How Do Populists Win?
At first blush, a populist message of "us vs. them" might seem less effective than a message of "all of us together," given that elections are won with broad coalitions. But under conditions of widespread alienation and distrust, the political gamble of an exclusionary, anti-pluralist message can pay off big.
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A Grassroots Antidote to Populism
Across Western democracies, traditional parties are collapsing or assuming unrecognizable new forms, while populists have successfully exploited voter disaffection. But as French President Emmanuel Macron's La République En Marche ! shows, a grassroots progressivism that focuses on voters' real concerns is a viable alternative.
PARIS – The political parties that once dominated Western democracies have been shaken to the core. Many have suffered electoral debacles, not least in France, Italy, Greece, the United Kingdom, and elsewhere. Others have changed so radically that only their name remains the same. The Republican Party of US President Donald Trump has little in common with that of former President Ronald Reagan.
These developments are similar across the West. Leaders of the once-dominant parties oscillate between denial and despair, while populists siphon off their traditional supporters. Some refuse to see any legitimate reason for their defeat, dismissing their opponents’ supporters as “deplorables,” as Hillary Clinton did shortly before losing to Trump in 2016; others are too petrified by the populist surge to mount a counteroffensive.
But neither denial nor complacency will break the political impasse. Progressives must rebuild, and that starts with diagnosing the traditional parties’ shortcomings. Part of the problem is that traditional parties failed to recognize the real issues of the age. Still fighting on old ideological battlefields, they turned a blind eye to declining social mobility, mounting environmental crises, rising geographic inequality, tensions over multiculturalism, and other issues that actually matter to voters. Decades ago, they were the vanguard. Today, they are alone in the woods, wondering where everyone went.
The social sciences may hold an answer as to why the mainstream lost its way. The gap between their objective analysis of reality and government policies has become a chasm. In most Western countries, for example, economists have long known about the growing divide in terms of incomes and other indicators between some affluent cities – which benefit from globalization – and the rest of the country. Yet not until French President Emmanuel Macron’s administration did a national leader enact tax cuts on the basis of where one lives. As a result, 1% of France’s GDP is now being redistributed first to the poorest parts of the country.
Traditional parties could also learn something from listening to voters directly, rather than only through the filters of media and pollsters. Back in 2016, Macron’s movement, En Marche !, started with the largest door-to-door listening tour in France’s history. What voters told canvassers then became the foundation of Macron’s presidential campaign.
For example, more than a year before revelations of Harvey Weinstein’s alleged sexual predations, “La Grande Marche” had gathered innumerable testimonies from women about harassment, and Macron issued a pledge to fight the problem if elected. At the time, Macron’s stance made him the butt of opponents’ jokes; the laughter soon faded with the onset of the #MeToo era.
Still, an accurate understanding of society is not enough. Traditional parties also suffer from poor organization. They have long believed that modern politics should be organized around elections, with activists showing up periodically to hand out leaflets and cheer on the candidates. This was not cynicism, so much as a symptom of an approach that treats democracy as a marketplace comprising government providers and citizen consumers. In this view, seizing and holding power is a party’s sole raison d’être. It is little wonder that citizens and even party members feel ignored between elections.
Despite these weaknesses, established parties had a number of advantages that forestalled their collapse. In recent years, they have had a technological edge over less-established opponents, and they were the only political actors with organized constituencies that could mobilize people for elections, organize protests, and start petitions.
But this model is no longer sustainable. Citizens nowadays refuse to be mere consumers of public policies. With rising levels of education have come new demands for empowerment. Voters want to be treated as political actors in their own right, not as pawns in someone else’s game.
Moreover, governments themselves are no longer the sole providers of policies. This is one of the hard lessons we learned during two years working alongside Macron at the Élysée Palace. The leading policy challenges today – climate change, religious extremism, digital disruption, gender equality – do not admit of solutions only by national governments. Such challenges demand deep cultural changes, and, in most cases, action at the sub- and supra-national levels.
Finally, technology has lowered entry barriers to political participation, such that traditional parties can no longer count on an incumbent advantage and entrenched support networks. When you have mastered Google, Twitter, and Facebook, you don’t need a century-old party machine.
