The West's populist rise

Updated: Jul 21, 2020

The recent wave of elected populist was foreseable. A couple of factors, immigration, inneficient redistribution systems, and the corruption of liberal elites, have proven fundamental in the success populist movements have recently had in the so-called Western world.

The West has experienced many populist leaders and ideas rising to power in the past few years. Donald Trump in the USA, the Brexit decision, the Salvini/Di Maio populist government in Italy, the rise of Obrador to the Mexican presidency, and the decline of Merkel in Germany are all major examples of this trend. Furthermore, the more illiberal elements in the Czech Republic, Austria, and Hungary, only exacerbates the political decline of the West’s liberal orthodoxy it once championed after the fall of the USSR. While there are a few major exceptions to this trend such as France and Spain, they are certainly not the rule. The rise of authoritarian, populist leaders and the decline of liberalism in the West can be contributed to three major factors: immigration, inefficient redistribution systems, and corruption of liberal elites. As I discuss these problems throughout this article, I will also propose solutions to solve this immense regional issue the Western world faces this era.

Huge resentment of neoliberalism has led to the rise of populists in all the countries I have mentioned. While neoliberalism acknowledges positive relative gains for their citizens through free trade and globalization, those gains are not absolute nor distributed to every working citizen. In some areas of neoliberal countries, progress either stalling or regressing. (1) The emphasis on relative gains leaves room for major concentrations of people who are the losers in the globalized world. Jobs, industry, and capital inflows have led to their converse outflows from the West. The deindustrialization beginning in the 80s in America show the start of this process.(2) Factories were reassigned to predominantly developing Asian countries where the cost of labor was much cheaper, enabling higher profits and a manufacturing boom as a result. (3)This has led to the power of labor and unions to decrease dramatically since that time. This trend has had a critical impact on the political leanings of many Western citizens. They demand jobs and have a negative view of immigrants and foreign influence. The neoliberal elites that have told them that free trade is for every citizens’ benefit have lost their credibility to those opposition groups as neoliberal policies favor factory displacement abroad in order to increase profit. While the elites and politicians have stuck to their rose-tinted ideology, the reality has been much more dark. The people have seen this and voted accordingly. Now any politician with enough visibility that speaks against the “establishment” and wants to expel outsiders in order to concentrate on the well-being of their citizens has now become empowered through democracy in many Western countries.

This leads to the second cause of the recent populist rise: immigration. In particular, Germany has received the more immigrants than any other country. This has led to a culture clash and negative stereotypes from the native populace with respect to foreign immigrants. The rare immigrant crime cases have only served to exacerbate the feeling of resentment and latent xenophobia among an increasing number of Westerners, which populist candidates have used to justify their "anti-immigration/foreign influence" stance at the expense of the liberal elites.(4) There is a widespread problem concerning the welfare state and immigrants throughout these nations. In some places, immigrants are not thought to be deserving of the native citizens’ social benefits if they do not have job or contribute to that same system. This feeling of “unfairness” has only lead to a rapid rise of populists, capitalizing on how immigrants are stealing citizens’ welfare.

A bigger problem thus arises, which is the lack of government investment in better social programs that redistribute the gains from globalization to those who lost from the same process. One example is India where it has managed to maintain high levels of economic growth while huge inequality and poverty have persisted.(5) A flagrant example of this is America’s Social Security Program estimated collapse in the 2030s if there is no major restructuring or replacement program put in place made before that deadline.(6) Both Democratic and Republican leaders’ hands off approach towards the market combined with the conservative small government theme has precluded any possibility of a better welfare state ever coming into play in America’s future. In places where inefficient distribution systems and corruption is less of a problem such as Scandinavian countries, finding ways to integrate immigrants into understanding and accepting the Western government system still proves to be tricky and generates discontent among their citizens.(7) For all these major issues causing authoritarian populists to rule, creative solutions need to be found in order to counteract them and their symptomatic offspring.

First, countries need to take time and money in order to invest in a more just, efficient, and well-regulated immigration system, especially in the USA, where it has an infamous track record. Immigrants should not be vilified because they play a vital role in the economy.(8) They are not just mooching off of the system and freedoms of their host country. Countries also need to do a better job of allocating public goods to immigrants. Basic needs should be provided, but immigrants cannot be allowed to reap all the benefits of a foreign country’s welfare state without contributing anything through taxes. Immigrants should be encouraged to get jobs and there should be programs that help integrate them into the culture and economy of the foreign country. Lastly, liberal elites need to realize or admit the fact that globalization comes with undesired, negative effects and does not benefit every citizen equally. Some people get a major boost while others get left behind. For example, the Gini coefficient of the USA, which measures income inequality across households in America, has shown that the coefficient was 34.5 in 1979 and increased to 41.5 in 2016 with 100 being considered completely inequal.(9) Without realizing that fact, they only add fuel to the populist fire and show that liberalism is no longer concerned with the struggles of their citizenry. Social programs need to be expanded. Government should play a larger role in supervising special interests like corporations and big banks without going so far as to stifle innovation, profits, and business. This helps prevent and terminate corruption of the powerful for the creation and maintenance of a more equitable society and trustworthy government while still reaping the profits of a capitalist system. More programs designed to retrain people losing jobs to globalization should be made so that hostility to a macroeconomically beneficial free trade world is not a problem. The government should emphasize investment in industries such as new technology and green energy rather than more outdated ones being outsourced abroad to less developed countries for consumers to have cheaper goods. With all of these in place, the populist fervor will be pacified and the authoritarian leaders will slowly disappear with it, leading to better governance across the Western world and a fading fear of big government and their cronies among the people.

By Mitchem Callahan

Co-Founder and Vice President, AfterThought Group

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