by increasing their tendencies toward polarization. In fact, at the end of such a process, it is even possible for a civilization to reach the point of collapse. Societies bound together by shared values create democracies founded on the concept of citizenship.

While the dominant economic philosophy of roughly the past 40 years has disregarded the concept of equality and focused relentlessly on aggressive globalization, capital accumulation, and financialization—thereby ignoring inequality—it failed to account for the ensuing revival of moral collapse, nationalism, and subsequently, identity politics. In a sense, it created the conditions for its own collapse. At this point, Minsky’s views within his economic teachings—that every period of stability prepares the ground for its own collapse—are noteworthy.

The topics the article focuses on tell a “result.” In most of my previous writings and television appearances, I stated that financialization has no social benefit. I discussed the potential harms caused by the deepening and widespread deregulation of financialization. Now, the dominant economic and political views of the past 40 years are increasingly hardening and expanding their dominance. Under these conditions, is it possible to develop positive expectations?

Behind today’s results, factors like inflation, interest rates, trade balances, capital markets, taxes, competition, and distribution are at play. The decision regarding distribution is largely made within institutions. The quality of institutions is one of the crucial determinants of the future of societies. There is a strong connection between institutions and the concept of citizenship that I highlight in this article.

When economic sociology that takes into account institutions, power relations, and societal perceptions are disregarded, the results are as we are experiencing today.

If they manage to resist the existential threats of the climate crisis and artificial intelligence, bright days might only be seen by future generations. There is a direct connection between the wave of nationalism and the unsuccessful and mismanaged preservation of global collaborations and democratic values.

History presents the fact that economic turmoil will continue to be one of the most powerful factors in increasing nationalism. While the economy tends toward internationalization, politics finds its application through local elements. With this asymmetrical situation, it is impossible for globalization to offer “peace and common prosperity in a globalized world order.”