Political movements must be rebuilt accordingly. The focus should be on specific actions, not just elections. A party’s formal management structure should serve as the administrative “back office”; the front office should be staffed by the people on the ground. At La République En Marche !, we refer to these as local citizen projects. They can include anything from after-class reading courses and migrant integration programs to cooperative vegetable gardens and digital training sessions for senior citizens. In each case, the point is to offer solutions tailored to local problems, thereby strengthening communities. Such projects should now be regarded as essential complements to public policies.
In the future, a party’s ability to offer rewarding avenues for political and community engagement will be essential to its attractiveness. And by demonstrating progressivism in action on a daily basis, parties will have already laid the groundwork for success when election day arrives.
When voters refuse to hear what you have to say, shouting louder is not the answer. This is the hard lesson traditional parties learned. Only by demonstrating a commitment to improving lives, rather than simply winning elections, can you convince people to come to your side. Reconnecting with voters’ concerns thus goes hand-in-hand with adapting party organizations. For a winning alternative to populism, we need grassroots progressivism.
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Populism Is Rooted in Politics, not Economics
Some one billion people around the world are now being ruled by populists of one sort or another. That number will continue to grow if we continue to view populism as the result of economic rather than political dysfunction.
LONDON – Nearly 330 million Americans are governed by Donald Trump. Brazil, with 210 million people, has a newly-elected populist government. Nearly 170 million Europeans live under governments with at least one populist in the cabinet. Add the Philippines, with more than 100 million people, and Turkey, with nearly 80 million. All told, at least one billion people are now being ruled by populists of one sort or another.
The new populism is often blamed on a generation or more of stagnant median wages. In countries like the United States and the United Kingdom, the distribution of income has worsened, and the top 1% are reaping the lion’s share of gains from economic growth. The 2008 global financial crisis not only caused much pain; it also reinforced the conviction that Wall Street is Main Street’s enemy. No wonder politics has become confrontational.
If this story is right, the policy conclusion is simple: throw out the rascals who did the bankers’ bidding, tax the rich, and redistribute income more aggressively. Populism will then eventually fade away.
But, however politically appealing this standard account – call it the economic insecurity hypothesis – may be, it is a poor description of reality. It does not fit the facts in emerging markets, and it may not apply even to the US and the UK.
Shortly after the US presidential election in 2016, statistics guru Nate Silver noted that Hillary Clinton improved on Barack Obama’s 2012 performance in 48 of the country’s 50 best-educated counties. And Clinton lost ground relative to Obama – by an average of 11 percentage points – in 47 of the 50 least-educated counties. “Education, Not Income, Predicted Who Would Vote For Trump,” Silver concluded.
Since then, hundreds of regressions have been run attempting to sort out what kinds of people voted for Trump or for Brexit in the UK. The title of one influential recent paper summarizes the debate: “Status threat, not economic hardship, explains the 2016 presidential vote.” So does the title of another: “Vote Switching in the 2016 Election: How Racial and Immigration Attitudes, Not Economics, Explain Shifts in White Voting.”
And what about the UK? Research conducted at the London School of Economics, examining 380 local authorities, concluded that while education and demography are good predictors of who voted in June 2016 to leave the European Union, exposure to trade and the extent of budget cuts are not.
So, the “cultural backlash” hypothesis seems to be more compelling than the “economic insecurity” hypothesis. And this conclusion is not limited to the US and the UK. Pippa Norris and Ronald Inglehart, who study the performance of political parties in 31 European countries, conclude: “Overall, we find the most consistent evidence supporting the cultural backlash thesis.”
Now, one does not need sophisticated econometrics to notice that beyond the comfortable confines of North America and Western Europe, right-wing populism is affecting precisely those countries with unusually strong economic performance – the opposite of what the “economic insecurity” hypothesis would predict. Turkey’s economy has grown at an average annual rate of 6.9% since 2010. The Philippines has enjoyed 6.4% annual growth in the same period. No economic stagnation there.
Poland and Hungary are much richer economies, so one would expect lower growth rates there; still, their annual GDP has risen at decent 3.3% and 2.1% average rates, respectively, since 2010. Or consider the neighboring Czech Republic, where unemployment is only 2.3%, the lowest rate in the EU, and the economy grew 4.3% in 2017. The country has few immigrants and no refugee crisis to speak of. Nonetheless, populist parties attracted four of every ten voters in the most recent general election – a tenfold increase in two decades.
