Nigel Farage Must Explore Beyond Trump’s Economic Model

The landscape of economic populism has diversified significantly. The term is primarily linked to the far-right, which has risen to prominence over the past decade by sharing anti-immigrant sentiments and skepticism towards climate initiatives. However, when examining social, foreign policy, and economic stances, today’s populist movements display little ideological consistency.

For instance, in Argentina, President Milei’s economic strategy resembles a form of extreme neoliberalism that emphasizes severe austerity measures, aggressive deregulation, tax reductions, and widespread privatizations. His version of libertarianism aligns more with Liz Truss than with Viktor Orban, who is Europe’s longstanding figure of illiberal governance and an ally of Milei.

Contrarily, Orbanomics has increased government influence over key sectors, utilizing state-owned enterprises across media, energy, and infrastructure. In Hungary, price controls on essential commodities like food and fuel have been implemented to ease living costs, a strategy often criticized by those who adhere to Milei’s brand of market fundamentalism.

In the middle of this spectrum are various hard-right political parties in Europe. Their economic policies are typically overshadowed by their focus on migration and cultural issues, making them difficult to categorize as dedicated advocates of market liberalism or conservative fiscal policies.

This was evident in the recent collapse of the Dutch coalition government, which fell apart after Geert Wilders, the far-right leader, exited over disagreements related to asylum policies. Despite being one of the most conservative coalitions in Dutch history, it largely reflected the rigid fiscal approach adopted by the previous centre-right leader, Mark Rutte, involving public spending cuts and reductions in foreign aid.

In Italy, Giorgia Meloni, arguably the most effective right-wing leader in Europe, has maintained a relatively moderate economic stance to appease bond markets while adeptly accessing substantial EU pandemic recovery funds to stabilize the economy. Meanwhile, Germany’s hard-right AfD is advocating for diminished EU funding to both Meloni and Orban while promoting reduced trade barriers across Europe and beyond.

The economic populism espoused by Donald Trump is notably eclectic. The former U.S. president merges enthusiasm for tax reductions with protective trade practices and regulatory controls, adopting a robust anti-merger stance while disregarding traditional deficit management. His administration has shown a peculiar interest in manufacturing sectors and cryptocurrencies, representing a chaotic yet compelling populist message.

This brings us to Reform UK, whose economic policies are resonating with the electorate and compelling Labour to reconsider its positions. Reform’s opposition to means-tested winter fuel payments for seniors likely influenced Labour’s recent reversal on the issue. Farage’s advocacy against the two-child benefit cap and support for the renationalization of Thames Water reflects a form of left-leaning economic populism, allowing Reform to position itself strategically against Labour while distinguishing itself from Conservative policies in child welfare.

However, recent statements from Reform indicate that its economic philosophy leans more towards Trump’s approach rather than leftist ideals. In recent weeks, their economic strategy appears to mimic Trump’s, most visibly in plans to establish a “bitcoin reserve,” create a “UK Doge,” and intensify criticism of the Bank of England, paralleling Trump’s regular critiques of the Federal Reserve.

During a Las Vegas event, Farage declared that Reform would be the first British political party to accept cryptocurrency donations, develop pro-crypto legislation, and establish a bitcoin reserve—a direct imitation of Trump’s proposals, whose practical value remains uncertain. Farage’s lack of clarity surrounding the purpose of holding cryptocurrencies raises questions about the benefits for British taxpayers.

Reform’s suggestion to create a Department of Government Efficiency echoes Trump’s initiatives and will be led by former Reform chairman Zia Yusuf, who returns to tackle waste in local government. The relationship between Yusuf and the party’s grassroots could be strained due to previous conflicts, and his approach mirrors the populist vs. plutocrat divide exemplified by figures like Elon Musk.

Reform has also renewed its calls for the Bank of England to stop implicit subsidies to the banking system. While I have previously supported the idea of tiering interest payments on reserves, Richard Tice’s recent criticisms of Bailey echo Trump’s anti-central bank rhetoric, lending a distinctive Trumpian tone to their narrative.

Aligning Reform’s economic agenda with Trump’s ideals may be ill-timed. A substantial portion of British voters perceives the connection with Trump negatively. Meanwhile, the disdain for Trump’s actions, including his history of personal gain from cryptocurrency schemes, influences public sentiment.

If Reform adopts Trump’s economic strategies, Labour may feel reassured, knowing that Trump’s domestic economic experiments are waning in popularity, which could lead to continuous policy reversals. Should this trend persist, Farage may have to reconsider his adherence to Trump’s economic playbook.