BRIC Nationalism Is No Alternative

Developmentalist nationalism is a poor substitute for socialism.

Illustration by Ricardo Santos

In 2001, Goldman Sachs economist Jim O’Neill coined the phrase “BRIC” — referring to Brazil, Russia, India, and China — to describe the emerging market economies that looked set to drive global economic growth in subsequent decades. At the time, these countries were home to more than 40 percent of the world’s population and about a quarter of global GDP.

The term stuck. The four countries began to hold BRICs summits to foster cooperation outside the West’s orbit, adding South Africa to the acronym a decade later.

By 2008, each of the original BRIC countries had consolidated its position as a world power. And when the financial crisis dented the economies — and the confidence — of the developed world, the BRICs were there to pick up the pieces. While Europe and the United States faced the worst economic crisis since the Great Depression, China launched a wide-ranging stimulus program worth 20 percent of its GDP, dragging the global economy out of recession with huge infrastructure projects that extended far beyond its borders.

India’s government also launched several stimulus packages over the course of the year, facilitating an impressive recovery. The Brazilian economy was hit particularly hard by the crisis, but the government was still able to implement stimulus packages based on the idea of “growth with equity,” where measures to boost investment were paired with poverty alleviation.

This economic advance was meant to accompany the rise of democracy and international cooperation. Local strongmen and reactionary ideologies would be no match for material progress. When the BRICS Development Bank was launched in 2014, some commentators speculated that the group would begin to challenge the power of the World Bank and the International Monetary Fund, perhaps even providing an alternative to the Washington Consensus itself. Yet there were signs even in 2008 that progress wouldn’t be so simple. Russia fared less well than the other BRIC economies as the price of fossil fuels plummeted worldwide. It was at this point that the Kremlin took advantage of the global economic chaos to invade South Ossetia. With the world’s attention elsewhere, there was little to stand in their way.

After 2008, all the clues that Russia was gearing up for a major military operation were there for the world to see. The Kremlin began to consolidate its foreign exchange reserves in anticipation of any sanctions levied against it. The government also increased exports of natural gas to Western Europe, ensuring that the continent would rely on a steady flow of the resource from Russia.

Nationalism has always been a significant force in Russian society, but there can be no doubt that the Kremlin stepped up its patriotic rhetoric in the wake of the 2008 financial crisis. Yet Russia was not the only BRIC country to see a postcrisis rise in nationalism.

The Global South Takes a Turn to the Nationalist Right

Illustration by Ricardo Santos

Over the last decade, all of the BRIC economies have been led by ardent nationalists at one point or another, some of whom — such as India’s Narendra Modi — have unleashed astonishingly violent hate campaigns. What explains the rise of reactionary nationalist politics in some of the world’s most dynamic and fastest-growing economies?

Intuitively, it’s easier to understand the rise of nationalism in the Global North after 2008. Middle-class and working-class households became accustomed to rising living standards in the period before the Great Recession. But growth was being driven by asset price inflation — most obviously rising house prices — rather than productive investment.

The individualistic ideology that grew out of this boom in asset prices was associated with the decimation of the welfare state and the decline of labor unions. So when the growth stopped, everyone was left to fend for themselves. Without strong collective organizations to focus people’s attention on the true source of their woes — those at the top of the social hierarchy — the right-wing press and nationalist politicians encouraged the public to blame those at the bottom instead. The scapegoat par excellence was, of course, Schrödinger’s immigrant, who simultaneously came to a new country to steal jobs and to leech off unemployment benefits.

The hatred directed toward migrants ever since has been remarkable. It has also been a gift to right-wing politicians, who have sought to keep public debate focused on anything other than the grinding poverty faced by millions of working-class people across the rich world. However, this same explanation cannot easily be applied to the emerging market economies in which nationalism is on the rise — epitomized by the BRIC powers. These countries experienced periods of high economic growth and, to a lesser extent, reductions in poverty in the period between the 2008 financial crisis and the COVID-19 pandemic.

Now, as wealthy countries are wracked by inflation, political turmoil, and recession, the BRIC economies are once again outpacing the advanced capitalist world. The group recently announced plans to create a new global reserve currency to rival the power of the US dollar, news of which has been used to great effect in the West’s economic sanctions against Russia. Even Saudi Arabia, once among the staunchest of American allies, declared that they want to join the club.