Beyond aggregate growth data, it is undeniable that most citizens in these countries live much better than they did a generation ago. In 1995, the average annual wage in Poland was $15,800; today it is $27,000. The increase in Hungary was similar.
Brazil is a different case: it experienced a mega-recession in 2015 and 2016, during the second term of Dilma Rousseff’s presidency. But earlier the country did have strongly redistributive policies, started by social democrat Fernando Henrique Cardoso and continued by Luiz Inácio Lula da Silva. According to The New York Times, Lula benefited “tens of millions of Brazilians” with “his administration’s social programs.” A decade ago, Obama called him “the most popular politician on Earth.”
The conclusion seems unavoidable: populists are the offspring of economic gain, not pain.
There is one final prickly fact to consider: if surging populism reflected a demand for redistribution, we would expect the surge to be on the left, not the right. Yes, Andrés Manuel López Obrador has just swept to power in México, Syriza still governs Greece, Podemos has grown influential in Spain, and Nicolás Maduro continues to wage war against his own people in Venezuela. But the striking fact is the success of right-wing populists, from Trump in the US to Viktor Orbán in Hungary, from Matteo Salvini in Italy to Jair Bolsonaro in Brazil, and from Jarosław Kaczyński in Poland to Rodrigo Duterte in the Philippines. And though their policies are likely to worsen, not improve, the distribution of income, voters are cheering them on.
None of this is to deny the intensity of economic grievances, whether in the north of England, the Midwestern US, the east of Turkey, or the favelas of Brazil. The point is that politics dictates how we process the experience of economic success and failure. A turn toward populism and authoritarianism suggests a failure of politics to manage grievances effectively.
Moreover, emphasizing economics alone can breed complacency: just sit on your hands and wait for the economy to recover. And attempting to counter populism and illiberalism around the world just by tweaking the income distribution could amount to yet another example of technocratic hubris. These are dangerous temptations that must be avoided.
Traditional political elites seem increasingly out of touch. Their arrogance – recall Clinton’s description of Trump voters as “a basket of deplorables” – has not helped. Perhaps voters detest the political establishment because it is corrupt (as in Brazil and Mexico), or because it obtains its power through murky campaign finance (as in the United States), or because it was in power too long, overstaying its welcome (as with social democrats in much of Europe and the Popular Party in Spain). The details vary, but the message is clear: traditional political elites’ many mistakes make them ideal fodder for anti-establishment populists.
So we need economic change, but we need political change more. Otherwise, the tally of populist voters will continue to grow.
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Why Capitalism Needs Populism
Globalization, digital technologies, and other factors have allowed competitive US corporations to achieve market dominance. If the past is any guide, it is only right that these "superstar" firms should now be challenged by grassroots political movements protesting against an unholy alliance of private-sector and government elites.
CHICAGO – Big Business is under attack in the United States. Amazon canceled its planned new headquarters in the New York City borough of Queens in the face of strong local opposition. Lindsey Graham, a Republican US senator for South Carolina, has raised concerns about Facebook’s uncontested market position, while his Democratic Senate colleague, Elizabeth Warren of Massachusetts, has called for the company to be broken up. Warren has also introduced legislation that would reserve 40% of corporate board seats for workers.
Such proposals may seem out of place in the land of free-market capitalism, but the current debate is exactly what America needs. Throughout the country’s history, it has been capitalism’s critics who ensured its proper functioning, by fighting against the concentration of economic power and the political influence it confers. When a few corporations dominate an economy, they inevitably team up with the instruments of state control, producing an unholy alliance of private- and public-sector elites.
This is what has happened in Russia, which is democratic and capitalist in name only. By maintaining complete control over commodity extraction and banking, an oligarchy beholden to the Kremlin has ruled out the possibility of meaningful economic and political competition. In fact, Russia is the apotheosis of the problem that US President Dwight D. Eisenhower described in his 1961 farewell address, when he admonished Americans to “guard against the acquisition of unwarranted influence” by the “military-industrial complex” and the “potential for the disastrous rise of misplaced power.”
With many US industries already dominated by a few “superstar” firms, we should be glad that “democratic socialist” activists and populist protesters are heeding Eisenhower’s warning. But, unlike in Russia, where the oligarchs owe their wealth to the capture of state assets in the 1990s, America’s superstar firms have gotten to where they are because they are more productive. This means that regulatory efforts have to be more nuanced – more scalpel than sledgehammer.
