Skip to main content

Cookies and Privacy

We use cookies to improve your experience on our website. To find out more, read our updated Cookie policy, Privacy policy and Terms & Conditions

london bedroom tax challenge Dan Kitwood/Getty Images

Good Politics, Bad Economics

Advocates of liberalism find it hard to accept that populist and authoritarian governments could ever formulate sound economic policies, and they often assume that "free markets" will always provide widespread prosperity and accountability. They're mistaken on both counts.

LONDON – Bad economics breeds bad politics. The global financial crisis, and the botched recovery thereafter, put wind in the sails of political extremism. Between 2007 and 2016, support for extremist parties in Europe doubled. France’s National Rally (formerly the National Front), Germany’s Alternative für Deutschland (AfD), Italy’s League party, the Freedom Party of Austria (FPÖ), and the Sweden Democrats have all made electoral gains in the past two years. And I haven’t even mentioned Donald Trump or Brexit.

To be sure, this explosion of political extremism cannot be explained by economic distress alone. But the correlation between bad economic events and bad politics is too striking to be ignored.

By bad politics, I mean the xenophobic nationalism and suppression of domestic civil liberties seen in countries with populist governments. By good politics, I mean the internationalism, freedom of expression, and accountable governance that prevailed during the post-war era of prosperity. Let’s call them illiberal and liberal democracy for short.

We hope you're enjoying Project Syndicate.

To continue reading, subscribe now.

Subscribe

Get unlimited access to PS premium content, including in-depth commentaries, book reviews, exclusive interviews, On Point, the Big Picture, the PS Archive, and our annual year-ahead magazine.

https://prosyn.org/oRgve7t;
  1. lhatheway7_Claudio Santistebanpicture alliance via Getty Images_ECBFedLagardePowell Claudio Santisteban/picture alliance via Getty Images

    Restoring Central Banks’ Credibility

    Larry Hatheway

    The old central-bank playbook of slashing interest rates to spur consumption, investment, and employment has become less effective since the 2008 financial crisis. Yet without effective tools and the public's confidence, central banks will be unable to rise to the occasion when the next recession arrives.

    0
  2. fischer163_action press-PoolGetty Images_natoflagsoldiers Action Press-Pool/Getty Images

    The Day After NATO

    Joschka Fischer

    French President Emmanuel Macron has drawn criticism for describing NATO as brain dead and pursuing a rapprochement with Russian President Vladimir Putin. But now that a wayward America could abandon the continent at any moment, Macron's argument for European defense autonomy is difficult to refute.

    8