The rates of growth seen in the BRIC countries, and the political and cultural self-confidence they are engendering, make it much harder to attribute the rise of nationalism there to simple economic hardship. Poverty and inequality are, of course, far more pervasive in these countries. But reactionary nationalist ideologies tend to emerge most strongly in response to economic decline rather than absolute poverty. Nationalists are adept at exploiting emotions like nostalgia to encourage communities living through a period of decline to blame the loss of their former privileges on an outsider group.

While the world has made far slower progress at eradicating poverty than many expected at the turn of the century, the BRICs are far from experiencing economic retreat. Rates of growth are high enough to support a growing middle class, and many young people in these countries today would be astonished by the living standards their parents and grandparents experienced.

One potential explanation for the rise of nationalism in the Global South comes from the political economist Karl Polanyi. Polanyi rightly argued that the political and the economic cannot be understood separately. If you want to understand capitalism, you can’t just study market exchange — or even production — you have to study the state and society as well.

Polanyi claimed that the rise of the market economy was associated with a great transformation of human society. Whereas economic interactions had previously been structured by reciprocal networks embedded in communities, capitalist development — facilitated by the state — tore these networks apart, often with devastating consequences for the communities and individuals involved.

The natural reaction of those affected was to fight back against the constant encroachment of the market, often petitioning state institutions for protections against the commodification that these very institutions had set in motion. The ways in which this resistance manifested were diverse, but at least one form was nationalism. “In” communities can petition public authorities for protection from “out” groups, allowing national resources to be focused on supporting the former at the expense of the latter.

One might try to understand the violent anti-migrant rhetoric of Hungary’s Viktor Orbán, for example, in these Polanyian terms. But a pure Polanyian reading doesn’t quite capture the nature of the nationalism we’re seeing today in the Global South, which feels more like an assertive, often aggressively expansionist ideology led by state elites instead of a grassroots reaction to economic transformation.

Rather than playing up a sense of decline and nostalgia, politicians in these states celebrate the national pride of their citizens, pointing to the astonishing economic and political strides made in recent years, often (and not unfairly) blaming the West for standing in the way of further progress. The nationalism of Chinese president Xi Jinping, for example, seems less like a response to public demands for protection from the market and more like the aggressive assertion of a different kind of economic model entirely.

Illustration by Ricardo Santos

False Dichotomies

Illustration by Ricardo Santos

Most political leaders in the Global South would certainly describe their policies as “developmentalist,” in contrast to the neoliberal approach to macroeconomics pursued across much of the rich world. But both developmentalism and neoliberalism, despite different logics of governance, are ways of justifying state power.

The neoliberal politician seeks to use market competition as a yardstick to assess governance. If a particular policy conforms to the rules of “the market,” it’s good. If it doesn’t, it’s bad. Note that this doesn’t have much to do with shrinking the state — the state can grow very large, so long as it’s intervening in such a way as to promote the interests of capital.

Developmentalism rests on quite different foundations. Developmentalist politicians seek to promote national prosperity and stability to justify their rule.

Under this model, policies aren’t assessed according to whether they conform to the logic of the market; they’re assessed according to whether they make one state perform better than another. One of the most important benchmarks in this international measuring game is GDP. More often than not, emerging market politicians will couch their policy proposals in terms of their impact on economic growth, which is supposed to lead to development.

These narratives are not, of course, restricted to the Global South. Neoliberal and developmentalist ideologies are deployed selectively by parties all over the world. The UK Labour Party has, for example, attempted to play the developmentalist game many times throughout its history — and current party leader Keir Starmer’s reliance on the idea of growth as paramount can be seen as a reversion to this trend.

What we’re seeing in the Global South is a kind of developmentalist nationalism, which focuses on promoting the glory of the nation and the prosperity of the people — and ridding the nation of foreign agents attempting to undermine its strength.

Some might ask whether this kind of developmentalist nationalism should even be seen as a problem. Shouldn’t we understand this as a kind of moderate social democracy, not dissimilar to the postwar consensus in the UK or the Trente Glorieuses in France?

