The Rise of Populist Nationalism
The world experienced a political earthquake in the year 2016 with the British vote to leave the European Union in June and the election of Donald Trump as President of the United States in November. These events were the culmination of a longer-term trend away from the postwar liberal international order, one that had been building for at least a decade earlier, and marked the rise of a new form of populist nationalism. A critical question for the future concerns whether this is merely a "democratic recession," in the words of political sociologist Larry Diamond, or marks a longer-term downturn in the fortunes of liberal democracy worldwide.
For those who believe that liberal democracy constitutes the best form of government, the rise of populist nationalism is a very worrying phenomenon. The last time this happened in the 1930s, the Great Depression was deepened and prolonged by punitive tariffs and competitive devaluations, while Europe eventually plunged into World War II. The central question is then whether the current trend is actually just a democratic recession from which the world will eventually recover, or whether the forces visible today will strengthen and threaten liberal democracy as a form of government in more countries.
Recession or Full-Scale Depression?
Answering this question is not a matter of empirics or simple trend projection. Leadership and a variety of exogenous factors like the sudden appearance of military conflict or a new financial crisis will affect outcomes, as will decisions taken by individual leaders. Here we can only make a limited series of observations to support the case that we are in a recession rather than a full-scale depression, and that the world will not descend into a 1930s-style cataclysm.
(Not) Following in Other's Footsteps
First, the solutions proposed by populist nationalists to the social problems they face are likely to be self-defeating. Latin America experienced its populist wave about 10–15 years before Europe and the USA with the rise of Hugo Chavez. Chavismo has left Venezuela in ruins, but has also had a useful minatory effect on other countries in the region that do not want to follow it into long-term decline. Argentina, for example, flirted with populism for a decade under the Kirchners, but has since reverted to a more sensible centrist government and is recovering economically and politically.
There are policy steps that elites in Europe and the USA could take that would mitigate some of the underlying drivers of populism.
Dr. Francis Fukuyama
A second reason for hope is the fact that institutions in existing liberal democracies are much stronger than they were in the 1930s. There has been a great deal of social learning in the subsequent years; contemporary Germans, for example, are still aware of the threat that fascism posed to their society. While populist parties have made significant gains, they have not yet displaced the mainstream ones; in France, for example, they have been displaced by Emanuel Macron's new centrist movement. The checks and balances of the US constitutional system were designed in many ways to limit the damage that a "would-be Caesar" would pose to republican government. Those checks – the courts, federalism, the substantial powers vested in Congress, the decentralized nature of the executive, and the media – have all come under attack from President Trump, but have stood up fairly well until now.
Against Sources of Populist Discontent
Finally, there are policy steps that elites in Europe and the USA could take that would mitigate some of the underlying drivers of populism. Many observers have suggested a raft of economic policy measures that could lessen economic inequality and shore up existing middle classes. All of this is to the good and necessary given the technological forces driving inequality.
But fewer people have sought to address the cultural anxieties that are equally powerful sources of populist discontent. This would involve elites accepting the idea that states are territorial jurisdictions that have the right – indeed, the obligation as liberal democracies – to maintain control over their borders. For an entity like the EU, this would mean getting serious about control over its external borders. For Europe, it would mean acceptance of the fact that individual countries, as well as the EU as a whole, can legitimately take decisions regarding the speed and pace of immigration. For its part, the USA has been avoiding confronting serious immigration reform, which would inevitably involve balancing stronger enforcement of existing immigration laws with a path to citizenship for most of the 11 million undocumented aliens already in the country. At the same time, there needs to be a recognition that national identity is an important component of democratic self-government, and that identities need to be adjusted to meet the requirements of societies that have become de facto multicultural.
One of the advantages that democracy has over authoritarian government is its ability to make course corrections and hold accountable leaders who make bad policy mistakes. The future of democratic government in both Europe and North America will very much depend on how their political systems adapt to the large social forces that have been unleashed by globalization and technology.