The rise of pop­ulism

2016 has been a tor­rid year for in­ter­na­tional pol­i­tics. From Brexit to the re­cent elec­tion of Don­ald Trump as the 54th US pres­i­dent, the rise in pop­ulism and pro­tec­tion­ist views has brought deep ide­o­log­i­cal di­vides to the fore. So what is fu­elling this tr

Finweek English Edition - - COVER POPULISM - By Jana Ja­cobs

speak­ing at a break­fast ad­dress at the Gor­don In­sti­tute of Busi­ness Science (Gibs) in Novem­ber, out­go­ing US am­bas­sador to South Africa Pa­trick Gas­pard likened the “rough and tum­ble” of the US elec­tion to a re­al­ity show. Fit­ting anal­ogy, as the 54th pres­i­dent of the US, Don­ald Trump, is no stranger to the medium. How­ever, the re­al­ity of his elec­tion has proven a bit­ter pill to swal­low and, un­for­tu­nately, can’t be dis­missed as mind­less en­ter­tain­ment any­more.

Whether or not you were in shock on the morn­ing of 9 Novem­ber, a lot of peo­ple would have been ask­ing how this hap­pened. And why. Surely a man who has pro­mul­gated racist, misog­y­nis­tic and other very ques­tion­able views (not to men­tion the fact that he has never held pub­lic of­fice and more of­ten than not dis­re­gards facts) could not win the high­est of­fice in the US. But he did.

Speak­ing re­cently at the Dis­cov­ery Lead­er­ship Sum­mit, Scot­tish his­to­rian Niall Fer­gu­son un­packed the his­tory of pop­ulism around the globe, find­ing that at present it is re­ally the north­ern hemi­sphere see­ing a rise in this. Whereas the south­ern hemi­sphere, par­tic­u­larly South Amer­i­can coun­tries, al­ready tried this ex­per­i­ment and saw that it didn’t work.

But if Brexit and Trump hap­pened, what are the chances of more pop­ulist wins around the globe – no­tably con­ti­nen­tal Europe, which is see­ing a rise in pop­u­lar­ity of con­ser­va­tive right-wing politi­cians?

In Europe, the Syr­ian refugee cri­sis has led to heavy anti-im­mi­gra­tion and anti-glob­al­i­sa­tion sen­ti­ment, with con­ser­va­tive right-wing par­ties lead­ing the charge. In France, the first round of the pres­i­den­tial elec­tion takes place on 23 April. The leader of the far-right Na­tional Front party, Ma­rine Le Pen – who has been ahead in polls – has called for a with­drawal from the EU and has ex­pressed anti-im­mi­gra­tion pol­icy ob­jec­tives. Un­pre­dictably, François Fil­lon, the leader of the cen­treright Repub­li­can Party, won a vote on 27 Novem­ber to run in the race. He has sim­i­lar for­eign pol­icy and im­mi­gra­tion views as Le Pen, and is seen as a strong con­tender for the coun­try’s top po­si­tion.

Italy held a con­sti­tu­tional ref­er­en­dum on 4 De­cem­ber, which saw Prime Min­is­ter Mat­teo Renzi re­sign­ing af­ter Ital­ians voted against chang­ing the con­sti­tu­tion. The three op­po­si­tion par­ties in the wings are all in favour of ex­it­ing the euro should they come to power. Mean­while, also on 4 De­cem­ber, Aus­tri­ans re­jected far-right pres­i­den­tial can­di­date Nor­bert Hofer, with Alexan­der Van der Bellen nar­rowly clinch­ing the vic­tory. How­ever, con­cerns re­main that the Nether­lands’ gen­eral elec­tions in March could fol­low Europe’s right-wing surge.

So what does this mean?

Many the­o­ries have done the rounds in the af­ter­math of the US elec­tion, and par­al­lels have been drawn with the un­ex­pected Brexit out­come as well as a surge in pop­ulism in con­ti­nen­tal Europe. The un­pre­dictabil­ity of the po­lit­i­cal land­scape does make it dif­fi­cult – and risky – to fore­cast the fu­ture.

