Discuss the complexities that lay ahead for business, government and civil society in the context of the past and the future. Essay Example

COMPLEXITIES THAT LAY AHEAD FOR BUSINESS, GOVERNMENT AND CIVIL SOCIETY

COMPLEXITIES THAT LAY AHEAD FOR BUSINESS, GOVERNMENT AND CIVIL SOCIETY

Introduction

The past Global Financial Crisis, which affected the whole world, is still a topic of debate currently. Many countries like Egypt and Venezuela are still far from recovering after the economic turmoil created by the financial crisis across the world. Many sectors of the world economy continue to post dismal results. Some of the sectors that were hit hardest by the Global Financial Crisis include the aviation and the oil industries. Airlines across the world continue to report losses up to today (Pirro & Van Kessel, 2017, 1). There is a very slow rate of recovery from the impact of the global financial crisis. This slow rate of recovery is now proving to be a major worry for governments, the civil societies and businesses considering the past developments in various parts of the world (Pirro & Van Kessel, 2017, 1). The most sensitive issues are social polarization and possible resurgence of populism in the near future if this weak economic recovery from the effects of global financial crisis is going to persist. Many scholars have observed that weak economic recovery is likely to arouse a strong sense of social polarization among the common people and cause resurgence of populism in the coming decades. It is vital to note that social polarization and populism thrive in conditions of crisis like economic problems (Pirro & Van Kessel, 2017, 2). Moreover, it has been observed that populism is a concept, which has significantly been experiencing transformation in the past. The Peruvian case, which is substantially considered in this paper, offers lessons on the way businesses, governments and civil society groups look into a future full of grave complexities given the continued slow and weak recovery from the adverse impact of the global financial crisis. This paper agrees with the view that businesses, governments and civil society groups are likely to experience complexities of social polarization and a transformed form of populism arising from persistence of the current weak economic recovery following the global financial crisis.

Main Body

Populism is a concept that involves the appeal to the masses on the ground. Populism is a case where the masses dictate what they want done by the government, businesses or other institutions like the civil society groups. In the presence of populism, it implies all the institutions charged with the responsibility of mediating the masses and the service providers fail (Roberts, 1995, pp.83). Such a situation is characterized by the total failure of important institutions like the political parties, civil society groups, labor unions and the independent social organizations that are meant to be the representatives of the people. This failure occasions a case where there is direct personalist mobilization of the masses leading to populism (Weyland, 1996, pp.7). It is vital to note the fact that populism is simply a bad situation where even the political institutions grow weak.

The Peruvian Case has taught the world that populism always emerges and thrives when there is a crisis, such as the current weak economic recovery following the adverse impact of the global financial crisis. When the masses are subjected to continued pain from a crisis, they are forced to wake up and demand for what they want. Such a case is not what countries may admire and it is the reason governments, businesses and civil society groups must be concerned with the complexities that lay ahead of them in the future if this weak economic recovery is going to persist. Populism strongly emerges in cases where a crisis creates social polarization (Weyland, 2001, pp.7). It happens when the existing institutional bodies appear to have lost capacity to shape the political behavior and identities of the popular sectors. These popular sectors decide to put power in hands of powerful men because of the need for action. The men and women who are given such power are those that promise the masses that they will sweep away the existing crisis and usher in a new social order if they ascend to power positions. It is the way populism comes into play.

There has been a rise of personalist leaders who enjoy massive support from the masses, but follow the neoliberal principles of economic austerity as well as structural adjustments, which are market-oriented. This phenomenon is paradoxical since the two concepts of neoliberalism and populism, cannot be applied together. Populism is associated with statist and redistributive economic policies, which are not applicable in the case of neoliberalism (Knight, 1998, pp.228). However, some scholars continue to opine that the modern type of populism is a transformative and recurring concept. The kind of populism that has been witnessed in Peru in the past, is linked to the backlash by the masses against the economic austerity, inequalities and the insecurities in the market caused by neoliberalism.

