Tuesday, October 24, 2017

The New Populism Isn't About Economics

I think Tyler Cowen is on to something when he writes:
It’s time to admit that the nationalist turn in global politics isn’t mainly about economics or economic failures. Instead,
the intellectual and ideological and cultural battles in some countries have led to these new political directions under a wide variety of economic conditions, some of them quite positive.

One obvious explanation for populism and nationalism is that many countries are globalizing with more immigration, trade and foreign investment. It’s a cultural crisis more than an economic one, as citizens see their national identities shifting. Some electorates respond by wanting to turn back the clock or at least hinder its acceleration. That said, I don’t think we yet know why some countries or regions are more shaken than others by these globalizing processes. In Europe, it is often the central and eastern countries, with relatively low immigration levels, that are the most upset about immigration.

The explanation for populism and nationalism may have some nested features, with economic factors still playing a role. If citizens fear for cultural cohesion, relatively small pieces of bad economic news may take on an outsize importance in their minds. Both the subpar economic results and the cultural shifts are taken as signs that the political elites are not to be trusted, and an entry point is created for more radical alternatives. We’re also living in an era when autocratic regimes seem to be enjoying the most relative success, and that too may help spread illiberal ideas.

So the next time you hear material discontent cited as driving electoral results, just remember that economic data are usually interpreted through a cultural lens.
Indeed, he provides this data to back up his observation:

Economic theories of populism are dead, we Americans just don’t know it yet. Over the past week, two countries have brought populists to power, but in both cases those places have been enjoying decent economic growth.

Andrej Babis’s party dominated the Czech national election Saturday, and he is almost certain to become the next prime minister. Babis has been described as “the anti-establishment businessman pledging to fight political corruption while facing fraud charges himself” -- sound familiar? Yet in 2015, the Czech Republic had the European Union’s fastest growth rate at more than 4 percent; earlier this year, it was growing at 2.9 percent, with potential seen on the upside.

Last week’s negotiations in New Zealand brought Labour Party leader Jacinda Ardern to power, with populist firebrand Winston Peters in the coalition government. Ardern wants to cut immigration, possibly in half, and place much tighter restrictions on foreign investment. Although New Zealand’s economic growth has been slowing, it’s mostly been above 2 percent since the end of the financial crisis.

Among emerging economies, the Philippines moved from being an Asian growth laggard into some years of 8 percent growth. Voters responded by electing as president Rodrigo Duterte, one of the most aggressive and authoritarian populists around. In eastern Europe, Poland has been seeing average 4 percent growth for more than 25 years, yet the country has moved in a strongly nationalist direction, flirting with sanctions from the EU for limiting judicial independence. Hungary, Slovakia, Slovenia and now the Czech Republic all are much wealthier than 20 years ago and mostly have been booming as of late. Yet to varying degrees they too have moved in nationalist, populist and possibly even anti-democratic directions.

Although these countries have rising inequality, their growth rates have elevated a wide swath of the citizenry, not just a few extremely wealthy people.

Even the U.S. fits this mold of prosperity and populism more than many people realize. For all the talk of stagnant wages, poll data indicated that Donald Trump’s supporters in the Republican primaries had a median income of about $72,000, which is hardly poverty.
Bottom line: The masses are really clueless when turning in an authoritarian direction. Probably more than anything, they view authoritarianism as an antidote to cultural Marxism. What a mistake. CM is bad but so is nationalist authoritarianism.



  1. I learned about Rothbard in a senior poly sci class in 1973. The prof assigned, along with “Power and Market”, “POLITICS IN PLURAL SOCIETIES - A Theory of Democratic Instability” by Alvin Rabushka and Kenneth A. Shepsle. It’s now free to download:


    A country by country empirical analysis shows that democracy in multi-ethnic societies leads straight to ethnic conflict. The more “public goods”, the worse things are because the winner of the election controls the government which owns everything and everyone ALWAYS votes tribal.

    (Rx) Prescriptions for the Plural Society:

    Some Applications of the Theory

    Page 216 4. Restrictions on the scope of government. Public goods in the plural society often become the preserve of the advantaged political community and tend to be viewed as public bads by those communities excluded from power. Since the provision of public goods by the state is its primary raison d'etre, regime legitimacy often suffers when public funds are used to provide communal goods. If our theory is sound, an agreement to minimize the scope of public goods — and a reliance on the free market — should tone down the invidious quality of ethnic politics in the plural society.

    Page 217 A Final Question

    Conclusions are often banal and trite. Important theoretical questions are either begged or isolated as topics for future research. We propose neither to move cautiously towards the formation of a few tentative hypotheses, to allude to problems of measurement, nor to get lost in a maze of methodological discussion (which is very often beside the point). Instead we ask, IS THE RESOLUTION OF INTENSE BUT CONFLICTING PREFERENCES IN THE PLURAL SOCIETY MANAGEABLE IN A DEMOCRATIC FRAMEWORK?


  2. "Probably more than anything, they view authoritarianism as an antidote to cultural Marxism."

    If twitter is any indication then this nails it on the head. Liberty (if they ever believed it at all) takes a back seat for "temporary" statism which then somehow can be switched off once the enemy is defeated.

  3. In the former Eastern Bloc countries - Hungary, Slovakia, Slovenia and the Czech Republic - some of this populism may be vestiges of Communist rule. I understand that in Russia and Ukraine along with pessimism, bigotry and the want for a strong leader, populism is part of the culture. Could this have rubbed on off on these Eastern Bloc countries?

    New Zealand and the US are obviously different stories.