Fur­ther, the US case in par­tic­u­lar is un­prece­dented: The rise of a po­lit­i­cally in­ex­pe­ri­enced busi­ness ty­coon cum re­al­ity star and beauty pageant mogul mak­ing a move from his pent­house in Man­hat­tan to the White House in Wash­ing­ton. In the case of the UK and con­ti­nen­tal Europe, the po­lit­i­cal play­ers have some cre­den­tials and have been in the game for some time – al­beit they are pro­mul­gat­ing sim­i­lar na­tion­al­is­tic views.

Says Yan­nick Thiem, as­so­ciate pro­fes­sor of phi­los­o­phy at Vil­lanova Uni­ver­sity in the US: “First of all, we need to un­der­stand ‘Trump’ as a symp­tom rather than as a cause of the cur­rent sit­u­a­tion. There were plenty of xeno­pho­bic, racist, sex­ist, and eco­nomic fears con­verg­ing in com­plex ways al­ready. An enor­mous fac­tor also was a feel­ing of ‘[to hell with it], the sys­tem is bro­ken, let’s try some­thing else’ on the side of peo­ple who also al­ready har­bour un­con­scious racist and sex­ist sen­ti­ments. Trump is a symp­tom of the re­al­ity that An­glo-Amer­i­can lib­er­al­ism and Clin­ton­ism is a failed ex­per­i­ment.”

And the ca­co­phonic noise – from Trump him­self and his sup­port­ers – is pop­ulism at work. As Pro­fes­sor John Strem­lau, vis­it­ing pro­fes­sor in the de­part­ment of in­ter­na­tional re­la­tions at Wits Uni­ver­sity, de­scribes it: “[It’s] a demo­cratic ex­pres­sion of peo­ple feel­ing their voices aren’t be­ing heard.” The prob­lem with this is that in ac­com­mo­dat­ing this process, it can­not be done at the ex­pense – as is the case in the US – of African Amer­i­cans and oth­ers, he warns.

Trump’s voice is mak­ing prom­ises that will see to just that. In his first tele­vised

speech about his plans for his first 100 days in of­fice, Trump’s rhetoric re­mained true to his cam­paign slo­gan, mak­ing it clear that his aim is to put Amer­ica first, bring back “OUR jobs and re­build the mid­dle class”.

“My sense is that a lot of peo­ple who I know voted for Trump did so be­cause they feel their lives have be­come pre­car­i­ous or are on the verge of be­com­ing pre­car­i­ous. The ne­olib­eral econ­omy and glob­al­i­sa­tion have not only eroded man­u­fac­tur­ing and other for­merly im­por­tant and well-pay­ing sec­tors of our econ­omy, we all, nearly, re­gard­less of whether we al­ready are ex­pe­ri­enc­ing ma­te­ri­ally eco­nomic pre­car­ity, feel the un­cer­tainty and eco­nomic threat. Many peo­ple I know who voted for Trump wanted change. Clin­ton seemed like more of the same,” says Thiem.

It’s clear that the dis­con­tent was un­der­es­ti­mated in the US. And if they got it wrong, then it is very likely that Europe could too – Brexit proved the pre­car­ity felt by vot­ers there.

Should pop­ulism take hold in con­ti­nen­tal Europe, and bring with it in­creased pro­tec­tion­ism and in­ward-look­ing poli­cies, the im­pli­ca­tions for global growth and trade are con­cern­ing.

(Anti) glob­al­i­sa­tion – not ev­ery­one is get­ting an equal share of the pie

It is ex­tremely im­por­tant to note that each coun­try is unique in its prob­lems, says Strem­lau. So pre­dict­ing the out­come of up­com­ing elec­tions and ref­er­en­dums in Europe is risky, at best.

