Redistributionism or Populism?

Revolution in Latin America has a long history of constant fight between making the pie bigger first and sharing the pie first. Some of Latin American countries have mantained the left wing policies with strong redistribution argument on their political agenda. This redistribution includes agendas of land property, production mode and even labour exploitation. Now these political agendas are in jeopardy before the change of global political atmosphere: now we are facing the world where the extreme right dominates, as we could observe from Brexit and Trump election.

I was virtually attending to World Economic Forum where Lagarde and other heads of world economies discussed Middle Class Crisis issue throughout the world. They put an agreement that the history is repeating that after 30’s we are facing again the extreme right global regime. Countries are becoming more nationalist, and the walls are building up physically and mentally dividing groups.

I could capture some words that exchanged at the World Economic Forum:

  1. We should distinguish wisely between redistribution and populism.
  2. Policy making should be aimed for fiscal and structural reforms for better redistribution.
  3. we should identify policies that improve the better being of people, in spite of the difficulties that we are obligated to show instant result when those polices take time to make an actual development.
  4. Populist polices emerge in favour of Middle Class but at last this Middle Class pay more ultimately. For example, Trump made calls to some major companies notifying them to move their factories back to United States’ territory, which affected to Mexican peso devaluation. This monetary devaluation became an economic dagger to some border states and others like Ohio, where the same Middle Class would pay for cheaper mexican products rather than paying for products made by American labour.
  5. Middle Class confronts anxiety due to new technology and newly changing environment. We need to get through these difficulties in order to get to the better being of all.

There still are some arguments that are in favour of populism in case of Latin America, and I do think that it is quite an edge to correctly distinguish between redistribution agenda with populism agenda in actual moment of policies implementation. But without doubts, redistribution is surely is an important economic agenda of this era where the inequality gap is enlarging every second. Now then, how could we distinguish redistributionsim and populism on the stage of policies implementation? Which mechanism should we introduce for the better evaluation of ongoing policies?

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