What is it that unites figures as disparate and distinct as Habib Rizieq Shihab in Indonesia and Donald Trump in the United States? Despite being separated as far apart geographically and culturally, there is much in common about these two figures -- They proclaim the degeneracy of the current social order, and envision a return to a bygone conservative era, where the privilege of the majority was guaranteed in every aspect of political and economic life.
Both of the movements behind these two divisive figures are based on the same narrative, that there exists a minority few continuously seeking to undermine the position of the majority, and that traditional democratic systems have in fact only entrenched an establishment whose concerns are increasingly divorced from that of the average Joe. When looking at this blatant similarity, it is clear they are merely different strands of the same epidemic we call populism.
It is not commonly understood however that populism is merely a symptom of an underlying disorder, that is social unrest caused by decades of what is often inferred as neoliberalism. Neoliberalism essentially refers to the idea of economic logic pervading through all the fabrics of society, and overall preference for market solutions over public and collective ones.
In economic life, this has been largely manifested with broad-based economically liberal policies such as deregulation, tax cuts, austerity, trade liberalization and a plethora of other similarly principled policy measures. When analyzed through that lens it is clear that the root causes of populism are economic, while its symptoms, sociopolitical. Populism is thus best seen as an economic phenomenon, a counter-reaction against decades of aggressive market fundamentalism.
The precise impact of neoliberalism is apparent when looked at closely. In the United States, the dilapidated factories and abandoned mines of the Rust Belt are the most visceral evidence of a society hit hard by neoliberalism's march. These are the places where people are hardest hit by international trade agreements that are arranged only for the best benefits of multinational corporations. The losers in the era of globalization are often left to their own devices, never recompensed for their losses.
In hard, cold numbers, the pernicious effect that neoliberalism has inflicted on the middle class can be traced easily in terms of growing income inequality as the top 1% share of the national income rose almost threefold from 8.9% in the 1970s to 22.0% in the 2010s.
Adding to this is stagnant wage growth since the 70s, the wage has remained largely stagnant even when productivity has grown exponentially as much of the increased gains in productivity of the past few decades have not gone to those who deserve them the most. It is not surprising then that people feel angry and cheated, and that they turn easily to demagogues such as Trump that promises a new way out of their misery.
In Indonesia, the same symptoms are just as apparent. Decades of economic growth have only led to wealth and power becoming increasingly concentrated in the hands of a few while prosperity and wealth remain elusive to many.
Economic liberalization imposed since the Reformasi has led to the large-scale privatization of public services, the abolition of subsidies for many essential commodities, the removal of effective protection for rice and sugar cultivation, and enforced flexibility in the labor market.
Even more crucially, excessive liberalization has given the opportunity to Indonesia's oligarchs to focus only the commodity sector, which has contributed to the premature deindustrialization of the manufacturing sector, the sector most able to bring about equitable growth.
The reaction against neoliberalism, namely populism has not however mostly transpired into attacks on economic injustice. It has instead been hijacked by and large by those on the right, peddling racist and supremacist attitudes, blaming minorities and a collaborating political elite. What was purely an economic phenomenon gradually became a political one.
