The recent victory of the leftist party Syriza in Greece reveals the increasing influence of populist, antimarket, anticapitalist movements throughout Europe. The new Greek Prime minister, Mr Alexis Tsipras, declares himself on the Left but his discourse is not different from the far right-wingers who go under the name of National Front in France, Progress Party in Denmark, Liberty Party in the Netherlands. The independence factions in Catalonia, the Basque country, and Scotland try to overcome the distinction between right and left but they are clearly populist when they try to appeal to jingoistic passions against rationality and they all tend to be statist and anticapitalist.
Beyond the local nuances, populism and anticapitalism are very similar and everywhere on the rise. Too often, the economic platforms of these populist movements are overlooked: in the case of the French National Front for example, one of the oldest and strongest populist party in Europe, its anti-immigration stance is well known as it is for Pegida in Germany or the Dutch Liberty Party.
Beyond their xenophobic stance however, their economic programs are hostile to the free market and pro State not unlike the Fascist parties in the 1930s. The comparison with the Thirties should not be streched too far while the current circumstances are somewhat different: unemployment all over Europe is high but not to be compared with the great Depression. The current populist parties are nationalistic but not militaristic: a huge distinction, thanks to the unification of Europe. The new Greek Finance minister dubs the requirement to reimburse the national debt as “fiscal waterboarding”, but he will not start a war against Germany or the European central bank. Such absurd postures may remind us that the ancient Greeks “invented” democracy and nurtured demagoguery as well.
This new European populism may not lead to war but it is certainly destructive for civil society and our economic future. We can already predict that the new Greek Syriza government will lead nowhere, which will raise frustrations and possibly violence: Greece has a long tradition of strikes and civil war. Podemos in Spain and the Catalonia independence movement could also awaken ancient demons close to the not totally extinct Basque terrorism.
How should we react, from a liberal and pro market perspective in order to contain and crush populism? The rational democratic parties need to offer “alternative utopias” (Hayek’s words), a counter narrative to populism with more attractive, imaginative and workable solutions. Leading free market economists and Think Tanks in Europe and in the United States, for half a century at least, have proposed actual solutions to cope with actual problems, like a better education for all, access to private property, a more dynamic economy, sustainable healthcare for all, full employment, workable immigration rules among other issues.
Governments, since Margaret Thatcher and Ronald Reagan, have been remarkably shy in using this liberal toolbox, mostly sticking to old boring and hardly efficient government interventions. The rise of populism should be a wake up call: old ways do not work and do not seduce the people anymore. Let us then apply to politics what Schumpeter called “creative destruction” in the economic field. Schumpeter rightly assigned any economic progress to innovations: they destroy the old way of doing things and lead to new more productive outcome. The rhythm of creative destruction has recently accelerated under the influence of scientific, technological breakthroughs and globalization. Political leaders however behave as if the process did not apply to politics. They are wrong. The time is ripe to open the liberal toolbox and use it. This will shift the debate and the narrative from the populist actors to responsible political leaders. If these leaders are not up to the task, maybe they should give way to a new generation of more creative political entrepreneurs.