Neoliberalism was supposed to be the late 20th Century’s crowning achievement. Its vision of ever-expanding global prosperity promised to end poverty forever, while the personal freedoms that were supposed to arise in its wake would make even the hardened dictatorship of Communist China see the error of their ways. The giddiness surrounding this new world order is best expressed by political theorist Francis Fukuyama famous claim that neoliberal, democratic societies would bring about “the end of history”.
History, it seems, isn’t quite dead yet. Whether of the Right or the Left variety, populism is essentially a critique of neoliberalism’s perceived failings. As these movements gain political steam throughout the West, it’s time to rediscover the true meaning of neoliberalism.
Neoliberalism’s emphasis on the free flow of goods, money, and people exposes those without strong job skills to economic competition from foreigners – a competition they find very hard to win. It’s no surprise, then, that populist movements rooted in these communities focus on restricting the very competition that neoliberalism insists upon.
They also tend to support high degrees of social spending to alleviate the economic pain neoliberal-inspired competition creates. Populists like Donald Trump often reject cuts to pension or health services, and frequently support increased spending in areas like family benefits.
Yet at the same time, right-wing populists do not reject the concept of the liberal economic order. They often call for tax cuts to stimulate the economy. Italy’s Lega, for example, proposes a 20% flat income tax, a dramatic change from Italy’s current progressive system with a top rate of 43%. Right-wing populists also tend not to criticise capitalism itself.
That cannot be said about left-wing populist critiques. This type of populism adopts a much more systematic critique of the neoliberal order. Rather than focus on limiting or reforming the principle of free movement, it goes to the heart of the liberal economic order itself: the ability of private parties to accumulate and distribute capital according to their preferences.
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