However, I think there's an argument that the existence of that backup, or at least its marketing, might of itself encourage people to make the institutions fail so they can profit from it.

That's a weak argument. If the institutions can collapse because a few powerful people can work against it, then the institution has already failed in the first place.

Trump and the general rise of Populism is not the cause of the fall of Western democracies, it is a consequence.