Part I of this essay argued that the standard explanations for the rise of the Alternative für Deutschland (AfD) party, which won 44% of the vote in Saxony-Anhalt’s September 6, 2026, state election, mistake a systemic crisis for a local disturbance. The three strategies based on these explanations (isolating the far right, copying it, or letting it govern) have all failed. This part examines the crisis behind the firewall and what a democratic revival would require.
The Exhausted Settlement
Politics is a stage with ever more dramatic, personal, and kitschy spectacle, yet the fate of the theater is decided by deeper forces. The crisis extends well beyond particular institutions, subcultures, or groups. What has broken down is the postwar compromise that reconciled the market’s polarizing effects with democracy’s promise of equality.
Two 20th-century thinkers who witnessed interwar democracies collapse developed frameworks that integrate these questions into a single system. Both scholars wrote about the rise of fascism, but their frameworks also fit today’s illiberalism. Karl Polanyi saw fascism as an exit from a stalemate. Between the two world wars, the forces of market expansion and society’s self-defense paralyzed each other; the democratic market economy became ungovernable and, in the end, elites opted to back fascism. According to Antonio Gramsci, a crisis of authority sets in when an economic model is exhausted, along with the institutions that temporarily reconciled the needs of business with the interests of working people. The old order is dying, the new cannot yet be born, and in the meantime, morbid symptoms appear.
The exhaustion of a specific socioeconomic model is also the root cause of the far right’s rise today. Fordism, the system of industrial mass production and mass consumption, rested on a social bargain (wages tied to productivity, a welfare state, strong trade unions). This bargain sustained the liberal democratic institutions we now take for granted. What now looks like “the crisis of the German economy” is in fact the protracted crisis of this model. First, financialization and globalization shifted profits from production toward financial returns, then wages decoupled from productivity. The platform economy then intensified this shift, reshaping the public sphere and the distribution of economic and cultural value.
A Triple Devaluation
In an earlier essay for the Kettering Foundation, I described the outcome as a triple devaluation: the erosion of material security, cultural status, and political voice. Saxony-Anhalt displays all three.
German real wages have stagnated since the early 1990s, and wages of low-skilled workers have fallen. In 2024, full-time wages in the east were 17% below those in the west. As the economist Isabella Weber highlighted, 89% of AfD voters in Saxony-Anhalt fear they will be unable to pay their bills, and food prices have risen 34.7% since 2021, while wages have risen only 14.8%. Germany is not alone. The real income of the middle class of Hungary’s income distribution regained its 1980s level only in the late 2010s, and the real value of the average American wage has roughly stagnated since the 1980s. Both countries saw illiberal leaders take power.
Wherever the industrial crisis is concentrated, the far right is consistently stronger. The troubles of the eastern German states, northeastern Hungary, the American Midwest, and northern England are symptoms of one protracted crisis of the model. West Germany’s Ruhr region shows the same pattern. In Gelsenkirchen, held by the Social Democrats without interruption since 1949, the AfD became the strongest party last year, recording the state’s highest results in the old mining and steel towns.
It is important to remember that an economic shock is never merely economic. Saxony-Anhalt has lost a quarter of its population since reunification, and of 2.9 million people, 1.8 million will remain by 2040. The post-socialist transition in Eastern Europe, which began in 1989, brought about more than seven million excess deaths, and the American Rust Belt introduced us to the concept of deaths of despair. Long-term population decline is one of the strongest predictors of the AfD vote, just as Trump is overrepresented in the counties with above-average mortality. Those who stay feel, with some justification, that they have been consigned to the scrapheap of history.
Great economic transformations also intensify cultural tensions. Whoever loses their job also loses one of the foundations of their self-respect; along with industrial work, forms of knowledge, subcultures, and whole lifeworlds are devalued. In the competition for shrinking jobs and decaying public services, the immigrant is the easiest scapegoat. Research shows that even perceived competition for health care increases hostility to immigrants. In eastern Germany, too, anti-immigrant sentiment is a political product: the fewer the immigrants, the better things will be. Across the “new federal states” of the former East Germany, the share of foreigners and the AfD vote are inversely related.
Those whose economic and cultural capital has been devalued by this transformation cannot make their voices heard in politics either. East Germans hold 12% of national leadership positions, one seat on the boards of the 40 companies in the DAX stock index, and not a single generalship in the armed forces. Among AfD voters, 83% believe that East Germans are second-class citizens, and two-thirds of Christian Democratic and Social Democratic voters think so too. Citizens who conclude that democracy has stopped listening to them have little reason to defend it.
The Second Answer
Polanyi identified two systemic responses to the paralysis of democratic market economies. One was fascism. The other was a renewal of democracy’s social foundations: the New Deal in the United States and the reform coalitions of Scandinavia brought markets under democratic control, gave citizens security and a voice, and kept both regions democratic. At the same time, much of Europe fell to dictatorship. The specific programs of the 1930s were products of their time, and democrats across political traditions disagree about what should replace them. The underlying lesson is less partisan. Democratic institutions endure when citizens have material security, recognition, and a real say in the decisions that shape their lives.
A democratic revival therefore must reverse each of the three devaluations. Material security requires that prosperity be broadly shared again. This means stable jobs and functioning public services in the regions that lost their industries, whether governments pursue this through public investment, regional policy, or stronger bargaining power for employees. Recognition requires that the places and kinds of work devalued over the last four decades count again in national life. In Germany, a start would be a national elite that includes more than a token share of Easterners. Voice requires institutions that listen between elections: parties and unions with a real local presence, and forms of citizen participation with actual influence over budgets and priorities. This agenda takes longer than an electoral cycle, and better government communication is not a substitute for it.
The firewall is only useful if the parties behind it use the added time to pursue this agenda.
Gábor Scheiring, a 2025 CFK Global Fellow, is an assistant professor at Georgetown University in Qatar, where he researches democratic backsliding, economic inequality, and post-socialist transformations. He is a coauthor with Benedek Jávor of the forthcoming Stanford University Press book How Democracies Revive: Why Illiberalism Keeps Winning and What to Do About It and author of The Retreat of Liberal Democracy. Scheiring is also a former member of Parliament in Hungary.
Resilience & Resistance is a Charles F. Kettering Foundation blog series that features the insights of thought leaders and practitioners who are working to expand and support inclusive democracies around the globe. Direct any queries to globalteam@kettering.org.
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