Abstract

Why do populists emphasize offshoring as a cause of manufacturing job losses when automation is at least as significant a culprit? Why have voters predominantly responded to automation and offshoring shocks by demanding a retreat from globalization but not transfers to the unemployed? We propose that both questions are explained by the collision of economic nationalism and comparative advantage trade. Economic nationalists who value their state’s self-sufficiency are hesitant to support policies that could hamper their own state’s comparative advantage industries, like regulations of high-tech automation. They are more comfortable with tariffs restricting imports. In the United States, which has a comparative advantage in the production of capital intensive automation technologies, this effect undercuts the willingness of voters to support policies that would protect manufacturing jobs by reducing the ability of American firms to sell technology. Opportunistic populist politicians emphasize offshoring because economic nationalist voters are unified in their support for limiting imports but divided in their support for limiting automation. We develop a formal model of nationalist demand for policy in response to economic dislocation, where citizens form preferences over redistribution plans and a policy response that blunts dislocation (like a tariff or a restriction on automation). The source (foreign versus domestic) and type (labor versus automation) of a shock affects the preferred weights citizens place on each policy. We test the model’s predictions with a survey experiment fielded in the United States. Consistent with expectations, domestic automation shocks increase the weight respondents place on redistribution versus a regulatory response, while globalization shocks place much heavier weight on regulatory (tariff) responses. Altering the source of each shock – by emphasizing foreign-produced automation technology or within-country labor relocation – reweights responses towards regulations in the former case and redistribution in the latter case. Our findings contribute to our understanding of the political consequences of the current populist moment as well as the future consequences and remedies for automation shocks.