Specifically, in an era of global supply chains, US corporations have benefited from enormous economies of scale, network effects, and the use of real-time data to improve performance and efficiency at all stages of the production process. A company like Amazon learns from its data constantly to minimize delivery times and improve the quality of its services. Confident of its superiority relative to the competition, the firm needs few favors from the government – one reason why Amazon founder Jeff Bezos can back The Washington Post, which is often critical of the US administration.
But just because superstar firms are super-efficient today does not mean they will stay that way, particularly in the absence of meaningful competition. Incumbents will always be tempted to sustain their positions through anti-competitive means. By supporting legislation such as the 1984 Computer Fraud and Abuse Act and the 1998 Digital Millennium Copyright Act, the leading Internet firms have ensured that competitors cannot plug into their platforms to benefit from user-generated network effects. Similarly, after the 2009 financial crisis, the big banks accepted the inevitability of increased regulations, and then lobbied for rules that just so happened to raise compliance costs, thereby disadvantaging smaller competitors. And now that the Trump administration has become trigger-happy with import tariffs, well-connected firms can influence who gets protection and who bears the costs.
More generally, the more that government-defined intellectual-property rights, regulations, and tariffs – rather than productivity – bolster a corporation’s profits, the more dependent it becomes on government benevolence. The only guarantee of corporate efficiency and independence tomorrow is competition today.
The pressure on the government to keep capitalism competitive, and impede its natural drift toward domination by a dependent few, typically comes from ordinary people, organizing democratically in their communities. Not possessing the influence of the elite, they often want more competition and open access. In the US, the late-nineteenth-century Populist movement and the early-twentieth-century Progressive movement were reactions to monopolization in critical industries such as railroads and banking. These grassroots mobilizations led to regulations like the 1890 Sherman Antitrust Act, the 1933 Glass-Steagall Act (albeit less directly), and measures to improve access to education, health, credit, and business opportunities. By supporting competition, these movements not only kept capitalism vibrant, but also averted the risk of corporatist authoritarianism.
Today, as the best jobs drift to superstar firms that recruit primarily from a few prestigious universities, as small and medium-size companies find the path to growth strewn with impediments laid by dominant firms, and as economic activity abandons small towns and semi-rural communities for megacities, populism is emerging again. Politicians are scrambling to respond, but there is no guarantee that their proposals will move us in the right direction. As the 1930s made clear, there can be much darker alternatives to the status quo. If voters in decaying French villages and small-town America succumb to despair and lose hope in the market economy, they will be vulnerable to the siren song of ethnic nationalism or full-bore socialism, either of which would destroy the delicate balance between markets and the state. That will put an end to both prosperity and democracy.
The right response is not revolution, but rebalancing. Capitalism needs top-down reforms, such as updated antitrust regulation, to ensure that industries remain efficient and open to entry, and are not monopolized. But it also needs bottom-up policies to help economically devastated communities create new opportunities and maintain their members’ trust in the market economy. Populist criticism must be heeded, even if the radical proposals of populist leaders are not followed slavishly. This is essential to preserving both vibrant markets and democracy.
This commentary appears in connection with the Trento Festival of Economics. For more information about the event, go here. For Project Syndicate's collection of related commentaries, go here.
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The Populist Paradox
When anti-establishment populists come to power, they implement a range of policies that lead to lower economic growth and fewer good jobs. And yet the angrier people become, the easier it is to persuade them that the media are biased, the experts are always wrong, and the facts are not the facts.
WASHINGTON, DC – To defeat populism requires coming to grips with a fundamental reality: bad economic policies no longer necessarily result in a government losing power. In fact, it is now entirely possible that irresponsible populists may actually strengthen their chances of being re-elected by making wilder and more impossible promises – and by causing more economic damage.
How did we get to this point, and what steps can we take to escape it as quickly as possible?
Powerful structural economic factors in recent decades – including automation, trade, and financial crisis – have left many people feeling neglected or ill-treated by those, on the right and the left, who have had control over economic policy. When anti-establishment populists come to power, however, they implement a range of policies that create uncertainty and discourage investment. And less investment means lower economic growth and fewer good jobs.