It is vital to observe the fact that many policy-makers have always sought to strike a neoliberalist tone by promising to resist populism and implement the economic stabilization plans approved by the IMF. Importantly, populist policies are normally politically expedient, but fiscally irresponsible. This scenario always presents a dilemma to the businesses, governments and the civil society groups seeking to cure the social costs of the free market reforms. This paper asserts that it is highly possible to have the populist tendencies emerging in the neoliberal dispensation because of the need to strike a balance between the fiscal responsibility and political expediency.

The case of the Fujimori regime in Peru proves that there is a new form of populism, which is compatible with and, in fact, complementary to the neoliberal reforms. It is this new and more liberal aspect of populism that emerges as a result of the breakdown of the institutional bodies charged with the responsibility of political representation. This breakdown usually occurs in periods of the social as well as the economic upheavals like the current slow and weak economic recovery following the global financial crisis. This paper suggests that it is this new variant of populism that businesses, governments and the civil society groups risk to face in the near future is the effects of the global financial crisis are not solved fast. It is vital to know that populism has proved its ability to adapt to the neoliberal era as seen in the case of Peru under Fujimori regime (Roberts & Arce, 1998, pp.221). Populism cannot be constrained by the effects of fiscal austerity and market reforms. Just like Fujimori regime in Peru, personalist leaders have realized new political and economic techniques of mobilizing the popular support of the masses, in situations where the intermediary institutions are in crisis.

Various theoretical perspectives have been advanced on this concept of populism. Its relationship with neoliberalism has also been theoretically analyzed by various scholars. For the Peruvian Case, there are four theoretical perspectives regarding populism that can be identified. There is the sociological and historical theory of populism. This particular theory normally lays emphasis on the multi-class socio-political coalitions. These coalitions normally arose in the course of the early phases of industrialization within Peru and the other Latin American nations. There is the economic theory of populism that lowers it to fiscal and redistributive policies, which are implemented in the face of mass consumption pressures. Moreover, there is the ideological theory of populism that links it to a discourse, which draws contradiction between the people and the elites who have power (De la Torre, 2010, pp.5). Finally, there is the political theory of populism that normally creates an equation between this concept and the top-down mobilization of the masses by the personalist leaders. This theory was evident during the Fujimori regime in Peru. In this case, the institutional bodies of mediation between the masses and the government are normally bypassed (Kay, 1996, pp.62). It is vital to note the fact that different perspectives of populism have their unique implications. The sociological theory of populism focuses on the richness and complexity of this concept.

Neoliberalism is the tendency of allowing free market forces to determine various elements in the economy. Neroliberalism does involve much of the government intervention to solve the crisis of people. Free market forces are given chance to take the economy back to equilibrium where the problems of the masses are solved. Under neoliberalism, fiscal austerity is prioritized. The negative impact of neoliberalism is that it may lead to an economic crisis, which then takes a lot of time before it is corrected. Since the economic problem does not affect people equally, neoliberalism ends up bringing about inequality among people. With the economic crisis that takes long before normal conditions are resumed and the resultant inequality, the masses get socially polarized and resort to populism (Roberts, 2006, pp.133).

Neoliberalism is the cause of the current weak and slow economic recovery following the global financial crisis. The global financial crisis made fiscal austerity measures to become a normal practice. This trend has made social and economic inequalities among people to grow large. What is expected is that with this growth in inequalities following the global financial crisis, integration of the elites and the common people will not be a possible endeavor. The common people, who are always the majority, will get socially polarized and choose any leader who appeals to them (Ellner, 2003, pp.147). People will start to campaign as independent candidates and win elections since they appeal to the masses. The only goal of the common population will be to install a personalist leader who will give them the promise of protecting them from the powerful elites. Political party formations will lose meaning and significance. This scenario is quite similar to the one witnessed in Peru in the past.

