The United States of Sanctions
The Use and Abuse of Economic Coercion
Populism has become an increasingly powerful political force in recent years. As exemplified by the election of U.S. President Donald Trump in the United States, the nativist Brexit campaign in the United Kingdom, and the competitive showing of National Front leader Marine Le Pen in France, populist forces have gained ground throughout the developed world. But populism is not limited to Europe and North America: Philippine President Rodrigo Duterte and Indian Prime Minister Narendra Modi have also used nationalist and populist rhetoric to achieve electoral success. And although the rise of populism is certainly not inexorable—Green Party candidate Alexander Van der Bellen defeated far-right nationalist Norbert Hofer in the 2016 Austrian presidential election, and centrist Emmanuel Macron trounced the nativist, anti-EU Le Pen in the second round of the French presidential election—it is difficult to argue that populist movements are categorically receding. After all, the recent electoral success of the Alternative für Deutschland (AfD) in Germany, a country with one of the most stable political systems in Europe, demonstrates that populist messaging continues to attract an audience. This suggests a worrying future for the international system because absent shared support for liberal values, multilateral institutions, pluralistic societies, and free trade, much of the institutional and normative glue holding the postwar order together will begin to dissolve.
As a contested concept, populism is difficult to define, and the sources of its success are perhaps even more difficult to isolate. Nonetheless, it is possible to identify unifying trends among populist parties and movements throughout the world. One clear facet of populism is a belief in the existence of a select group that stands in opposition to malevolent forces in control of the state. The manifestations of populism, however, vary based upon the specific circumstances of the country in which it resides. As noted theorist of populism Cas Mudde argues, “Thin-centred [sic] ideologies such as nationalism and populism habitually appear in combination with very different concepts and ideological traditions that are key to their capacity to make sense to larger constituencies.” Despite important variations among populist groups, their exclusive form of politics is a constant.
The unique nature of each populist narrative complicates the process of identifying the causes of populist sentiments and, by extension, makes it more difficult to combat populist movements. Some populist parties focus on ethnocultural tensions while others highlight economic inequities. In most cases, however, these issues are merged into convoluted narratives that exploit both cultural and economic fears. By way of illustration, consider some of Le Pen’s positions in the recent French presidential election. One of her major commitments, which suggested a more economically oriented populism, was a pledge to withdraw France from the European Union unless the EU transformed into a loose federation without any kind of common currency. This economic focus was further manifested in her promise to lower the retirement age, increase tariffs, and expand welfare benefits. Le Pen, however, also utilized ethnic fears to mobilize her supporters, committing to curb migration, provide free education to French nationals only, and prioritize French citizens in housing and employment decisions. These policies of cultural and ethnocultural populism also assumed a religious bent arising from Le Pen’s linkage of immigrants and refugees with terrorism and her threats to strip Muslim dual citizens of French citizenship if they held extreme views. In short, her policy preferences seemed to exploit both economic and ethnocultural fears.
Perhaps it is impossible to fully separate ethnocultural reasons for supporting populist parties from economic ones. But regardless of the particular motivations people have for supporting populist movements, successful populism of any kind poses a real threat to international cooperation and stability. Consider the economic views of populists such as Trump and Le Pen. Both seek to reimpose protectionist measures and undercut multilateral agreements such as NAFTA and the eurozone. These policies risk turning back the clock on trade liberalization and returning us to a world of zero-sum mercantilist politics.
Successful populism of any kind poses a real threat to international cooperation and stability.
To understand how dangerous such a world could be, compare the 2008 financial crash with the Great Depression. In 2008, multilateral cooperation and adroit intervention by international institutions ensured that the economic crisis never became as acute and desperate as that of the 1930s. Instead of a world war, we witnessed continued, if imperfect, collaboration and cooperation among the nations of the world. Not only would the large-scale success of populist parties make the world more vulnerable to economic shocks, it might also create an economic crisis in its own right by systematically disrupting global trade and financial flows. Fortunately, the international economic order is resilient, and it has so far been able to absorb the blows of Brexit and Trump. However, this has only been the case because most stakeholders are committed to upholding the system and have worked to support it in the face of the populist challenge. Were several more major economies to embrace populist parties, it is doubtful that the world could avoid another economic crisis.
