Populism

Populist groups have also established themselves in the European Parliament: it was the struggle for votes between the representatives of a “Europe of the Fatherlands” and the pro-Europeans that determined the election in May 2019. The final outcome awarded the right-wing populist group 73 out of 750 seats in the new European Parliament. Populists question the foundations of our economic and social order – not only European integration and pluralism, but also free markets for goods and factors.

In Germany, the results of the state elections in Saxony and Brandenburg in September 2019 show that voter preferences are changing. On the fringes of the established parties, space is emerging for new, sometimes radical groupings. The two major people’s parties have suffered heavy losses, while the AfD has established itself as the third-strongest force.

What Is Populism?

The word populism comes from populus, Latin for “the people.” Populists claim to represent “the common people” in contrast to the “elite,” which they portray as corrupt and guilty of stealing the people’s wealth and identity. Populists paint themselves as truly looking out for the interests of the people, the “common man on the street,” and declare that their policies express the true will of the people. Populists assert that they make policies for those who are afraid for their status in society and feel abandoned by the political establishment. They accuse the “ruling elite” of failure, and they hold globalization and international trade responsible for economic difficulties. They reject migration as well as European economic and political integration. For them, the creation of supranational institutions, the internal market, and the euro are evidence of a loss of national sovereignty. Populist politics rejects compromises and the separation of powers, instead strongly preferring simplistic solutions.

Why Are They So Successful?

Many believe the advance of globalization – including international trade, capital mobility, and especially migration – and the resulting growth in inequality to be a breeding ground for populist currents. Another promoting factor is how economic crises lead to debt, unemployment, and wage stagnation. For instance, the financial crisis was followed by a global recession and a eurozone debt crisis. This gives people the impression of a loss in prosperity, such that they fear social decline and feel both “disconnected” economically and shut out from social cohesion. Moreover, populist parties owe much of their success to information gaps, people’s insecurity and prejudices about other cultures and religions, and insufficient education.

What Are the Right Answers to Populism?

As part of its research activities, the ifo Institute is concerned with the question of which social channels and local networks populists use, how these benefit them, and what role other factors such as historical roots, trust in the political establishment, education, or inequality play in the success of populist parties. Felix Rösel from the ifo Institute’s Dresden Branch demonstrates that what the AfD’s stronger showing in the 2017 Bundestag elections in eastern Germany embodies is not a feeling of economic injustice but a rejection of social diversity and state institutions. Tolerance and trust are lacking.

According to ifo President Clemens Fuest, the answer to populism is not a welfare state that regulates everything, but liberal economic policy. Prosperity and freedom are founded on competition and open markets, accompanied by effective regulation, a strong welfare state, and diversity.