The global financial crisis had 3 identifiable dimensions. The first dimension was a competitiveness crisis. This crisis of competitiveness led to the slowdown of economic growth for many nations. Secondly, there was the banking crisis, which was occasioned by the under-capitalization of banks as well as their lack of liquidity. Sovereign debt crisis also affected countries during the global financial crisis. This specific crisis was highly pronounced in the nations that lacked the ability to finance their public by themselves as a result of rising bond yields. It is vital to note that the impact of this global financial crisis was not even in all nations across the world. There are those countries that had resilience and were not significantly affected by the global financial crisis. These nations include Canada, Switzerland and Norway. On the other hand, there are nations that were hit hardest by the past global financial crisis like Egypt, Venezuela, Portugal, Ireland and Greece (Conniff, Roberts, Basurto, Drake & Ellner, 2012, pp.11).

The reason businesses must fear about possible complexities like polarized masses and return of populism is that the past global financial crisis did not just affect the economy alone, but had political effects including the destabilization of the various government institutions. Therefore, businesses, governments and the civil society groups are likely to see a situation where personalist leaders will rise as the masses punish the current incumbents for a slow economic recovery even after the end of the global financial crisis. It is vital to underline the fact that most governments always take the blame wherever there is a crisis, be it natural or not. Even the personalist leaders tend to ride on the woes affecting the people to get their support during political campaigns (Barr, 2009, pp.37). In fact, the world is currently starting the see the signs of a resurgent populism. Many world leaders are concerned that the world may return to populism as people get impatient with the weak the slow rate of economic recovery following the global crisis. Leaders are aware that the world is likely to experience populism in the near future as evident in their utterances, where some of them have called for caution from the people. The former Italian Prime Minister is on record urging the electorates to avoid “a return to populism” (Pirro & Van Kessel, 2017, 3). The immediate former France President recently warned against the “populist excesses” (Pappas, 2014, pp.9). Moreover, the EU President Herman van Rompuy gave an alarming message about the coming “winds of populism”, which now threaten the whole world because of the slow economic recovery following the past global financial crisis (Fomina & Kucharczyk, 2016, pp.61).

The Peruvian Case offers real lessons on populism is able to reinvent itself and rise even in the presence of a neoliberal regime as long as personalist leaders are in power. This scenario takes place when there is a huge crisis in the economy. The Peruvian Case suggests that a strict neoliberal project implemented at macro-level can be compatible with the populist-style political leadership (Remmer, 1991, pp.779). Moreover, it can be compatible with the populist economic policies at the micro-level. It is this amalgam that will create complexities for governments, businesses and the civil society groups in the near future. This paper argues that in such a case, the populist political leadership and microeconomic policies will always have preponderance the neoliberal macroeconomic projects.

Peru has experienced personalist leaders who have campaigned on a populist platform, but switched to neoliberal economic measures after their election. Peru had neoliberal revolution and economic crisis, but all these developments did not diminish the force of populism in the country (Roberts, 1995, pp.86). There was a collapse of the party systems in the nation creating a great opportunity for the resurgence of populism. Alberto Fujimori is one leader in Peru whose political career was based on populism. His meteoric rise to political power in 1990 has made scholars to explain four characteristics of populism. From the Peruvian case of Alberto Fujimori, it has been established that populism thrives where there is personalistic leadership style, wide-spread low-class support base, social constituency that is heterogeneous and failure of the institutionalized bodies for political mediation such as the party systems (Roberts, 1995, pp.87). During his campaigns, Alberto Fujimori portrayed a ‘man of the people’ image to the voters in order to gain the populist support from the masses (Roberts, 1995, pp.88). He even proposed the end of neoliberal economic policies in order to solve the social problems of people. The world is experiencing all these signs as people start to create a populist revolution by electing leaders who are against the establishment. It can only be expected that with the current weak and slow recovery of the economy following the global financial crisis, the masses will be socially polarized and cause the resurgence of populism. Such populism will be negative for the businesses and the governments. Moreover, it will imply failure of the civil society groups.

The solution to such a situation is to have personalist leaders who use neoliberal policy makers to take care of the masses. Governments that ride into power because of populist tendencies should form cabinets that have only neoliberal ministers, who can push for sound economic policies behind the scenes. Moreover, there is need to focus a lot of energy on the expedition of the economic recovery process.

Complaints have been raised against such a solution with many people rooting for blocking populism completely. People from the corporate world continue to urge governments to avoid allowing populist leaders to ascend to power since it may erode the gains made in ensuring there is economic recovery following the global financial crisis.