Ordinarily, this would lead to a feedback mechanism in which the responsible government would be held accountable, ultimately at the ballot box. But populists are effectively circumventing this mechanism by encouraging the belief that the media are biased, the experts are always wrong, and the facts are not the facts. The angrier people become, the easier it is to persuade them to accept this narrative.
Brexit is a good example. If you ignore or disbelieve the economic data (as well as what any credible analyst has to say), then your personal experience in the United Kingdom over the next 12 months may be this: The new Conservative government withdraws from the European Union without an agreement, which disrupts trade and discourages firms from investing in the UK. Either unemployment will go up, or there will be fewer good jobs – or both.
But will the electorate blame the government? Possibly not, as anger levels will increase – a direct result of the spike in economic and financial volatility. The government will therefore find it easier to blame the EU, experts, academics, the press, and immigrants. The politicians most responsible for the Brexit disaster could actually benefit at the polls.
In India, Prime Minister Narendra Modi’s Hindu nationalists actually increased their parliamentary majority in the recent election, despite the government’s failure to fulfill its promises to voters. And in the United States, President Donald Trump’s re-election bid may follow a similar path. Trump seems intent on disrupting the US economy by prosecuting a full-scale trade war with China. Ordinarily, you might expect this to hurt him with voters who care about access to export markets – such as America’s highly productive farmers. Instead, Trump’s support seems to be holding up across rural areas, as well as other parts of his electoral base.
Tariffs are a tax on consumers and also hurt domestic firms that use foreign inputs. For example, the domestic steel industry might benefit from steel tariffs, but there are many more people employed in industries that use steel and thus are hit hard by those same tariffs. Despite this, populists in the US and elsewhere welcome various forms of protectionism. If this slows the economy, as it almost always does, voters will become angry – and easier to distract.
The only way to break this cycle is with policies that go to the heart of the issue – creating more good jobs where they are needed. In the case of the US, Jon Gruber and I, in our book Jump-Starting America, propose boosting public funding of research and development, and creating new innovation hubs around the country. R&D creates new ideas and products, and such innovation consistently supports economic growth.
Some commentators agree, but argue that any additional science-related push should be concentrated in the existing innovation hubs, such as the San Francisco Bay Area and Boston. But those regional economies are already crowded and expensive, and providing public resources to lift them further is an idea that is unlikely to find many takers at the national political level.
The US has a lot of talented people in many different locations – Gruber and I identify over 100 significant cities that could become innovation hubs. (If you like the general idea but want to assess the details for yourself, our interactive website, Jump-StartingAmerica.com, can help you do that.)
Versions of this idea would work in many other relatively rich countries, such as the UK or Western Europe more broadly. A concerted push to strengthen the infrastructure for science can both boost productivity and create the basis for more widely shared prosperity.
Of course, this is not the only constructive measure the government should take. Infrastructure can be updated and strengthened. Distributive outcomes can be tackled directly, including by raising minimum wages and ensuring that rich people actually pay some tax. And better training should be made accessible both for young people and for anyone who needs to shift to another industry as a result of automation and trade.
Overcoming the populist paradox – and preventing the associated downward economic spiral – requires policies designed to create more good jobs everywhere. Crafting such policies is one promise that politicians really can fulfill, and that defenders of liberal democracy can no longer afford not to make.
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What’s Driving Populism?
If authoritarian populism is rooted in economics, then the appropriate remedy is a populism of another kind – targeting economic injustice and inclusion, but pluralist in its politics and not necessarily damaging to democracy. If it is rooted in culture and values, however, there are fewer options.
CAMBRIDGE – Is it culture or economics? That question frames much of the debate about contemporary populism. Are Donald Trump’s presidency, Brexit, and the rise of right-wing nativist political parties in continental Europe the consequence of a deepening rift in values between social conservatives and social liberals, with the former having thrown their support behind xenophobic, ethno-nationalist, authoritarian politicians? Or do they reflect many voters’ economic anxiety and insecurity, fueled by financial crises, austerity, and globalization?
Much depends on the answer. If authoritarian populism is rooted in economics, then the appropriate remedy is a populism of another kind – targeting economic injustice and inclusion, but pluralist in its politics and not necessarily damaging to democracy. If it is rooted in culture and values, however, there are fewer options. Liberal democracy may be doomed by its own internal dynamics and contradictions.
