Rise of Populism and the emerging challenges to Globalization

1. Introduction

1.1 Globalism

Over the centuries, the crux of globalization has remained the same i.e. interactions with people, companies, and governments with other countries with the aim of international trade and exchange of ideas deemed best for all parties involved. It is the depth and extent of international trade which has significantly shifted over the years. Thomas L. Friedman In his book The World is Flat, graciously bifurcated the era of globalization into three periods: Globalization 1 (1491–1800) during which the countries were the protagonists; Globalization 2 (1800–200) wherein the companies became the protagonists and Globalization 3 (2000 — present) where the individuals themselves rightfully took over as the protagonists (Friedman). Globalization 1 consisted of Archaic and Proto globalization wherein territorial expansion was one of the main forms of establishing globalization, establishing critical trade routes such as the silk road, the birth of the Mongol Empire, the Age of Discovery, expansion of British East India Company, etc resulted in the globalization of crops, trade, ornaments, luxuries, knowledge, and technology. Globalization 2 began in the 19th century with the advent of Industrialization, booming economies, a growing population, and a stronger purchasing power sustaining the demand for commodities. This surge was alongside the continuing imperialism by powers such as England, wherein colonizers began the hunt for natural resources. For example, the European conquest of the Sub-Saharan African region yielded valuable natural resources such as rubber, diamonds, and coals which boosted trade between the super-powers, United States, and the European colonizers. However, in the 20th Century, there was a decline in the conduct of global trade and globalization due to the aftermath of World War 1 and the process of decolonization post World War 2. The latter resulted in breaking down barriers hampering international trade, famously the Bretton Woods conference where 730 delegates from 44 allied nations signed an agreement to lay down the framework for international commerce and finance, and the founding of several international institutions intended to oversee the process of globalization. Agreements like the General Agreement on Tariffs and Trade (GATT), North American Free Trade Agreement (NAFTA) European Union (EU), institutions like the World Trade Organization (WTO), International Monetary Fund (IMF), etc ensured the promotion of free trade, reduction of capital controls, etc. All these factors in addition to new developments in science, technology, transportation, growing employment, higher literacy rate, foreign education, global expansion of multinational corporations, and many more took globalization to soaring heights. Globalization 3 is even a bigger expansion due to growing capitalism but also brought on a wave of global recessions, market failures, mass unemployment, bankruptcy, massive corporate and government corruption cases, unchecked workings of superpowers, and constant economic decline. There has been a growing consensus as to a need for deglobalization and exclusion from corrupted world institutions. This consensus has been a strong factor in recent politics by populists speaking out for the frustrated citizens affected against the establishment.

1.2 Populism

Populism has been around since ancient Rome, originating from the word Populus meaning ‘the people’. Ever since its inception, populism has been used to describe numerous political movements with different goals. Though populism is often combined with other ideologies such as nationalism, liberalism, socialism, thus found at different locations along the left-right political spectrum, over time, all versions of populist movements have rebelled against monarchies, monopolies, mainstream politics, and established institutions. The Oxford English Dictionary defines populism as “a political approach that strives to appeal to ordinary people who feel that their concerns are disregarded by established elite groups”. For example, the 1890s Populist Party was based on the backs of rural and urban American farmers angered with the government’s stance on monetary policies, the Crop-lien system, and all such policies that had alienated the agrarian population. At the 1892 Farmer’s Alliance convention which gave birth to the People’s Party, Ignatius L. Donnelly stated, “…..We seek to restore the government of the republic to the hands of the ‘plain people’ with whom it originated…” (Kazin 54). That is the essence of populism, a political approach that strives to appeal to the will of ordinary people.

