There is rise of right-wing politics in several countries of the world. Brexit in the UK and the election of Donald Trump in the US demonstrate the popularity of right-wing politics in various parts of the world. Also, right-wing politics is gaining traction in countries like France and Germany. Backed by populism, right-wing politics is becoming more and more popular and widespread in several countries.
The rise and popularity of right-wing politics can be categorized into economic and non-economic factors. Immigration and the movement of refugees into Europe played a role. While xenophobia, racism, Islamophobia and other kinds of discrimination play roles in the rise and popularity of right-wing politics in various countries, there are economic factors at play as well. This article focuses on the economic factors that are contributing to the rise and popularity of right-wing politics.
Many Western countries have followed a policy of neoliberalism for the last few decades. A combination of privatization, deregulation including financial deregulation, free trade and globalization characterize neoliberalism. Neoliberalism has been a boon for global economic growth; both developed and developing countries have benefited from neoliberalism in terms of high economic growth.
Globalization and outsourcing have allowed countries like China to rapidly develop while developed countries have benefited from cheaper goods and services produced in low-wage countries. At the same time, technological improvement has allowed to automate manufacturing processes, lowering manufacturing costs by using fewer number of workers. Automation has benefited companies as fewer number of workers mean lower costs and, consequently, higher profits and efficient production processes.
Therefore, outsourcing, globalization and automation led to higher economic growth in both developed and developing countries, benefited companies producing in low-wage countries in terms of lower production costs and higher profits, and consumers in developed countries by having access to cheaper goods and services made in low-wage countries.
However, the benefits of globalization, outsourcing and automation came at a high cost. Companies in developed countries moved their production processes to low-wage countries or outsourced parts of their production processes to low-wage countries. Workers in developed countries who were employed in these manufacturing and service industries have become unemployed with neoliberal policies adopted by the developed countries. Combined with automation, it has been putting significant pressure on the employment situation of the working class and middle-class in developed countries.
Globalization, outsourcing and automation have led to dissipation of the manufacturing sector in developed countries that employed the working class in these countries. This led to increased unemployment among the working class and a shrinking middle class. While manufacturing flourished in low-wage countries, developed countries started to experience industrial rust belts which led to unemployment of factory workers.
With increased globalization, outsourcing and automation, the adverse effects on the working class and middle-class have only increased over time. However, the unemployed did not find alternative employment which forced them to fall into difficult financial circumstances or even poverty. At the same time, the beneficiaries of globalization, outsourcing and automation included the multi-national companies and large corporations. The people who have benefited from this continuous change have become incredibly wealthy while the working class and middle class have suffered financially. This has led to higher income inequality among the population of developed countries.
The suffering of the working class and middle-class have led to rise of angst and anger among this segment of the population, which is a majority in many developed countries. They are disillusioned with globalization and free trade, and the way it has wreaked havoc to their livelihood. Also, the social programs in the developed countries have been inadequate to help these disenfranchised people.
This led to these people rallying against the establishment in these countries contributing to the rise of anti-establishment popularity among the masses and support of right-wing politics, including far-right politics, in these countries. The disillusionment and resentment with neoliberalism, globalization and insufficient social programs have contributed to Brexit in the UK, Donald Trump being elected in the US and the rise of right-wing parties in France, Germany, etc.
Globalization, outsourcing and automation have taken a toll on the working class and middle-class of developed countries. The governments of these countries can introduce social programs that will help the adversely affected population. Health care is a considerable cost to people, especially the working class and middle-class segments of the population. Sometimes, health care costs can push someone into poverty. The introduction of more affordable health care or universal health care could help the low-income and middle-income people in having access to health care services.
Also, while some of the unemployed workers found alternative employment, others have fallen into financial difficulty or poverty. In order to help them have a decent living that will contribute to social stability, guaranteed minimum income may be introduced. Guaranteed minimum income ensures that all citizens have a minimum income that they can live on. The introduction of guaranteed minimum income will allow the adversely affected segments of the population to have a decent living. This will alleviate their suffering and lead to social stability and harmony.
The introduction of affordable post-secondary education will help the low income and middle-class to access post-secondary education for themselves and their children. Rising costs of tuition particularly at the post-secondary level have made it increasingly difficult for the low-income and middle-class to afford post-secondary education.
Also, increased access and affordability to trade schools and retraining opportunities will help the unwitting victims of global economic and technological changes as well as the low-income and middle-class. This will improve the standard of living of the low-income and middle-class of the developed countries as well as stem the rising income inequality that plagues these countries.
The income tax system can be made more progressive so that it taxes high-income earners more to finance social programs targeting the low-income and middle-class sections of the society. This will reduce income inequality while helping the low-income and middle-class. Also, changes can be made in the corporate tax system so that it benefits domestic producers and companies that choose not to offshore production in low-wage countries.
The introduction of subsidies and lower corporate taxes can encourage companies to produce domestically and even reshore, which is bringing back jobs to their home countries. This may improve employment in some types of manufacturing and service sectors in the developed countries.
Again, incentives in terms of lower tax rates can be offered to corporations to bring their overseas profits to their home countries. When they bring back overseas profits and invest in domestic economies of the developed countries, it will boost their respective economies and employment scenarios.
A combination of these economic and public policies accompanied by social policies like increased awareness among the population of the benefits of immigration will definitely reduce the anger and disillusionment among the adversely affected sections of the population in developed countries. Policies that benefit all sections of the population so that they enjoy the benefits of globalization, outsourcing and automation will reap rich rewards in terms of higher economic, social and political stability and harmony. This will make right-wing politics less appealing to the population of developed countries.
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