Nations and Markets

Abstract

Economics and security seem increasingly intertwined. Citing national security, states subject foreign investments to new scrutiny, even unwinding mergers like the purchase of Grindr or the creation of TikTok. The provision of 5G has become a diplomatic battleground – Huawei at its center. Meanwhile, states invoke national security to excuse trade wars. The U.S. invoked the GATT 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 UAE 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 lead some observers to dub the era one of geoeconomics.

Nonetheless, these developments remain difficult to judge and the relationship between economics and national security confused and slippery. Neither term is self-defining, and the same activities can be defined as either or both. The essay seeks clarity in the deeper logic of these labels, revealing a fundamental choice between the logics of markets and 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 as well. The logics driving the current economics-national security dynamic represent paradigmatic, competing models for organizing individuals with different normative justifications and concerns. Resolving disputes, this essay argues, requires recognizing these root choices.

Keywords: national security, economics, internatinal trade, international law, General Agreement on Tariffs and Trade, TikTok, World Trade Organization

JEL Classification: F13, F18, F52, F53, K32, K33