On the glob­al­i­sa­tion tip, as pos­i­tive as it has been, it is not a one-sided coin. Speak­ing at the Old Mutual Cor­po­rate Wis­dom Fo­rum Gala Din­ner in Jo­han­nes­burg in early Novem­ber, Amer­i­can econ­o­mist Jef­frey Sachs pointed out that, “Glob­al­i­sa­tion has been a ma­jor source of eco­nomic growth for decades, es­pe­cially in coun­tries like China… The re­sults, how­ever, are not uni­form across all coun­tries, and within coun­tries the ben­e­fits are also not equally shared, which is a big part of the prob­lem.”

This sen­ti­ment con­trib­utes heav­ily to the antiglob­al­i­sa­tion move­ment, and is fu­elled in Europe by the Syr­ian refugee cri­sis.

On the im­mi­gra­tion front, there is an im­por­tant dis­tinc­tion when it comes to the is­sue of mi­grants in the US and Europe. Strem­lau be­lieves that in terms of giv­ing enough feel­ing of com­fort for iden­tity groups, there has been a lot of progress in the US, whereas in Europe there is a lot more dis­com­fort and un­cer­tainty. At this stage, there are sec­ond- and third-gen­er­a­tion im­mi­grants legally in the US. “My im­pres­sion is that in Europe [the case of] the ‘other’ that comes in is a lot more sen­si­tive and real than the huge pop­u­la­tion liv­ing legally in the US.”

In a coun­try like France, which has the high­est con­cen­tra­tion of Mus­lims liv­ing in a Euro­pean coun­try and has been marred by a spate of ter­ror­ist at­tacks, il­le­gal im­mi­grants are of con­cern to cit­i­zens and could just push them to cast­ing their votes to the right.

A new world or­der?

Should pop­ulism take hold in con­ti­nen­tal Europe, and bring with it in­creased pro­tec­tion­ism and in­ward-look­ing poli­cies, the im­pli­ca­tions for global growth and trade are con­cern­ing. Al­ready Trump, as an ex­am­ple, has made it clear that he will be with­draw­ing the US from the Trans-Pa­cific-Part­ner­ship (TPP) when he takes of­fice.

Says Arthur Kamp, in­vest­ment econ­o­mist at San­lam In­vest­ments: “I think this is con­cern­ing when viewed against the back­drop of a loss in global trade lib­er­al­i­sa­tion mo­men­tum gen­er­ally… On cur­rent in­for­ma­tion it ap­pears as though the best we can hope for is that the sta­tus quo is main­tained, i.e. no new deals are signed (although bi­lat­eral deals be­tween the US and spe­cific coun­tries are a pos­si­bil­ity), while the US also re­frains from in­tro­duc­ing new pro­tec­tion­ist mea­sures. But even this would not be ideal. Trade lib­er­al­i­sa­tion has al­ready lost mo­men­tum in the post-global fi­nan­cial cri­sis en­vi­ron­ment and more pro­tec­tion­ist mea­sures are ev­i­dent. This must, at least in part, ex­plain the weak­ness in global goods trade.”

More­over, trade fos­ters com­pe­ti­tion and can pro­mote in­vest­ment and fur­ther trans­fer of tech­nol­ogy, adds Kamp. “In other words, it en­cour­ages in­no­va­tion and drives pro­duc­tiv­ity – a key in­gre­di­ent re­quired to grow economies. This does not mean we should ig­nore work­ers ad­versely af­fected by trade deals. It’s just that we should ask whether they would not be bet­ter served with more ef­fi­cient safety nets and re-skilling ini­tia­tives.”

Too bad a can­di­date like Trump is more per­son­al­ity, lit­tle pol­icy.

Strem­lau em­pha­sises that Trump should serve as a warn­ing to the rest of the world and ad­vises that cit­i­zen obli­ga­tion must take a front seat. His pop­ulism pre­dic­tion? “Who knows?”

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