We are living a paradox.
On one hand, globalization is steadily increasing. Free trade, international agreements, technology development, they all contribute to this rapid growth which we are experiencing and which could get even stronger. Because of this growth, company “giants” such as Amazon, Google, Facebook, Apple, etc., have risen, increasing our living-standards significantly. As consumers, we have a globalised behaviour. We like to buy in international companies, have access to whatever we want in any part of the world, and of course, we like cheaper prices, cheaper holidays, cheaper goods.
On the other hand, most of us identify ourselves with a concrete culture or country. Globalisation has a big impact in our lives but it has not yet erased the boundaries across cultures. We therefore tend to have a national identity, and in an aim to persevere our cultures we rely on language and traditions: an increasingly discussed topic – populism. As citizens, we are going back to a populist behaviour. While we are living on this globalised peak, we still want to have an identity, reinforce it and prove that is better than the rest. Of course globalisation has given us a whole new international mindset (50 years ago we wouldn’t even have considered to study abroad) but it has also made us aware of our own identities. Where do we really belong to?
First of all, we should ask ourselves what populism is. Populism is defined by the Oxford dictionary as a “political approach that strives to appeal to ordinary people who feel that their concerns are disregarded by established elite groups”. Unlike any other political currents, populism is not inherently left or right; what populists have in common is not their political inclination, but the way they conduct politics: populist politicians claim to represent the interest of average or working class citizens. The idea behind populism is to recover the national identity, which often implies an idealisation of the past. With globalisation, boundaries are blurred, and cultures tend to blend.
Populism in Europe, however, has been found to show in general terms an inclination towards the right: A Bloomberg analysis of decades of election results across 22 European countries showed that support for populist radical-right parties is now higher than it’s been at any time over the past 30 years.
The more populist radical right parties in Europe have combined populist, nativist, and authoritarian strains which, according to the academics, show clear commonalities. Its largest impact has been in Eastern Europe. Scandinavia has had a relative success with 20 percent of the votes breached in several countries. In France, the National Front has had a strong impact on those areas with strongest anti-globalisation sentiments. In Germany and Austria, right-wing populist parties reflect the anti-immigration sentiment that has been developed over the last years. Overall, there is a powerful populist shift emerging in politics around the world, and Europe is not an exception.
So how has this surge in populism developed? Job instability has been one important factor. The decline of the industrial working class (partly because of the technological progress, partly because of globalisation) has created the need to readjust, resulting in migration and immigration. All in all, this opening to the world has brought cultural changes of various kinds. These cultural changes and the economic factors associated with the decline of the Western middle class increased disaffection among citizens, but according to many economists, it was the global financial crisis that led to the populist surge. In fact, it has been found that after the Great Recession of 2008, those countries which were most adversely affected have now a strongest populist surge.
Populism has many social and political consequences, name racism or xenophobia. But it also affects the state of the economy. A notable consequence of populism nowadays is the rise of protectionism and the trade barriers such as tariffs or quotas that a specific country can impose in order to protect its national economy. Since our markets follow a globalised pattern, these trade barriers can harm some other markets. If the harmed countries decide to retaliate against these tariffs and impose their own ones, a so-called trade war originates. Increased protection causes both nations’ output compositions to move towards their autarky position (i.e. economic systems of self-sufficiency and limited trade).
But are tariffs or quotas beneficial within a country? A difficult question to answer, and as always, it might depend. A trade war raises prices for imported products right away and it gives a competitive advantage to domestic producers of the taxed product. Certainly, rising tariffs can protect a country’s industries from international pressure, but without foreign competition, companies within the national industry don’t need to innovate and may decline over the time compared to foreign production. Another factor to consider is that in limiting trade, a government risks making the product too expensive for its people to afford. Finally, protectionist trade policies have been one of the primary factors cited for deepening the Great Depression; in the long term, trade wars slow economic growth, since they create more and more layoffs as foreign countries decide to retaliate.
We can illustrate this issue with several examples:
In 1886, Italy raised tariffs to a 60 percent to protect its industries from French competition. As a response, the French government threatened the Italians with punitive tariffs if Italy did not lower its own. Tariff retaliation followed tariff retaliation. Both nations felt the costs of the trade war, but the damage extended more widely. Franco-Italian trade fell drastically, followed by dislocations in countries where they got supplies.
In another example, the Smoot-Hawley Tariff Act of 1930 (a piece of U.S. legislation raising import duties to protect American businesses and farmers), raised duties on hundreds of imports. Canada and Europe responded with tariffs increases as well. This retaliation has been cited as one important factor that added economic strain to countries during the Great Depression.
As shown by these two examples, it can be seen that tariffs and quotas have a great impact on the economy, not only nationally, but also internationally. Protectionism is one of the principal measures populist parties try to take in order to rise the economy of their countries, but if it is important protect a nation’s economy, it is also important to be aware that nationalistic politics do not overwhelm the wider interest in an open trading system.
Anyhow, the world is constantly changing. Anti-globalisation sentiment is growing in politics, and identity politics, whether over ethnicity, language, religion or sexuality, is fast displacing class as the defining characteristic of contemporary politics. Some political scientists describe populism as a malfunction of democracy; is it maybe a response to irresponsible democracy? Because of the diverse world we live in nowadays, the rise of populism is understandable, but we should be aware that the pride of our own country does not blind us from the fact that we only have one world, one that we all share with each other.