As I’m sure everyone with even a passing interest in politics has noticed “populist” parties have done very well in a number of elections across Europe and North America and in this piece I want to discuss possible reasons why. Some of the more common ones I’ve heard are that:
1. Wealth inequality is finally at such a severe level that mainstream politicians are serving the interests of the rich, whether they know it or not. Essentially this view is that the rich have ‘captured the state’ and uses it for their own ends.
2. Large scale immigration is making traditional nation states which used to be quite homogenous feel uncomfortable with the new arrivals which has sparked a discussion about what nationality is and how inclusive society should be.
Personally, I think people are mistaking the symptoms for the underlying issue. I propose two other explanation of populism which are not mutually exclusive, indeed my view is that they work in tandem to create a political environment suitable for populist ideas. For simplicity’s sake I will call these explanations 3 and 4.
3. Politics has a cycle where mainstream parties move towards the centre to gain more support which causes their main opponents to do the same until there comes a point where the grassroots want the party to move away from the centre. At this point voters feel that the main parties are to similar and want the parties to move out from the centre to show more ideology, which they do. This continues until the cycle restarts.
4. Governmental policy in the wake of the Great Recession of 2008 has successfully gotten growth back on track but the working class and middle class get very few of the benefits from growth. Liberal democracy derives its legitimacy from increasing living standards and most people feel as though the system is rigged against them and the main parties are to blame so voters place their trust in political movements which are seen as separate from the mainstream.
The reason I don’t find the first two explanations satisfactory is that both inequality and immigration has been widespread in the West for a long time. If immigration really was the underlying cause then shouldn’t Alternative für Deutschland have formed when the Yugoslav wars were raging? And if inequality was the underlying cause shouldn’t Occupy have formed in the 90’s or early 00’s?
My take on populism is that the principal cause is that the political system in the West has broken its social contract with its citizens. Western liberal democracy derives its legitimacy from increasing living standards, and indeed few regimes have been able to enrich their citizens as much as liberal democracies since 1945. However, when Lehman Brothers collapsed the political and financial establishment chose to bail out the big financial actors and subsequently chose to start Quantitative Easing, or QE as it came to be known. For those not familiar with unconventional monetary policy let me give a basic explanation of what QE is. QE is a programme where the central bank prints new money which it uses to buy assets, usually in the form of government bonds, from big financial institutions. Assets are things like shares in companies, bonds, and real estate and it goes without saying that those who tend to have a lot of assets are the wealthy. In April in 2009 the Standard & Poor’s 500, an index tracking the 500 largest American publicly listed companies was at 872.81. In September 2018 it was 2913.98. This means that on average, a share included in the S&P 500 has a value six times greater today than it did in 2009. Assuming one had all their wealth invested in S&P 500 companies one’s wealth would be on average three times greater today than it was nine years ago. How many of those reading this have had their wealth increase three-fold in the last nine years? According to The Guardian in 2015, real wages (that is wages adjusted for inflation) had decreased by 10.4% between 2007 and 2015 in the UK. It’s no wonder that the UK has had both Brexit and Corbin after the Great Recession, few advanced countries have let down their citizens in such a dramatic way if one assumes that the legitimacy of British liberal democracy rests on London’s ability to enrich the British people. For these reasons I don’t believe that any of the populist parties and movements in the rich world are taking over mainstream politics. I believe that the primary reason why most vote for populist outfits is that they want to protest against the failures of the mainstream parties rather than a ideological conviction. In essence, most vote for AfD because they’re angry not because they share AfD’s worldviews.
With all this said, I’m not sure where we go from here. Due to the structure of democracies where there are a few years between elections I think we’ll have a few more years of this political climate at least. Whether it blows over or not remains to be seen.
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