The danger posed by ethnocultural populism is just as acute. Beyond fomenting domestic strife and ethnic polarization—a development increasingly witnessed at events such as the white supremacist march in Charlottesville, Virginia and the nationalist gathering in Warsaw during Poland’s Independence Day—this form of populism could also negatively impact international relations. For example, one can imagine an enduring enmity developing between the United States and Mexico given Trump’s inflammatory comments about the character of undocumented Mexican immigrants and insistence on building a border wall and renegotiating or withdrawing from NAFTA. Of course, integration of groups from different regional and cultural backgrounds is difficult, and certain concerns are valid. But when politicians exploit racial and religious fears to mobilize their political base, they risk creating lasting animosity both domestically and internationally. Finally, by defining values along religious or cultural lines, ethnocultural populists risk eroding liberal democracy, a core principle of the liberal order. As countries as varied as Iraq, Myanmar, and Thailand have demonstrated, unconstrained governments that attempt to create dominant in-groups by shutting out ethnic, political, and religious minorities create unstable and illiberal democratic systems. These regimes are antithetical to liberal values and are prone to destabilizing civil conflicts that can generate instability throughout entire regions.
Given the risks of populism, responsible stakeholders should seek to block its advance and push it back to the political fringes. Unfortunately, the diverse motives and political preferences of populist voters complicate this goal. Some voters are motivated by economic grievances, others by racial animus, many by both, and a few by other factors entirely. Pushing back against populist movements will, therefore, require a broad strategy that addresses both cultural and economic issues.
Perhaps the most effective way to combat the growth of populist movements is for mainstream political parties to more aggressively promote reform agendas that actually represent changes from status quo policies. The common refrain from the center that “there is no alternative” to the status quo is both uninspiring and incorrect. Instead of passively defending the status quo by informing aggrieved voters that they are wrong to feel angry and distressed, the center-right and center-left should provide meaningful reform proposals that offer to ameliorate the causes of voters’ anger. At the same time, moderate parties should attempt to offer a compelling and clear defense of the current liberal international order and the values that undergird it. By reminding voters of the multitudinous, if often hidden, benefits of a globalized and peaceful world, centrists can undermine excitement in the novel, but reckless, policies of populist demagogues. By developing and promoting a meaningful reform agenda within the framework of the current liberal order, centrists can signal to discontented voters that they take voters’ concerns seriously and plan to improve the system from the inside.
Beyond improving party messaging, non-populist countries should continue to promote liberal values and engage with international institutions. The recent resuscitation of the TPP agreement, despite the Trump administration’s withdrawal from that trade pact, is an example of this approach, and it serves to undermine the narrative that there is a great populist wave throughout the world. Countries must be careful not to directly condemn populist parties simply due to their principles, though, as this approach risks creating a “rally 'round the flag” effect in which citizens perceive an attack on the ruling party as an attack against their country and choose to support the incumbent populists against foreign condemnation. In other words, countries should combat populism indirectly through promotion of trade and international institutionalism rather than force the issue with sanctions and rhetorical condemnation.
Populism is a somewhat nebulous and slippery concept with several causes and many manifestations, making it a difficult force to isolate and contest. Yet the risks it poses to the stability of the international system demand that action be taken to prevent the entrenchment of populist parties throughout the world. By developing innovative new platforms and demonstrating a commitment to the foundations of the international order, the center can hold. But meaningful action must be taken now to ensure the international order is not swamped by the populist wave.
The 2017 Foreign Affairs Student Essay Competition was conducted in partnership with the Lee Kuan Yew School of Public Policy at the National University of Singapore (NUS). To learn about the school, its programs and degrees, click here.