The last few decades have been called the age of rational self-maximisers.  But is it still the case?  

All over the Western world populism is rife   ̶   mostly of the right-wing type.  It got its greatest shot in the arm with the election of Donald Trump in 2016, was followed by Brexit in 2020, and in the last couple of years has emerged as the the politics of choice in many EU member states.

What is populism? It is the political science of providing simple answers to complex questions. It flourishes in periods of profound change, when uncertainty prevails.  It has happened before, for example when a tangled skein of forces — technical, scientific, economic and cultural — transformed Western societies from primarily rural to urban and agrarian to industrial.

Starting in 1760 and for four subsequent decades, every walk of life was altered. Revolutions broke out around the world.  Wars were waged among moribund monarchies.  Intellectuals could spend a lifetime trying to explain it all, but in those days the typical populist boiled it down to a problem of railroad barons and Jews.

As of 2008, we started living in another such era of profound change and uncertainty. In an interview with The Washington Post a few years ago, Janet L. Yellen, the former chair of the Board of Governors of the Federal Reserve System, sketched some of the cross-currents that have unsettled lives in the United States and beyond. A jumble of forces   ̶   from globalism to smartphones to fertility rates   ̶   have combined to hollow out the middle class. Rising inequality, Yellen suggested, is the defining economic fact of our era.

The factors involved

Dozens of books have been written on the factors involved: the globalised workforce, the rise of automation, the acceleration of shipping, the science of supply-chain management, the cultural changes that have resulted in smaller families, rapid ageing, stagnating consumption, rising medical costs, and slower productivity gains. These have coupled with the shift from a hardware to a software economy, which uncouples economic activity from natural resources and allows wealth to pile up in a few favoured locales.

In economic terms, developed countries have entered a long period of low growth. Despite massive budget deficits that any Keynesian would expect to boost gross domestic product, many economies have averaged less than 2 percent per year. This is a big deal: Growing the pie, as opposed to slicing it up, has been the key to create the middle class everywhere. Slow growth is surely a contributing cause of its decline.

The seeds of populism

The outlook is still very troubled for the USA, Europe and Japan. Limping along like economic zombies, their low growth threatens the opportunity to advance   ̶   the essence of middle-class society.  As a result, divisions have opened up along educational, religious, generational, and geographical lines.  This is what has sown the seeds of poisonous populism.

Given the risks this phenomenon poses to Western societies’ basic political unity and stability, we can probably never have enough good research into how, exactly, it developed in the first place.  An example of this has been provided by three US social scientists with a new analysis that applies fresh data and a sceptical attitude to conventional wisdom about populism: that is, the notion that it’s a manifestation of voter “rage”   ̶   that which I would associate with the kinds of Trump, Farage, and Norman Lowell.

Their new study   ̶   ‘Does Anger Drive Populism?’ —answers the question they ask  in the affirmative, but with a major caveat: Anger alone cannot account for recent voter shifts in favour of populist candidates (of both the left and right).  Rather, the trends reflect a wider mix of negative emotions such as sadness, stress and worry.

The data for their study came from Gallup studies in which pollsters asked up to 1,000 individuals to describe their subjective feelings daily in periods spanning from 2008 until 2017.   These polls generated a huge number of discrete responses (3.5 million), enough with which to estimate average levels of anger and other emotions, including positive ones, for each county in the country during the relevant periods.

The social scientists   ̶   Romain Wacziarg of UCLA, Omer Ali of Duke University and Klaus Desmet of Southern Methodist University   ̶   found that a county’s average anger level correlated positively with higher vote shares for Trump and for socialist populists.

The authors adjusted these results for the simultaneous occurrence of other negative feelings in the angriest counties. They found that “anger no longer operates as a separate channel in driving the populist vote share.”  Instead, “a more complex sense of malaise and gloom, rather than anger per se, drives the rise in populism.”  People also had abundant other reasons to feel worried, stressed or sad: such as de-industrialisation or alcohol use, with accompanying addiction and suicides. These feelings were even more accentuated among non-educated Whites, consistent with analyses of right-wing populism that attribute it to racial resentment.

Blaming immigrants

Blaming immigrants and refugees for the economic disruption of the middle class is as popular in the Rust Belt of the USA, Berlin, Brest, and Brighton as it is in Malta.  Here, an elite group of powerful people with tentacles in the government have greatly enriched themselves at the expense of the rest of the population and the environment; the middle class has seen its economic security increasingly threatened; and lowly-educated and socially-disinterested people have increasingly bought into the idea that all our ills are due to the Indians, Pakistanis, Nepalese, and Filippinos.  Many have already bought into populist thinking.  Fears of being “over-run” and “losing our identity and culture” are rife on the social media, blaming it all on those people who are compensating for our low fertility rate.  

The antidote

Is there an antidote?  Complexity feeds populism; simplicity tends to cure it.  I believe that populism can be cured through competent, responsible leadership. The rise of today’s populism cannot be blamed on demagogues alone. A measure of responsibility belongs to political leaders, thought leaders, and cultural leaders who blithely celebrated rapid economic and social change without enough concern for the wreckage.  In their excitement and haste, they lost touch with those whose social contracts and hopes for the future were part of what was broken.

The other part of this is that, as Alexis de Tocqueville told us, there’s nothing more dangerous than unmet expectations. That, at least, is what economists Alan de Bromhead, Barry Eichengreen and Kevin O’Rourke found when they tried to figure out what explained the rise of right-wing extremism in the 1930s.

“What mattered,” they wrote, “was not the current growth of the economy but cumulative growth.” Which is just another way of saying that it wasn’t a question of how fast you were moving toward where you thought you’d be, but rather how far you were from it.

Fast-forward to Malta in the last 12 years, where fast GDP growth has been the god at which we worship.  The situation is the exact opposite of the 1930: rather than large unemployment, we have a record low; instead of recession, we have buoyant growth; instead of hyper-inflation, we have had relatively low inflation, except for the recent short bout which has now largely petered out. But some would say that, because of this, we have moved back rather than forward.  Some people have even resorted to calling for de-growth   ̶   an insane idea, if ever there was one.

A civic culture

Of course, regardless of where populism rises on the political spectrum, it is inevitably fated to fail.  Simple prescriptions prove inadequate to a complex world. We can shut out the immigrants. What we can’t do is stem the tides of change. Sooner or later, they demand our attention. 

One prescription that could help defeat populism is civic culture: it is a crucial ingredient of democratic stability usually transmitted between generations in the household, in schools, and in the broader society.  As Thorston Persson and Guido Tabellini had argued in Democratic Capital: The Nexus of Political and Economic Change, a civic culture appears to reduce exit rates from democracy and raise exit rates from autocracy.  Higher democratic capital stimulates growth by increasing the stability of democracies.

Their results suggest the possibility of a virtuous circle, where accumulation of physical and democratic capital reinforce each other, promoting economic development and consolidation of democracy.  Their analyses suggest that extremists can benefit more from economic uncertainty and disruption in countries without a well-developed political tradition and poorly endowed with democratic capital.  This entails the existence of non-government organisations and civil society groups which militate against autocracy.

To push back against populism, liberal democratic actors should avoid language and framing that link identity and partisanship, fostering interaction between different economic and social groups, pursue strategies to reduce political polarisation, and reduce the disconnect between citizens and political parties.   Good God, this seems to be precisely the opposite of what is happening in Malta.

It is also important to recognise that the deeper sources of discontent with the prevailing political system (both in Government and in Opposition)   ̶   issues as income and wealth inequality, immigration, and the role of money in politics   ̶   cannot go unaddressed.

Main image: Imago Images/Eva Bee