Professor Dani Rodrik, one of the foremost authorities on globalisation and populism, argues that both economic and cultural rifts between traditionalists and younger generations are giving rise to mounting populism. Older generations are increasingly alienated in the community as younger generations adopt values, such as secularism, personal autonomy, and diversity. Yet although the older generation represent a smaller portion of the population, they tend to be more politically active. Meanwhile, economic shocks, such as greater foreign import penetration, have supported the rise of nationalist politics such as Brexit and Donald Trump’s election victory. Together these forces are breeding populism.
Why does this matter? Many investors see populism as driven by economic forces, but there’s a large cultural component to it, too. This makes predicting the end of populism more difficult and suggests policy uncertainty could be with us much longer.
(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)
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