The underlying interconnectedness of populism, economic anxiety, and global politics is somewhat of a misunderstood phenomenon. There is not a defined causal relationship among the three concepts (yet). That said, there are claims by economists and political analysts as to how these matters can influence one another.
Understanding Populism
In its purest form, populism can be understood as a political ideology. When situated within the context of global politics, however, the ideology presents itself as a distinct communication style that separates the ‘elite’ from the ‘ordinary.’ A populist leader will identify with and vocalise their support for the ‘ordinary’ in attempt to leverage their trustworthiness and character, among other personal traits. And while many populists are quick to label their rivals as populists, they will rarely claim this title for themselves.
What is particularly unique about populist leaders is that they exist on both sides of the political spectrum. Take US President Donald Trump and Vermont Senator Bernie Sanders, for instance – the two have nearly polar opposite political agendas but can both be identified as populist leaders. While their communication styles are not one in the same, they both pinpoint their support for the ‘ordinary’ people. Some other notable populist leaders around the globe include the UK’s Jeremy Corbyn, Hungary’s Viktor Orban, and France’s Marine Le Pen.
Rising Economic Anxieties
It is no secret that money has long been a stressor for many. Market performance is not an exact science, hence financial events of all sorts – global market crashes, inflation, and rising unemployment, to name a few – are not particularly predictable occurrences. Though past financial crises can help market analysts understand what is to come, it is reasonable to conclude that unpredictability can contribute to anxiety (and in this case, economic anxiety).
Compared to other types of anxiety, economic anxiety proves to be especially acute. Clinical Psychologist Jenna Vyas-Lee defines the term as: ‘the stress, worry or unease people experience due to their financial situation, including concerns about money, debt, expenses and financial stability.’ This understanding infers that economic anxiety is, above all else, a feeling; since feelings are not synonymous with fact, economic anxiety is not necessarily a reflection of real-world financial events. That said, when a global financial crisis does take place, more widespread economic anxiety is likely to arise.
Like other mental health conditions, economic anxiety disproportionately impacts certain groups of individuals over others. A study conducted by EY found that those born between 1997-2007, defined as Generation Z (Gen Z), are especially prone to economic anxiety when compared to the generations that came before them. The report concluded that 52% of Gen Z ‘are very or extremely worried about not having enough money’, and that 69% ‘rate their current financial situation as only “fair” or worse’, along with 32% ‘rating their current finances as poor or very poor.’
Global Politics: Reshaped?
The intersection of populism, global politics, and economic anxiety is not simply understood. The contestation of populism’s meaning, and how it differs as an ideology and a practice, could be one explanation for this. Another answer could be that economic anxiety is not always a quantifiable condition – meaning it is trickier to measure its impact on global politics and populism. Therefore, it must be acknowledged that there are limitations for understanding how economic anxiety reshapes global politics, as well as how populism ties into the matter.
Despite these limitations, there are still academic conclusions that examine how populism, global politics, and economic anxiety are associated. After assessing relevant empirical evidence, political scientist Yotam Margalit found that populism is not necessarily a result of economic anxiety, rather it is a response to the widespread advancement of technology and deindustrialisation. He explains that these advancements contribute to an overall wider gap in ‘low and high skilled occupations’. This disparity, known as a ‘skill gap’, is defined by ‘the difference between the knowledge and skills required to complete a particular job, and the skills an employee or candidate actually has.’ Data published by London Economics points to the causal relationship among the skills gap and poor employer performance. In this context, poor employer performance includes: the loss of business, heightened operation costs, as well as delays in development of the employer’s latest services and/or products. Evidently, if the employer is struggling, their employee will be negatively impacted, allowing for economic anxiety to prosper. Thus, while populism is not a direct trigger of economic anxiety, it proves to be part of a sequence of events that lead to the condition.
While the previously described chain of events remains true, there are still a variety of alternative sequences of populist-forward occurrences that result in economic anxieties. Margalit explains that government response to financial crises can also foster populism. He cites the unemployment rise and loss in labour market participation in the United States, which took place just shortly after China joined the World Trade Organisation (WTO) in 2001. Additionally, worries of increased immigration and its economic impacts can also trigger populist support. Margalit explains that the ‘argument holds that competition posed by foreign workers, at least in certain sectors and labour market segments, has threatened jobs and wages of native workers.’
Though there is little empirical evidence that shows populism’s direct link to economic anxiety, the previously described instances prove that it can indeed influence an individual’s thoughts, feelings, and perceptions – their subjective assessments of the world that surrounds them. In turn, these assessments can alter one’s take on global politics, possibly affirming their support for populist leaders. Attempting to define the link between populism and economic anxiety is subjective, as Margalit describes: ‘Thus, in seeking to explain the growing populist vote, greater attention should be paid to people’s subjective assessments of economic change and the noneconomic influences underlying those assessments.’