The reason developmentalist nationalism — or, as I would call it, state capitalist nationalism — should be a cause for concern is that, more often than not, it undermines rather than supports the strength of the organized working classes in the states where it is deployed.

State capitalism is, after all, still capitalism. It still implies a society organized around the interests of capital — even if the makeup of the capitalist class, and those that govern with its consent, is different from what we’re used to seeing in the rich world. In fact, it’s the class structure of these societies that tends to lead to the adoption of developmentalist policies. Those states in poor parts of the world — often former imperial subjects — were later to adopt capitalist class relations, so their domestic capitalist class is smaller and weaker relative to international capital. Domestic elites therefore often need protection from foreign competitors, which is why they tend to rely more on the state than their wealthy-country counterparts.

Illustration by Ricardo Santos

This is precisely why nationalist ideologies are so appealing to political leaders in powerful, growing economies like China, Russia, and India. The state capitalist model of development depends on the idea that a technocratic elite can straddle the huge class divides that mark emerging capitalist economies and pursue policies that promote the “national interest.”

This idea of a unifying national interest is what justifies the power wielded by state capitalist planners in the name of the greater good. More often than not, this authority is used against workers. But sometimes it can be used against capital, too, with a view to ensuring the stability of the status quo. Just look at the Communist Party of China’s recent clampdown on the country’s tech billionaires. However, for elites to wield this power legitimately, people must identify with the idea of the nation. In the large and diverse societies of the Global South, where the centralized nation-state is a more recent innovation, political leaders have to work quite hard to strengthen the idea of the nation and ensure people’s loyalty to it.

One of the easiest ways to do this is to construct an internal or external scapegoat that can be held up as the enemy of the people. In India, for example, Modi’s Hindu nationalism scapegoats the country’s Muslim population. In China, the Uyghur Muslims in the country’s remote west have been targeted.

Externally, a foreign power is held up as enemy number one. In this sense, Donald Trump’s attempts to kindle a new cold war with China have been a gift to the country’s Communist Party. China’s elite can, not without reason, cast themselves as defenders of the plucky upstart nation, daring to challenge US hegemony while the world’s foremost military and economic power attempts to bully it into submission.

These strategies have been extremely successful in justifying elites’ attempts to centralize power and stifle dissent while facilitating capital accumulation. In all of the BRIC economies, nationalism, authoritarianism, and extreme inequality go hand in hand as the idea of the national interest is used to justify crackdowns on any group seen as a threat to the status quo.

With the West beset by stagnation, class conflict, and geopolitical turmoil, the state capitalist nationalism seen in the BRIC economies is only likely to grow. Leaders in these states will be able to point to the chaos engulfing the rich world as evidence of the superiority of their model of developmentalist authoritarianism. And as this nationalism strengthens, class consciousness and organization will weaken.

The question remains, however, as to how elites in the BRIC economies will deal with challenges like the cost-of-living crisis, demographic aging, and climate breakdown. Each of these factors implies lower growth rates than those upon which the stability of the developmentalist bargain is based.

If politicians fail to demonstrate that they are pursuing the national interest, they may lose their legitimacy. Cracks are already beginning to emerge in China, where the combination of economic stagnation, financial crisis, and state overreach in response to the COVID pandemic has sparked a popular backlash. And it is difficult to imagine how long the Russian economy can continue to rely almost entirely on natural gas revenues while being isolated from the rest of the world.

Politicians in these states will continue to blame their chosen scapegoats for any problems that do arise, while arguing that the only alternative to state capitalism is the decadent and sclerotic neoliberalism of the kind pursued in the rich world.

Some workers, thankfully, are beginning to fight back against the sterile dichotomy between democracy and development on which this argument relies. Workers in China, Brazil, and India have all been striking this year, and while the Russian government claims Russian workers don’t strike, there is evidence that several hundred strikes took place there in 2021.

In some cases, such as the 2020 nationwide general strikes in India, the largest in the country’s history, these actions have been based on extraordinarily broad coalitions among workers in the formal and informal sectors as well as farmers, academics, and activists. These actions are particularly damaging to the legitimacy of the nationalist regime because they challenge the idea that the country’s elites have a monopoly on defining and promoting the “national interest” — and that’s the thing every nationalist politician fears the most.