The stark rise in poverty across the United States is not just an American problem; it serves as a potent warning for the United Kingdom and continental Europe. This troubling trend is the direct outcome of a specific, hardline form of capitalism that influential right-wing factions on this side of the Atlantic are increasingly advocating for.
The Allure of the American Model for the European Right
Figures such as Nigel Farage of Reform UK and senior Conservative Kemi Badenoch frequently praise the US economic system. They promote its ethos of minimal government intervention, lower taxes, and deregulated markets. However, this admiration often glosses over the human cost. The American model has a documented history of casting millions of citizens aside, resulting in crises that are less prevalent in European nations with stronger social safety nets.
As commentator Phillip Inman notes, you would not see an opioid epidemic, or mental health and obesity crises on the same devastating scale as in the US, even after years of European austerity. The fundamental difference lies in the level of state involvement and protection.
Exporting Instability: Financial Crashes and Social Neglect
The repercussions of this laissez-faire approach extend beyond domestic poverty. The US has a track record of exporting its financial crashes globally, with the 2008 crisis being a prime example. While the US itself can absorb the blow, other nations are left with a disproportionate repair bill. The lesson from history, notably since the 1929 crash, is that it is often reckless US policy, not careful European stewardship, that triggers international financial chaos.
Proponents of the US-style system argue it's a path to faster growth, pointing to Europe's more measured economic pace. Yet, this slower growth is often by design—a feature of economies that attempt to build resilience, guard against disaster, and offer support when needed. Regulation that prevents financial meltdowns may slow the adoption of risky new products, but it pays dividends in stability.
A Continental Divide in Economic Philosophy
The debate is crystallising across Europe. In contrast to the Farage-Badenoch viewpoint, figures like former Italian Prime Minister and ECB head Mario Draghi have presented comprehensive plans to address Europe's growth challenges. Draghi's solutions, though not socialist, are fundamentally social, aiming to fund a robust state capable of supporting its citizens.
Meanwhile, parties like Germany's AfD, France's National Rally, and Italy's Brothers of Italy, led by Giorgia Meloni, subscribe to a philosophy closer to the US Republican vision. This ideology champions freed financial markets, tolerates monopolies in the name of investment, and places the onus of poverty and poor health on the individual, warranting only rudimentary state aid.
In the UK, studies suggest this message resonates strongly with an older demographic, the baby boomers, who are voting with frustration. The only state institution they widely deem sacred is the NHS, with other aspects of the social contract seen as negotiable to keep taxes low.
The fundamental choice is becoming clear: pursue a model of capitalism that generates vast wealth for some while abandoning the vulnerable, or build an economy that grows sustainably and protects its people from the worst excesses of the market. The rising poverty levels in America are a live demonstration of the former's endpoint, a path some in British and European politics are dangerously keen to follow.
