The traditional conceptions of neoliberalism and populism are quite contradictory, making it difficult to imagine a scenario in which they could be successfully combined by a political leader. Neoliberalism is a market system that largely benefits the elite, the supposed enemy of the people according to populism. Populism describes rhetoric strategically used by politicians to generate support among a perceived majority by defining two groups; the people and the elite, in which many of the country’s problems could be traced back to the elite. Historically, although not in every case, the people could be defined as the working class who feel they do not have enough leverage, and the elite are the business-owners paying their salaries. A crafty politician utilizing populist rhetoric could exploit these feelings of dissatisfaction, increasing public support for their candidacy by assigning blame to the white-collar elites. Neoliberalism, on the other hand, does not share much in common with this traditional form of populism. In fact, it may seem antithetical. Neoliberalism describes the enactment of policies intending to reform a country by reducing state influence on the economy through deregulation or privatization, and usually favors globalism. In effect, this gives businesses, which some populist leaders might refer to as the elite, more freedom in decision-making. How could a populist leader both simultaneously be for “the people” yet at the same time advocate for economic liberalization, which gives “the elite” more influence? This is a great question, especially given that this exact seemingly contradictory political stance has been adopted by politicians in Latin America, like Alberto Fujimori, who enjoyed modest electoral success. Furthermore, what problems can this combination of neoliberalism and populism pose for a democracy?
The ability for politicians to use populist rhetoric while pursuing neoliberal policies may be owed to the fact that populism is a thin-veiled ideology. This is to say that populism does not actually have any specific policy preferences. There are many different types of populism, including both left- and right-wing, and even anti-establishment political stances. It is clear that populism has no affiliation with any particular party or group. It is defined by historical, economic, ideological, and political perspectives that are unique to a certain country, but is very flexible in its application. The question remains; how could a leader like Fujimori employ populist rhetoric and claim to be working for the people, while simultaneously enacting neoliberal market reform that would give more power to the elite? As Kenneth Roberts writes in “Neoliberalism and the Transformation of Populism in Latin America,” “Indeed, in the drive to create more ‘flexible’ labor markets, it has often harmed the working-class constituency of classical populism by lowering wages, reducing formal sector employment, and emasculating workers’ legal protections.” As it turns out, there are many reasons why Fujimori was successful. First, Fujimori campaigned on an anti-neoliberal platform. He inherited a country wrought with hyperinflation and internal conflict that had been caused by his predecessor, so the people of Peru were already wary of the political establishment. Previous populist experiments had not been successful, but Fujimori hoped to enjoy more success. It was only short after assuming the role of president that he began pursuing neoliberal policies that were arguably more aggressive than his competitors had been. Second, it was through his lack of affiliation and notoriety that he found electoral success. He was able to avoid alienating voters by distancing himself from established parties. A third explanation for Fujimori’s success was his Japanese heritage. Both a political and cultural outsider, Fujimori gained more support from a positive stereotype that portrayed Japanese people as successful and hard-working. Lastly, Fujimori used antielitism and anti-establishmentism, but more so in attacks on the political establishment rather than the private sector elites. All these qualities gave Fujimori the means necessary to assemble a winning voting bloc and rise to power.
Once obtaining office through democratic means, Fujimori, as previously mentioned, began enacting neoliberal market reform within his first month. The resulting effect was that while his reforms did stabilize the economy, it was not without significant social consequence. Labor unions shrunk by a third, over half the economy worked in the informal sector, and almost half of salaried private sector workers were on temporary contracts. His first year in office, he faced opposition from the legislator. To expedite his economic reforms, he shut down Congress, suspended the Constitution, and purged the judiciary, in what was known as “autogolpe.” He justified this coup as necessary to save Peru from the mess that his predecessor had left it in, and his popularity shot up. How was it possible for Fujimori to vigorously pursue neoliberal policies that he had denounced before being elected, going so far as to suspend democracy, and still end up with more support than he started with? The answer is that in populism, the individual leader is seen almost as a savior, and with enough careful wording and charisma he can convince the people to abandon their ideologies to align closer with the leader. Fujimori’s reforms did stabilize Peru’s economy, but at the cost of their democracy. Once Fujimori changed his tune about neoliberalism, he was able to adapt his populist strategy in a way that was very dangerous for democracy. It warrants further research to determine if the combination of neoliberal market reform and populism is always detrimental to democracy.
Roberts, K. M. (1995). Neoliberalism and the Transformation of Populism in Latin America: The Peruvian Case. World Politics, 48(1), 82–116.
Mudde, C. (2004). The Populist Zeitgeist. Government and Opposition, 39(4), 541–563. http://www.jstor.org/stable/44483088
Cameron, M.A. (1998). Self-Coups: Peru, Guatemala, and Russia. Journal of Democracy 9(1), 125-139. doi:10.1353/jod.1998.0003.