Europe's Fiery Crossroads

From the smoke-choked boulevards of Paris to the surge of Germany's AfD far-right, Europe feels like it's teetering on the edge of a mosh pit meltdown.

But hold the requiem. Amid the fury and the fear-mongering, a study from Slovenia drops a fact: Neoliberalism and globalization are not democracy’s assassins. As a matter of fact, over time, they boost the freedom we all seek.

As Europe grapples with its fiery crossroads, this is a call to stop burning it all down. In the hidden power of free markets and bold reforms, we might just find the common ground to reunite a divided stage.

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As France erupts in chaos with "Block Everything" protests paralyzing highways and clashing with riot police, the nation's political fragility is laid bare. Days ago, parliament ousted Prime Minister François Bayrou in a bruising confidence vote, thrusting Sébastien Lecornu into the hot seat as the new leader amid budget battles and austerity fury.

Demonstrators in Paris, Nantes, and beyond are voicing raw anger over rising costs, job insecurity, and a government they see as out of touch—squeezed by the uneven hand of globalization and neoliberal priorities that favor markets over everyday lives. We hear you, France: These streets echo the desperation of workers and families feeling left behind, their protests a cry against a system that promises prosperity but delivers division.

Meanwhile in Germany, the far-right Alternative for Germany (AfD) is surging to unprecedented heights, topping national polls at 26% as of August and leading state surveys in Saxen-Anhalt with a staggering 39%—just a year before key elections. Bavarian Premier Markus Söder's warning rings true: This rise exploits cultural anxieties, migration fears, and economic discontent to push isolationism and authoritarian edges.

These movements—from France's National Rally to Germany's AfD—aren't the cure to Europe's woes. They're symptoms of deeper malaise: a neoliberal and globalized continent veering off course with statism, protectionism, and unaddressed inequalities. Yet, amid the smoke and the polls, data reveals a counterintuitive truth. Neoliberalism and globalization aren't eroding democracy—they're quietly fortifying it over time.

A fresh study from Slovenia, published in the American Journal of Economics and Sociology by Stefani Branilović and Tibor Rutar, crunches numbers from over 140 countries across 1980 to 2022—the era of the Berlin Wall's fall, the euro's birth, and Brexit's unraveling.

Their findings may not ring true to far-right politics: Rising neoliberal policies and global ties correlate with stronger democracy scores over the long term. For Europeans reeling from today's protests and populist surges, it reframes the chaos in our backyard not as the death knell of openness, but as a bumpy road toward resilient freedom.

Neoliberalism isn't mere "greedy capitalism"; it's a deliberate shift: shrinking the government's economic footprint through deregulation, privatization, tax cuts, and free trade. Recall Thatcher's sale of British Telecom or the 1992 Maastricht Treaty birthing the euro and deeper EU ties. At its core, neoliberalism is about ironclad property rights, minimal red tape, and borders open to talent, goods, and capital.

Globalization, meanwhile, is the web connecting us all—economically (trade and finance), politically (international organisations like the UN or EU), and socially (cultures flowing freely by way of migration, like the Schengen Area letting you hop from Paris to Berlin without a passport.)

The conventional wisdom is that  these forces breed discontent. That neoliberal cuts to welfare spark inequality, and that globalization brings job outsourcing, causing cultural clashes, and fueling anti-EU populism in places like France's National Rally or Germany's AfD.

Losers in the global race—rust-belt workers in the UK's Midlands or Italy's industrial north—turn to authoritarians promising protectionism, like Hungary's Orbán’s rewriting constitutions to consolidate power, Poland's PiS party clashing with EU courts over judicial independence, and stable democracies like Sweden grappling with rising far-right support amid migration debates.

But Branilović and Rutar's study throws a wrench in that tale. Using data from V-Dem, Polity IV, and Freedom House—gold-standard democracy metrics—they find no evidence that neoliberalism or globalization are culprits.

The KOF (Konjunkturforschungsstelle, which is German for business cycle research institute) Globalization Index from Switzerland's ETH Zurich underscores this, with rising democracy scores for each dimension: economic, political, and social democracy. While far-right populists raise fear-mongering and aggression, science proves them wrong. Democracy scores and ratings in a neoliberal and globalized world have been rising over decades.

Imagine democracy as a sturdy oak tree, with roots in elections, civil liberties, and rule of law. The authors tested if neoliberal "fertilizer" and global "sunlight" help it grow or poison the soil. Their method? Fixed-effects regressions on panel data—fancy stats-speak for tracking changes within countries over time, stripping out fixed traits like geography or culture.

This isolates how shifts in the Economic Freedom of the World Index (EFW) and Switzerland’s Globalization Index (KOF) affect democracy, controlling for confounders like population density or urbanization.

Their key findings are that from 1980-2022, a one-point bump in EFW, from deregulating labor markets, for example, correlates with a 0.2-0.4 point rise in democracy scores across five measures—liberal democracy (V-Dem's holistic index), electoral democracy (focusing on fair votes), Polity (autocracy-to-democracy scale), and Freedom House's civil liberties and political rights. The same is true for the KOF Globalization Index: More globalization means more democratic integrity.

Secure courts, no military meddling, light-touch rules without cronyism  and freedom of international trade, global cultural exchange and info flows lead the charge for democracy. Victor Orbán’s tightened grip and Brexit overboil, on the other hand, show no link to democratic prosperity at all.

Europe's post-WWII Marshall Plan era blended neoliberal openness with social safety nets. The “Wirtschaftswunder” was the result of these stable democracies. Trade freedom integrated economies, tying France and Germany together like brothers, reducing any incentives for war.

This European social globalization acted like cultural osmosis. Migration and info flows exposed people to diverse views, eroding past authoritarian mindsets. The fall of the Iron Curtain integrated Eastern societies, and while these rapid changes bred cultural backlash in the short-term, in the long run these societies adapted. The EU's neoliberal core from the past has fortified democracy in new members like Romania, where economic freedom scores jumped post-2007 accession.

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In recent years, however, Europeans have romanticized the welfare state while demonizing Anglo-Saxon neoliberalism, creating yet another level of social injustice. Neoliberal Europe is going off-track with statism and protectionism. The uproar shaking Emanuel Macron’s France is the result.

Neoliberalism and globalization aren't flawless elixirs—they're tools, sharp or blunt, depending on the wielder. Over decades, they can elevate democracy, but balance is crucial. Unchecked neoliberalism breeds inequality bubbles, while globalization without integration fuels autocratic backlash.

The data shows that it’s a hybrid between complete market freedom and protectionism that works best. Take Switzerland, for example. Their high economic freedom pairs with strong social nets, yielding top democracy scores. Over-reliance on global supply chains, however, exposes Switzerland’s vulnerabilities.

China’s inclusion in Swiss trade networks invites not only Chinese products, but also Chinese authoritarianism into the free world. In the long run, however, neoliberal force has the power to democratize authoritarianism and dictatorships, just look at the examples of Spain and Portugal.

For Europe—reeling from Paris barricades to Berlin ballots—it's time to refine the EU project: strengthen social safety nets, slash bureaucracy. As Thatcher noted, "The trouble with socialism is you eventually run out of other people's money." France faces this reality today.

Demonizing neoliberalism and global markets in reaction to Macron’s protectionism misses the mark. Balanced neoliberalism and globalization quietly fortify the freedoms we cherish, from the far left to the far right. In that universal yearning for freedom, we may find common ground to reunite.

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