However, this paper presents a rebuttal to this complaint arguing that populism cannot be avoided. Just like seen in the case of Peru where there was neoliberal revolution, populism has its way of remaining present. It is quite impossible to erase the inequalities that exist between the elites and the low-class people. Since they are the majority, they will always be socially polarized against the establishments in nations and exert populist political pressures as a way of getting their issues addressed. Therefore, governments have the only logical choice of controlling the winds of social polarization and populism.

With such measures implemented, it is logical to say that the prospects for success in the future are significantly high. However, if the current situation is not corrected effectively, then businesses, governments and the civil society groups face a bleak future with minimal prospects for success in avoiding the complexities of social polarization and populism.

Conclusion

Scholars have continued to war governments that they face a future where there might be social polarization and populism because of the current weak economic recovery from the adverse impact of the global financial crisis. It is true that the masses, largely made up of low-class people, are suffering as a result of the effects brought about by the global financial crisis. Neoliberal macroeconomic measures have failed to expedite the process of economic recovery. It is important to note the fact that neoliberal measures favor free market adjustments. Therefore, the neoliberal economic measures implemented by governments are those that only seek to facilitate the free market adjustments, which should bring the economy back to equilibrium following the global financial crisis. However, the process of free market adjustments normally takes a very long time before effective results are realized. It is because of such neoliberal policies that the economic recovery process has remained weak and slow. Its result has been huge inequalities between the low-class people and the powerful elites.

In such a situation, the grievances of the low-class people are going to build up and create social polarization against the establishments in nations. This development is what will cause a resurgence of populism in the near future. Many world leaders have sensed the clear signs of possible social polarization and populism and some have even utterly cautioned the masses against it.

This paper recommends a solution that controls the populist excesses by having personalist leaders who choose neoliberal policy makers. Moreover, there is need of strengthening the institutional bodies charged with the role of political mediation. These bodies must be functional so that there is no vacuum for populism to thrive.

References

Barr, R. R. (2009). Populists, outsiders and anti-establishment politics. Party Politics, 15(1), 29-48.

Conniff, M. L., Roberts, K., Basurto, J., Drake, P. W., & Ellner, S. (2012). Populism in Latin America. The University of Alabama Press.

De la Torre, C. (2010). Populist Seduction in Latin America. Ohio University Press.

Ellner, S. (2003). The contrasting variants of the populism of Hugo Chávez and Alberto Fujimori. Journal of Latin American Studies, 35(01), 139-162.

Fomina, J., & Kucharczyk, J. (2016). Populism and Protest in Poland. Journal of Democracy, 27(4), 58-68.

Kay, B. H. (1996). “Fujipopulism” and the liberal state in Peru, 1990–1995.Journal of Interamerican Studies and World Affairs, 38(4), 55-98.

Knight, A. (1998). Populism and neo-populism in Latin America, especially Mexico. Journal of Latin American Studies, 223-248.

Pappas, T. (2014). Populism and crisis politics in Greece. Springer.

Pirro, A. L., & Van Kessel, S. (2017). United in opposition? The populist radical right’s EU-pessimism in times of crisis. Journal of European Integration, 1-16.

Remmer, K. L. (1991). The political impact of economic crisis in Latin America in the 1980s. American Political Science Review, 85(03), 777-800.

Roberts, K. M. (1995). Neoliberalism and the transformation of populism in Latin America: the Peruvian case. World politics, 48(01), 82-116.

Roberts, K. M. (2006). Populism, political conflict, and grass-roots organization in Latin America. Comparative Politics, 127-148.

Roberts, K. M., & Arce, M. (1998). Neoliberalism and lower-class voting behavior in Peru. Comparative Political Studies, 31(2), 217-246.

Weyland, K. (1996). Neopopulism and neoliberalism in Latin America: Unexpected affinities. Studies in Comparative International Development,31(3), 3-31.

Weyland, K. (2001). Clarifying a contested concept: Populism in the study of Latin American politics. Comparative politics, 1-22.