Some versions of the cultural argument can be dismissed out of hand. For example, many commentators in the United States have focused on Trump’s appeals to racism. But racism in some form or another has been an enduring feature of US society and cannot tell us, on its own, why Trump’s manipulation of it has proved so popular. A constant cannot explain a change.
Other accounts are more sophisticated. The most thorough and ambitious version of the cultural backlash argument has been advanced by my Harvard Kennedy School colleague Pippa Norris and Ronald Inglehart of the University of Michigan. In a recent book, they argue that authoritarian populism is the consequence of a long-term generational shift in values.
As younger generations have become richer, more educated, and more secure, they have adopted “post-materialist” values that emphasize secularism, personal autonomy, and diversity at the expense of religiosity, traditional family structures, and conformity. Older generations have become alienated – effectively becoming “strangers in their own land.” While the traditionalists are now numerically the smaller group, they vote in greater numbers and are more politically active.
Will Wilkinson of the Niskanen Center recently made a similar argument, focusing on the role of urbanization in particular. Wilkinson argues that urbanization is a process of spatial sorting that divides society in terms not only of economic fortunes, but also of cultural values. It creates thriving, multicultural, high-density areas where socially liberal values predominate. And it leaves behind rural areas and smaller urban centers that are increasingly uniform in terms of social conservatism and aversion to diversity.
This process, moreover, is self-reinforcing: economic success in large cities validates urban values, while self-selection in migration out of lagging regions increases polarization further. In Europe and the US alike, homogenous, socially conservative areas constitute the basis of support for nativist populists.
On the other side of the argument, economists have produced a number of studies that link political support for populists to economic shocks. In what is perhaps the most famous among these, David Autor, David Dorn, Gordon Hanson, and Kaveh Majlesi – from MIT, the University of Zurich, the University of California at San Diego, and Lund University, respectively – have shown that votes for Trump in the 2016 presidential election across US communities were strongly correlated with the magnitude of adverse China trade shocks. All else being equal, the greater the loss of jobs due to rising imports from China, the higher the support for Trump.
Indeed, according to Autor, Dorn, Hanson, and Majlesi, the China trade shock may have been directly responsible for Trump’s electoral victory in 2016. Their estimates imply that had import penetration been 50% lower than the actual rate over the 2002-14 period, a Democratic presidential candidate would have won the critical states of Michigan, Wisconsin, and Pennsylvania, making Hillary Clinton the winner of the election.
Other empirical studies have produced similar results for Western Europe. Higher penetration of Chinese imports has been found to be implicated in support for Brexit in Britain and the rise of far-right nationalist parties in continental Europe. Austerity and broader measures of economic insecurity have been shown to have played a statistically significant role as well. And in Sweden, increased labor-market insecurity has been linked empirically to the rise of the far-right Sweden Democrats.
The cultural and economic arguments may seem to be in tension – if not downright inconsistent – with each other. But, reading between the lines, one can discern a type of convergence. Because the cultural trends – such as post-materialism and urbanization-promoted values – are of a long-term nature, they do not fully account for the timing of the populist backlash. (Norris and Inglehart posit a tipping point where socially conservative groups have become a minority but still have disproportionate political power.) And those who advocate for the primacy of cultural explanations do not in fact dismiss the role of economic shocks. These shocks, they maintain, aggravated and exacerbated cultural divisions, giving authoritarian populists the added push they needed.
Norris and Inglehart, for example, argue that “medium-term economic conditions and growth in social diversity” accelerated the cultural backlash, and show in their empirical work that economic factors did play a role in support for populist parties. Similarly, Wilkinson emphasizes that “racial anxiety” and “economic anxiety” are not alternative hypotheses, because economic shocks have greatly intensified urbanization-led cultural sorting. For their part, economic determinists should recognize that factors like the China trade shock do not occur in a vacuum, but in the context of pre-existing societal divisions along socio-cultural lines.
Ultimately, the precise parsing of the causes behind the rise of authoritarian populism may be less important than the policy lessons to be drawn from it. There is little debate here. Economic remedies to inequality and insecurity are paramount.
CHICAGO – In the Middle Ages, Italian city-states led the European “commercial revolution” with innovations in finance, trade, and technology. Then something strange happened. In 1264, to take one example, the people of Ferrara decreed that, “The magnificent and illustrious Lord Obizzo … is to be Governor and Ruler and General and permanent Lord of the City.” Suddenly, a democratic republic had voted itself out of existence.
