Different Directions

New enemies of the open society are emerging regularly in the developed world.

Recently, two main symbols of the free market, the UK and the US, have seen the respective rise of nationalism and protectionism that strike against the western model for prosperity. The threats of Brexit and Donald Trump's presidency herald a disappointing era.

Many other industrial countries are also witnessing a backlash against the norms of the open society. One of the reasons could be the belated recovery from the recession of 2008.

However, the rise of nationalism goes beyond economic causes. The self-styled Islamic State and other extremist groups are challenging western domination with terrorist attacks last seen in Berlin, for example.   

While immigrants know many have lost their lives while making the treacherous journey, they continue to struggle to enter western countries.

It is not easy to assimilate a foreigner with a job that even natives are finding it difficult to get. Such issues have triggered national sentiments in the West.

People who believe in open societies with competitive markets, distribution of political power and the rule of law cannot convince discontent nations that the road to prosperity lies elsewhere.

The point is western citizens need to see the change coming and holding on to old ideas, even efficient ones, is no longer defensible. They feel their society requires a savior who could ensure the best—a simple solution in a very complicated world!  

No one but a populist would assert that he can find the best way and be the savior spouting national slogans.

Some countries with closed economies have gone in the opposite direction. Cuba, for instance, adhered to socialist principles for more than half a century. Its closed economy organized by the government gave little credence to individuals and their contributions.

Nevertheless, the Caribbean island started a process to change the situation since Raul Castro took office. Cubans are now allowed to have their small businesses. They are eager to open their borders, to communicate with other nations, to learn English and use new technologies, which parameters were absent in Fidel’s era.

At present, the Iranian government is making efforts to reconnect the country’s economy to the world market. Many industries seek foreign investment and technologies to expand. Legal processes have been launched to guarantee property rights for investors and assure them that they can repatriate profits.

The private sector is piling huge pressure on the government to review its interventionist policies and the government acknowledges that economic boom would be attained through competitive markets and foreign enthusiasm to do business with Iran.

To sum up, the global picture is not pessimistic. Western voters will see the consequence of their choice, sooner or later. So the new trend toward protectionism will not last in the long run, as western populists face many institutional obstacles to simply dictate their will.

At the other end of the scale, developing countries have upped the ante by embracing free markets to enhance individual incentives and embrace prosperity.