After Donald Trump decisively defeated Hillary Clinton, becoming the 45th president of the United States (US) on Wednesday, it became clear that the phenomenon of rising support for populist parties all around the globe has disrupted the politics of many western societies.
Economic angst is one of the main reasons behind the rise of populism and isolationism. When the globalisation age began following the fall of the Berlin Wall, it was once hailed for the free movement of capital, goods, and people, with the assumption that it would bring economic growth.
There is a strong perception that the rise of inequality and the absence of inclusion arises from the fact that globalisation benefits the rich and discriminates against the poor. This perception motivated the Leave camp in Britain, and feeds into populist movements elsewhere in Europe, such as the French National Front, and, on the other side of the Atlantic, notably in the Donald Trump phenomenon in the US.
However in recent decades, the real income of most people—especially in western countries—has declined, despite the substantial economic growth achieved. All the gains have gone to the top 10% of the population, mainly to the top 1%.
Consequently, economic inequality has been aggravated by the growing mobility of capital and labour, increased automation and outsourcing, and government failures to regulate investment decisions by multinational corporations. In the US and Europe, the anger and frustration from this turn of events has fuelled the rise of Trump, the United Kingdom Independence Party (UKIP) in the UK, and the far-right National Front led by Marine Le Pen in France.
Blue collar voters who lost their jobs in the “rust belt states” (Illinois, Indiana, Michigan, Ohio, and Pennsylvania) have carried Trump to the White House—he was able to win in all of them except for Illinois. These are the states that were most affected by trade agreements such as the North American Free Trade Agreement (NAFTA). People who lost their jobs blame it on the establishment and viewed Trump’s stance against such agreements and his promise to bring jobs back to America as their last hope after being left behind by the economy.
To conclude, isolationism and populism will keep rising, while globalisation is failing, unless legitimate fears and concerns are addressed and a way to reduce economic inequality is found.
Clearly more enlightened policies are needed—ones that should consider the powerful pressures now bearing down on a large portion of workers, accompanied by social safety net programmes for retraining, relocation allowances, job finding assistance, and more unemployment insurances.