In fact, this was not an uncommon occurrence in Northern Italy at the time. As Niccolo Machiavelli explains in The Prince, the people, seeing that they cannot resist the nobility, give their support to one man, in order to be defended by his authority. The lesson is that people will abandon democracy if they are worried that an elite has captured its institutions.
Medieval Italy’s democratic institutions succumbed to what we might now call populism: an anti-elitist, anti-pluralistic, and exclusionary strategy for building a coalition of the discontented. The method is exclusionary because it relies on a specific definition of “the people,” whose interests must be defended against not just elites, but all others. Hence, in the United Kingdom, the Brexit leader Nigel Farage promised that a vote for “Leave” in 2016 would be a victory for the “real people.” As Donald Trump told a campaign rally the same year, “the other people don’t mean anything.” Likewise, former Colombian President Álvaro Uribe often speaks of the “gente de bien” (the “good people”).
There are two obvious reasons why such populism is bad. First, its anti-pluralistic and exclusionary elements undermine basic democratic institutions and rights; second, it favors an excessive concentration of political power and de-institutionalization, leading to poor provision of public goods and subpar economic performance.
Nonetheless, populism can become an attractive political strategy when three conditions obtain. First, claims about elite dominance must be plausible enough that people believe them. Second, in order for people to support radical alternatives, existing institutions need to have lost their legitimacy or failed to cope with some new challenge. And third, a populist strategy must seem feasible, despite its exclusionary nature.
All three conditions can be found in today’s world. The increase in inequality over the past 30 years means that economic growth has disproportionately benefited a small elite. But the problem is not just inequality of income and wealth: there is also a growing suspicion that the social distance between the elite and everyone else has widened.
These economic and social disparities have profound implications for political representation. In the US, political scientist Larry M. Bartels has shown that while legislators have increasingly defended the interests of the rich, gerrymandering has spared them from political competition. In Europe, Jean-Claude Juncker, while serving as prime minister of Luxembourg, once described the European Council’s decision-making as follows: “We decree something, then float it and wait some time to see what happens. If no clamor occurs … because most people do not grasp what had been decided, we continue – step by step, until the point of no return is reached.” Such elitist logic is intrinsically vulnerable to populism.
As a de-institutionalizing strategy, populism appeals to the growing cohort of those who are disillusioned with existing arrangements. In the US, the widespread perception that institutions have failed to address issues such as inequality has been eroding public trust in major institutions since the 1970s. After failing to anticipate the 2008 financial crisis, US policymakers are now struggling to regulate (and tax) new “mega-firms” like Amazon and Facebook. They are also seen as having dropped the ball with respect to globalization and the effects of the “China Shock” on local labor markets. Similarly, in Europe, increased labor mobility and rolling refugee crises are widely seen as having surpassed EU institutions’ carrying capacity.
In addition to managing new challenges poorly, institutions and policymakers have also failed to look beyond their own dominant narratives. For example, in the run-up to the Brexit referendum, the “Remain” campaign focused entirely on the economic costs of leaving the European Union, even though opinion polls showed that migration and other issues were of much greater concern to voters.
Finally, for populism to get a foothold, politicians themselves must see it as a viable strategy. Generally speaking, declaring that the “other people don’t mean anything” isn’t the best way to garner broad support. So, even when structural factors favor it, populism can succeed only in certain circumstances. In Trump’s case, the intense partisan polarization in the US means that he can appeal to marginal or swing voters, because he knows that Republicans will vote for him no matter what. And, more generally, populism can win when the “other people” are narrowly defined or simply small in number, provided that they can still be depicted as posing a threat.
To defeat populism, then, one must address all the factors that make it a viable strategy. That starts with recognizing that populism can emerge only when there are real social and economic problems to give it electoral traction. It also means being honest about the fact that there are competing and contested visions of citizenship, which should be debated, not ignored.
Finally, we need more democracy and representation – including, possibly, referenda – so that voters feel as though their concerns are being taken seriously. The political class should be exploring new ways to make government more representative of society. India, for example, has caste-based quotas for parliamentary seats and other positions, and many other countries do the same with respect to gender. There is no reason why the US and Europe couldn’t pursue similar measures.
This commentary appears in connection with the Trento Festival of Economics. For more information about the event, go here. For Project Syndicate's collection of related commentaries, go here.