The opposite of populist nationalism is not globalist elitism; it is economic realism.

Hard hitting piece by Anatole Kaletsky.

He says populist waves usually meet with economic realism which is usually unpleasant

In the months or years ahead, voters in the US and Italy will learn the same lesson. There, too, scapegoating foreign influences, whether through trade or immigration, will do nothing to lift living standards or address the sources of political discontent.

Italy has legitimate grievances against the EU: hypocritical and inequitable policies on asylum and sea rescues, self-defeating fiscal rules, and economically illiterate financial policies. But the new government is also exploiting the nationalist upsurge to attack reforms that have nothing to do with Europe and are vital to Italy’s economic success.

Successive Italian governments since the financial crisis have gradually laid the foundations for pension, labor market, and banking reforms. These changes have created the conditions for economic recovery, which began last year, following a decade of recession; but they have been politically unpopular and are now being denounced as symbols of elitist foreign oppression. If the new government abandons all three reform projects, Italians can also abandon hope of economic recovery, perhaps for another decade.

The US will also discover that attacking foreign interests is no panacea and can make hardship worse. Trump thinks his measures against imports from China, Germany, and Canada will hurt these trading partners and create American jobs. This might have been true when the US economy was suffering weak growth and deflation. But in a world of strong demand and rising inflation, German and Chinese exporters will find new markets for their products, whereas US manufacturers will struggle to replace foreign suppliers. BMW and Huawei will be just fine, whereas tariffs will act as a tax on American consumers, through higher prices, and on American workers, businesses, and homeowners, through rising interest rates.

The opposite of populist nationalism is not globalist elitism; it is economic realism. And in the end, reality will win.

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