The future is free market populism
Javier Milei, Pierre Poilievre and, of course, Donald Trump are at the vanguard of a new movement for free-market populism gaining support across the world, says Fred de Fossard
The inauguration of President Trump for his second term is the latest development in the trend of a new type of free-market populism gathering momentum across the Western world.
At the vanguard is Javier Milei of Argentina, swinging his chainsaw into the Argentine state and restoring his country’s public finances to sanity after decades of vandalism. In Canada, the likely next prime minister, Pierre Poilievre is advancing an agenda of cutting immigration, building houses for young Canadians and scrapping green policies like carbon taxes.
Trump tempers his support for tariffs with radical economic deregulation, tax cuts, exploitation of natural gas and even building new cities on government-owned land. If this is indeed populism it is a new type, combining immigration control and free-market economic policies, different to the economics of its 20th century predecessors.
Javier Milei describes himself as an “economist” in his biography on X, yet his approach combines Hayekian economics with a populist touch. Milei appealed directly and deliberately to Argentina’s working class, for generations the core supporters of Peronist statism. He campaigned in some of the country’s most deprived slums, unheard of for any Argentine politician advancing free-market policies. He has taken a radical approach to public spending to bring inflation and the public finances under control, and has done so in one year in office. While the path ahead will not be easy – living standards for Argentinians must improve – he has hit on a rich seam of public support for a patriotic, free-market agenda.
Poilievre leads the polls
While Canada doesn’t go to the polls until later this year, Poilievre has enjoyed a hegemonic poll lead for quite some time. His own reforms might come at just the right time, as pollster Guy Miscampbell wrote recently, but that should not discount the fact that his brand of economic deregulation combined with border control appeals directly and emotively to a Canadian middle class angry that their living standards have stagnated, following a combination of low housebuilding, huge rises in immigration and an economy suffocated by regulation. British readers may relate.
This type of populist deregulation has not made its way to British shores. After the brief possibility of it doing so in 2019 faded away, British economic policy settled into an unsatisfactory consensus. Regulation – of all types – increased. Our political class settled on a collection of dirigiste policies including net zero, bans on the combustion engine, expensive second staircases mandated in blocks of flats, tech regulation and even a regulator for football. The British social contract frayed: immigration skyrocketed, the working population paid for a growing proportion of economically inactive people and rising public debt has seen public services receiving less money despite rising taxes.
The middle-class lifestyle the baby-boomers took for granted is becoming unaffordable to many, and neither of the major parties seem motivated or able to change it. Indeed, they implemented the rules and regulations – on everything from childcare and housing to cars and taxation – which have helped price working Britons out of the lifestyle that their parents enjoyed. It makes one wonder who our political parties think the British government is meant to serve.
Could free-market populism come to Britain? There are flickers of its emergence, a policy agenda for the furious small business owner: deregulation, low tax, reining in quangos, big cuts to immigration. There is a desperate need for a radical agenda to repeal the bureaucratic and constitutional strictures which have stifled Britain’s economy and society in the 21st Century, but overall the political class is wedded to the established way of doing things.
The government is asking regulators for ideas on deregulation, instead of reforming or abolishing the regulators themselves. It is trying to tax the British people to prosperity, hoping the economy will grow while it targets businesses with hikes to National Insurance and imposes inheritance tax on family-owned businesses. The government has launched a “plan” for artificial intelligence without any indication of how it will provide the huge amounts of energy required to make it a reality.
The government is trying to tax the British people to prosperity
We are hitting the end of the road for bureaucratic fiddling. A much more democratic alternative is required, which channels Milei’s call of “Afuera!”, Poilievre’s support for the wealth-creating middle-classes and Trump’s willingness to override the received wisdom and calcified Establishment thinking. In this respect populism is as much a practice of politics as it is a policy agenda.
Margaret Thatcher was once dismissed as a Poujadist for the way she harnessed the anger of the British middle classes in the 1970s and 80s around a platform of economic reform. Today, a similar popular movement is required to revive British prosperity. In this spirit, this week we have renamed the Legatum Institute the Prosperity Institute, affirming our mission and ambition. The world is changing fast, and the British political class has not realised it. We must ensure Britain does not miss this wave.
Fred de Fossard is director of strategy at the Prosperity Institute