This article originally appears as chapter 8 in Essentials of Economics.
Nationalism appears to be a modern phenomenon having its origin in the nationalities constituted in Europe between the 16th and the 19th century concomitantly with the disappearance of feudalism and of the Romano-Germanic Empire that came into being with Charlemagne and was totally liquidated with the unification of Italy.
In fact, however, the spirit of nationalism is very ancient. It has been and still is present as a factor in both political and economic history. The only thing that has changed is its form. It was this spirit that animated the absolutist and totalitarian regime of the Egyptians, that of the decadent Roman Empire, and the mercantilism of the 17th and 18th centuries, and, after a brief eclipse that lasted from the Congress of Vienna to the First World War, revived in the form of the so-called controlled or planned economy under the combined influence of war and socialism.
The latter system arose as an international movement of the working class, having as its slogan, "Proletarians of all countries, unite!" but it has since passed to the opposite side and now says, "Proletarians of all countries, don’t come to my country and take my job away from me!"
In its economic aspect, nationalism is based on two fallacies: the belief in the existence of national economies and the doctrine that a nation can prosper economically only at the expense of the rest of the world. These convictions were among the first to be combated by the classical economists, but they were unable to free themselves entirely from the myth of the national economy. Thus, Adam Smith entitled his book The Wealth of Nations, and until very recently treatises on economics bore the title "political economy," even when they were antinationalistic in content.
Nothing is more illusory than the existence of a national economy and national wealth. Nations do not own any property (the resources at the disposal of governments consist of what they need to perform their functions) and are neither rich nor poor; this is possible only for individuals. In recent years the bureaucratic organs of the League of Nations and latterly of the United Nations have spent vast sums of money on calculating machines, writing materials, books, travel expenses, and salaries for "economists" engaged in computing the wealth and income of nations. All these calculations are utterly fantastic and lead absolutely nowhere, because there is no possible way, no matter how many laws are passed or how powerful a police organization is created, of knowing what each individual who lives in a particular country owns or earns. Each case is unique; the peoples’ lack of confidence in their governments is inveterate and founded on bitter experience; and the majority refuse to divulge all that they have hidden in the house or outside the country or to reveal what their true earnings are, even when they are assured that this information is being sought purely for "statistical purposes," because they fear that sooner or later these statistical purposes will turn out to be tax collectors, if not outright expropriators.
March 6, 2008
Faustino Ballv (1887–1959) was born in Barcelona, where he trained as a lawyer, before studying economics in London. As a teenager, Ballv had edited a republican paper, and in the stormy 1930s, as the clouds of civil war closed over Spain, he was elected a deputy of that party. But there was no place for this true liberal when the struggle degenerated into a power contest between Fascism and Communism. Leaving his native land forever, Ballv went first to France and then to Mexico, where he acquired citizenship in 1943 and lived until his death in 1959. In Mexico City, in addition to the active practice of law, Dr. Ballv soon took over two professorial chairs — of law and of economics. In both fields, he was an exponent of classical liberalism at its best.
