Tuesday, October 24, 2017

The Only Way to Stop Populism


The recent election results in Austria and the Czech Republic show that populism is not about to go away anytime soon in Europe. Nor do recent events in the United States, despite the Trump administration's legislative incompetence and Trump's historically low approval ratings, indicate that populism is about to disappear from the American political landscape.


The basic reason for this is simple. Capitalism is in a long transition from an industrial to a postindustrial, services-based model of society and so far the transition has not gone well. As this transition unfolded in the last two or three decades of the 20th century, Western capitalist societies saw a distinct slowdown in economic growth, twinned with a startling rise in inequality. The early 21st century continued these trends with the global financial crisis of 2007-08 dealing a grievous blow to advanced economies, the worst since the Great Depression of the 1930’s. Many countries have recovered from this damage only recently and some have not yet done so.

So we are now talking about many decades of poor economic performance, particularly as it has affected those with low or modest skills whose livelihoods were connected to the old industrial economy. Elites on both the right and the left have appeared powerless to either accelerate this transition so it arrives at someplace good for most people or push it back to a better place. Thus mainstream parties and leaders are suffering and populist ones are rising.


For the broad left, this dynamic has been particularly problematic. Across advanced countries, the left has faced, and is facing, the same general problem. On the one hand, the transition to postindustrial society has thrown up a raft of newly left-leaning constituencies. Minorities and women appreciate the fall of barriers to their full participation in society and the economy and see progressive government as a guarantor of further upward mobility. Professionals and the highly-educated have fared relatively well from the transition, support the emerging cosmopolitan values of postindustrial society and see government as a provider of essential services and investments such a society needs. Younger generations too support these new values, know that their future lies in postindustrial society and want government to help them find their place within it.

On the other, the left, particularly the mainstream left, has seen its support crater among formerly left-leaning traditional working class voters who fared well in the old industrial society and cannot find a satisfactory place in the new one. It is these voters who have powered the emergence of right populist figures like Trump and his ilk. The rate of desertion from the left has been fast enough that it has effectively undermined the left’s ability to assemble effective political coalitions that include both their new constituencies and a sufficiently large portion of their old working class voters.

That is the left’s challenge and it is not an easy one to meet. In fact, many on the left fear that right populism will just continue to grow, riding a tide of economic anxiety and cultural resentment to a commanding political position and providing a permanent barrier to left advance. This is highly unlikely. Those on the left would be well-advised to keep in mind the prescient words of economist Herbert Stein, usually known as Stein’s Law: “if something cannot go on forever, it will stop”.

The real question is what comes next. What political force could undercut the populist dynamic and stabilize support for postindustrial society? The obvious answer is one that can reduce the collateral damage from the postindustrial transition and make it work for a much larger segment of the population.

Unless one believes the postindustrial transition can somehow be reversed, the only answer is to accelerate the transition and build a  new and healthier growth model for contemporary capitalism. That is what the left should aim for. While other issues are important, they are all secondary to this overriding issue. And until the new growth model can be perceived by voters and deliver concrete benefits, expect populism to continue to bedevil Western capitalist societies.

Thus, it is not enough for the left to simply win more elections. They must govern, when they have a chance, to push this central objective forward. Nothing else will defuse populism and put the left's most cherished goals within reach. 

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