2. Analysing Globalism in the context of Populism

As mentioned while discussing Globalization 3, in recent years globalization popularly gathered backlash from populists as it brings in factors that supposedly disrupt their countries. One of the most common arguments against globalization is its relationship with unequal economic growth. Populists in developed countries believe that corporations can gain profits and growth by outsourcing jobs to those developing or underdeveloped countries with the lowest wages and weakest regulations. This severely impacts the employment rate in the developed countries and hedges out local businesses who have to compete against global conglomerates in various sectors such as shoes, clothes, toys, etc. Firms also threaten workers about outsourcing jobs to other countries if they do not accept lower wages. This has led to an ultimate decrease in the bargaining power of labor, which is related to the lower mobility of labor as compared to capital (Rodrik). Also, the remaining non-outsourced jobs in the developed country are divided amongst the citizens and the immigrant population. Immigration is one such example wherein capitalization, technology, infrastructure attracts immigrants to the developed countries to reap the benefits of globalization. Western countries also witness a continuous inflow of migrants due to the endless wars and instability in some countries such as the middle east. This gives rise to a cultural backlash which has led to growing resentment, racism, and xenophobia against the migrants, who are then usually blamed for the negative effects of economic crises (Zakaria). During his presidential campaign, Donald Trump tackled these issues by vouching for an ‘America First’ approach wherein he prioritized America in terms of global trade, alliances, production and famously capping the inflow of immigrants at just 15,000. The case against immigration also develops from an ethnic or religious perspective, indicating right-wing populism. This populist narrative– the politics of resentment — appeals to ‘the people’ who fear that their way of life will be destroyed, they will be deprived of dignity, and, finally, their religion or tradition will be disrespected. They are more susceptible to the narrative of populist leaders playing on emotions, fears, resentments, or unspecified frustrations, which (Panizza 54) defines as “unmet demands”. Resentment is about the attribution of blame and the demand for compensation of some kind from governments responsible for giving preferences, e.g. to business elites, bankers, or migrants who downsize the cost of labor.

(Rewizorski) Doni Rodrik suggests that the populist backlash against political elites and globalization can lead to the formation of new political factions or undermine the legitimacy of the existing institutions. In his view, populists may target liberal democracy and the established international order in two ways. One is that populist leaders can mobilize ‘the people’ along ethnonational/ cultural cleavages when the globalization shock becomes salient in the form of immigration and refugees. The second way of playing on resentment is to mobilize supporters along income/social class borders, where the globalization shock is rooted in the transformation of international trade and finance and becomes apparent to the poorer social strata of Western countries.

(Rudra and Tobin) These supporters are the ones who often believe they are left behind by the constantly upgrading society. Those countries with a comparative advantage in unskilled labor are expected to benefit from trade as it would lead to an increase in the price of the unskilled labor-intensive good. This would lead to higher employment, real wage benefits to unskilled labor, reduction in wage inequality, higher earnings, and purchasing power for the poor. However, these benefits could be nullified by weak political, economic institutions persist, and if there are no conditions in place for the poor to take advantage of those opportunities. Factors like poor, remote geography, fallacies in agricultural liberalization, high volatility in agricultural trade, absence of national policies conditing the relationship between globalization and development could be a barrier to the section of the society who were intended to benefit from international trade. In context, this marginalization is inevitably brought on by the transnational bureaucratic and business elite.

However, the underlying issue with governments reconstructing international alliances to prioritize national policies, setting themselves free from constraints set by international institutions, could be harmful as it would separate itself from the global trade, benefits, and accountability. The government would then amplify anti-globalization ideas, mirror foreign migrants, investments, trade agreements as evil, and continue to play on the fear of the populists. Interestingly, the left-wing and right-wing populists chant that globalization has adversely affected employment but do not campaign about how technological transformation and automation has also impacted employment. While populists tend to appeal to the frustrations of the people, complex situations like job automation cannot be easily fixed with just soundbites and campaign slogans. A common mechanism among populists is to hold foreigners as ‘scapegoats’, blaming them for all economic, cultural instability such as blaming Mexicans for taking jobs away from Americans, Indian politicians encouraging bigger quotas for regional natives, etc.

Populism is at odds with liberal democracy by excluding controversial areas from the democratic process altogether by putting independent, technocratic institutions in charge. It shatters the age-old constitutional agreement between elected representatives and the people that they will govern with the interests of the people at heart. And students have been learning from school the importance of liberal democracy — a form of government under which the interests of all citizens are represented by a body of elected officials who govern according to a set of constitutional laws. On the other hand, populists marginalize the minorities on the ground of religion, caste, color, race, etc and anyone with a different view are “speaking for the elite” (Mudde). Populists like Silvio Berlusconi in Italy, the Kaczyńskis in Poland, or Vladimír Mečiar in Slovakia regularly tried to circumvent or undermine the power of countervailing forces, including independent judges and the political opposition. In most cases, they were successfully opposed by other parts of the political structure — often with help from outside influences, most notably the European Union.

