The Brexit vote and more recently the US presidential election suggest a noticeable rise of populism. Marion Laboure and Juergen Braunstein argue that this trend is not new. For example, Austrian Chancelor Schuessel’s invitation to the far-right freedom party to form a government in 1999/2000 caused upheaval in Europe, and beyond. Shortly after, during the French presidential elections in 2002, the far-right candidate Le Pen managed to gain enough votes to make it to the second round.
The rise of populism in 2016 has several potential explanations. Some commentators explain the US presidential election outcome as well as the Brexit vote as a form of protest with socio-economic origins. The tectonic plates upon which the socio-economic order of OECD countries rests have started to shift: opening new gaps while closing existing ones, and necessarily producing political change in the process. The 2008 Financial Crisis is only one aspect of these developments.
It is commonplace to assert that many citizens feel a loss of “control over their destiny”. Phrases along these lines are often found in popular media, and point to several fundamental dynamics and global shifts that play out along different social dimensions, including age, geography and education. Concrete observable implications of these shifts include, for instance, increasing inequality within countries and rising job insecurity. Giddens’ (1990) observation in The Consequences of Modernity, that as socio-economic systems become more complex they leave people with an increased sense of disempowerment, seems more pertinent than ever.
Globalisation – the “process by which businesses or other organizations develop international influence or start operating on an international scale” per the Oxford dictionary – has helped to close the economic gap between nations. Globalization makes competition global and has certainly benefited developing countries. This equalisation among nations took place via several mechanisms, notably production. It is much less expensive for a company to produce where workforce is cheap and resell manufactured products where purchasing power is high. Throughout the 1990s, the cumulated GDP of emerging countries represented barely a third of the cumulated GDP of the G7 countries. By 2016, this gap had virtually disappeared – reflecting the predictions of classical trade theory. Over the years, the gap tended to decline worldwide but to widen inside a country – a trend noted by Piketty in his best-selling book ‘Capital in the Twenty First Century’.