Why Do Nations (Still) Prefer Export Led Growth?

Indeed, after all these years, and particularly during periods of economic stagnation. Is there a basic psychological element to "Make (fill in the blank) great again", which is somehow being missed? While arguments against mercantilism are just as valid as they've ever been, there's a problem: we've scarcely advanced the goalposts for public understanding which matter most in these arguments, since Adam Smith discussed this issue at length, centuries earlier.

Meanwhile, as policy makers and special interests continue to place more barriers in the way of economic participation, the wealth capture of our non tradable sectors has become so complex that it boggles the mind. How is it possible for anyone to realistically reverse the damage? Sure, while exports-as-growth sounds "crazy" to economists and others who pay close attention, not everyone has time to pay close attention. For those who don't, policy makers recognize that export led growth as "solution", probably sounds reasonable to many who lack an instinctive feel for the stakes involved. And since it's only becoming more difficult to publicly discuss what's at stake, populists of the left and right find it easier to engage citizens in wishful thinking.

Even though I remain convinced that globalization and free trade are key to future prosperity, unfortunately I can understand why many have doubts. Especially since too many sectors have reduced long term growth prospects, by making excess demands on wealth generation for too long. The wishful thinking that populists tend to encourage, often serves as excuses with moral overtones, so as to not think too long and hard about the matter.

Certainly I'm as guilty as anyone when it comes to wishful thinking, for I'm old enough to remember a time not so long ago, when small salaries could still (mostly) take care of basic wants and needs. Many of us harbor some path in our minds by which "getting there from here" could be possible, once again. However, there's one way in which I part company with many populists, for it's neither possible or desirable, to return to a simpler past through some imagined reversal of events. Too much wealth would be destroyed in the process.

That past is gone. We need instead to envision the possibility of new places and means for wealth generation, rather than pining for "glory" days past. If we can rebuild prosperity on new terms, economists will no longer need to spend their days - for instance - trying so hard to "prove" in the public's mind that export led growth is an irrational concept. If we are willing to take part in the building of a more dynamic economy (instead of waiting for someone else to do it), export led growth could simply be shown as unnecessary. Ultimately, many citizens may be reluctant to let go of the idea of export led growth, no matter how much economists try to make it so, until they can have greater confidence in their ability to navigate the course of their own working lives.