In “Economic Theory and Nationalism,” written in 1934, the economist Frank Knight identified two tendencies—one towards gross inequality and the other towards new techniques of influence—that appeared to be leading to fascism in liberal democracies. Knight’s predictions were wrong in the 1930s. But his comments suggest interesting questions about economic history in a period of renewed nationalism, “intolerable insecurity,” and, in Knight’s words, “contempt for truth.”
The paper examines the political and economic circumstances in which Frank Knight wrote "Economic Theory and Nationalism" in 1934–1935 and the changing politics of state power in relation to economic life. It points to new possibilities for an economic history of the state and of government in economic life.