3. Conclusion

Everyone seems to be talking about populism in the past few years thanks to former President Donald Trump, Brexit, and a string of anti-establishment leaders and parties in Europe, Latin America, and Asia. Populists’ grievances about government failures are not entirely baseless considering there’s been increasing distrust regarding political parties and politicians, especially given corruption cases and election scandals. There has been a growing consensus amongst citizens that mainstream political parties have failed to meet the concerns of the populus, calling out the parties to be unresponsive and unaccountable.

(Grzymala-Busse et al.) However, the fact that populists want to transform the status quo, in the name of the people, means they can be disruptive to democratic norms and societal customs many people value. Populism’s black and white views and uncompromising stand lead to a polarised society and its majoritarian extremism denies legitimacy to opponents’ views and weakens the rights of minorities. Moreover, precisely because populists claim to represent “the people,” they have to define the people first and that often means excluding vulnerable and marginalized populations, such as religious or ethnic minorities and immigrants. While left-wing populism is often less exclusionary than right-wing populism, the main difference between them is not whether they exclude, but whom they exclude, which is largely determined by their accompanying ideology. For example, left-wing populists’ conceptions of “the people” and “the elite” generally coalesce around socioeconomic grievances, whereas right-wing populists’ conceptions of those groups generally tend to focus on socio-cultural issues such as immigration. Reconstructing the international economy with a stronger emphasis on sovereignty may open the door to pursuing distinctive national policies but dismantle the benefits of international institutional cooperation.

Perhaps the most feasible solution to the current malaise would be to choose a middle way between hyper-liberalism/hyper-globalization and a more national ‘policy space’ approach. A good practice would be to build up the perception of globalization as a fair necessity, maintaining trade policies that benefit the citizens, and most importantly, developing domestic policies in the context of evidence-based public policy. However, it is now more important than ever for parties across the political spectrum to appeal to the masses because disregarding them can generate long periods of political fragmentation and set the stage for a new wave of movements of crisis that vehemently reject the benefits of globalization. Only time will tell, what will define Globalism 4.

References

1. Friedman, Thomas. “It’s a Flat World, After All.” The New York Times, 3 Apr. 2005, www.nytimes.com/2005/04/03/magazine/its-a-flat-world-after-all.html.

2. Grzymala-Busse, Anna, et al. “Global Populisms and Their Challenges.” Stanford The Freeman Spogli Institute For International Studies, Mar. 2020, fsi.stanford.edu/global-populisms/global-populisms-and-their-challenges.

3.Kazin, Michael. The Populist Persuasion: An American History. 1st ed., Cornell University Press, 2014,

sgp1.digitaloceanspaces.com/proletarian-library/books/729bcae6d119261d4d54db8a36548be4.pdf.

4.Panizza, Francisco. Populism and the Mirror of Democracy. Verso, 2005.

5. Rewizorski, Marek. “Backlash Against Globalisation and the Shadow of Phobos.” Fudan Journal of the Humanities and Social Sciences, 9 Nov. 2020,

link.springer.com/article/10.1007/s40647–020–00308–0?error=cookies_not_supported&code=eda07d9c-5480–4f03–9a27–51e8fd9eb391.

6. Rodrik, Dani. “Populism and the Economics of Globalization.” Journal of International Business Policy, 22 Feb. 2018,

link.springer.com/article/10.1057/s42214–018–0001–4?error=cookies_not_supported&code=75069255–625b-4748–8267–723bb4ec3e62.

7. Rudra, Nita, and Jennifer Tobin. “When Does Globalization Help the Poor?” Annual Reviews, May 2017, doi.org/10.1146/annurev-polisci-051215–022754.

8. Zakaria, Fareed. “Populism on the March.” Foreign Affairs, 2016,

www.foreignaffairs.com/articles/united-states/2016-10-17/populism-march.