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Economics

Las verdaderas raíces del populismo

Jul 28, 2016 Andrés Velasco

MONTEVIDEO – La globalización desbocada ha destruido empleos, ha causado el estancamiento de los ingresos de la clase media y ha profundizado la desigualdad de ingresos. Frente a esto, los votantes ventilan su ira volcándose hacia políticos populistas. Si no damos un paso que nos distancie de manera radical de las políticas económicas liberales, el populismo será imparable.

Esta narrativa es simple y cada vez más popular. También es totalmente equivocada.

Precisamente porque el populismo –ya sea de izquierda (Hugo Chávez en Venezuela, Podemos en España) o de derecha (Donald Trump en Estados Unidos, el Frente Nacional en Francia)– es feo, amenazante y destructivo, su creciente fuerza exige una explicación matizada. La comprensión débil de sus causas llevará a soluciones mal concebidas, y entonces puede que el populismo de veras se torne imparable.

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Andrés Velasco

Writing for PS since 2001
134 Commentaries

Andrés Velasco, a former presidential candidate and finance minister of Chile, is Dean of the School of Public Policy at the London School of Economics and Political Science. He is the author of numerous books and papers on international economics and development, and has served on the faculty at Harvard, Columbia, and New York Universities.

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0 Comments on this paragraph, 14 Comments on this article

Martin Screeton Aug 29, 2016

I have to wholeheartedly agree with those words... "Today, liberal democratic values are once again under siege, and the path paved by Keynes and Roosevelt is still the only way out. We should follow it."
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JohnPS Gmodzel Aug 2, 2016

It seems that populism is a push by the middle class in democracies against complexity. Dependence of world trade is a risky and uncontrollable business. Nonetheless political and intellectual elites chart complicated courses of action that cannot be adequately explained to the polity or have less than desirable short term consequences. Heartless economists pound the economic globalization drum and blithely recommend government handouts to proud individuals so they can land a computer programming job 4 yrs in the future. Individual investors have to keep tabs on the yen, euro, yuan, tens of central banks and thousands of foreign politicians of unknown competence before investing their savings.

Is this all necessary? For what ?- to allow the top 1% of my countrymen to accrue more than 20% of their country's wealth? It's not necessarily saying that globalization is not the optimum course, it's just that a simpler less complex solution is available. This solution is much more capable of being understood by the voting class, much more controllable at a local level and hence more appealing. It's a feeling that either course will get us there eventually - why take a more complex course? People can call it protectionism, I think of it as localization.

Suffice to say that the paragraph about being "Keynesian throughout the economic cycle" seems a bit naive based on my life experience.
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dan baur Jul 29, 2016

What the heck is populism and why is Trump one but not Obama and Clinton? Keynesianism NEVER worked. NEVER. Why keep promoting this theoretical nonsense? FDR was a criminal that sent millions of people to die in an imperialistic war - no different that the other dictators of the time: Stalin, Hitler, Mussolini. He also sold half of Europe in communist slavery.
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Curtis Carpenter Jul 28, 2016

I see this as a serious -- and not a little dangerous -- oversimplification of the causes of 21st century populism. There is certainly an economic dimension to the phenomenon -- but it's only one dimension.
And if we _must_ pick one dimension to emphasize, I would urge us to follow Nietzsche, not Smith, and focus on _power_.

Contrary to its basic principle, more and more people are coming to believe that "democracy" in its current manifestations no longer vests any real power in the people. Bought elections produce bought political leaders who champion bought policies. But the coin in these transactions is power, which can only sometimes be measured in economic terms.

The people sense that they have lost their sovereignty. Is it any surprise then, really, that they're a little angry, a little upset with the nouveaux royals that roam the palaces of J.P. Morgan, Citibank, UBS and the rest, with smaller chateaus in Washington, London, Frankfurt and the like?

Time to free a few people from watching the shadows play on the wall of the economic cave they're confined to and take a peek outside.
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koen van peteghem Jul 28, 2016

For populism to succeed it takes democracies that are perceived to be weak. Current democracies are perceived to be weak due to:
1. the total impunity of those having caused the banking crisis. ( bankers smoke even bigger cigars today)
2. the non action on ISIS. ( how to allow barbed Nazis and not react?)
3. not waking up to the reality of the current terror and acting decisively.
4. deeply imbedded inefficiencies of governement.

but there is more.
1 offshoring and automation brings the awareness that for the less well equipped, well paid jobs will have disappeared forever. And there is no answer on how to bring them back. So now it s no longer a dip but a structural exclusion.
2. individualism has dissolved the social fabric that allowed the vulnerable individual to find comfort in the group. Many now find out that the so called freedom in fact is little more than being responsible for everything. With nowhere to go for help. with the closing of large manufacturing , social coherence among large amount of co workers has disappeared. And a lot of self esteem, pride and career opportunities with them. so not only have prospects been decimated, there is a sense of devaluation.

Add the sudden tsunami of refugees on a scale we haven't seen since ww2 and the circumstances are all present for the opportunists to harvest all the uncertainty. All these have to do is sense the mood and adapt their song. what they provide is the opportunity to shout and to belong to a tribe.

Moreover as with ISIS , also for populists Social media now offer the opportunity to cheaply create a non stop stream of misinformation that then drowns facts and can spread an respread this unrelentlessly... so not only the circumstances are optimal, the tools to achieve success have never been more powerful..
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Michael Public Jul 28, 2016

What you are experiencing is the 2nd stage of shock. Denial. You are in denial about neoliberalism having fundemental problems, like winner takes all. The Good news is you must only go through the bargaining and depression stages before you reach acceptance. It is never fun to have one's worldview shattered, but consider it a part of life's journey and the pain will soon pass.
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Daniel Esmond Jul 28, 2016

While not denying the impact of significant economic and social changes, one might need to question whether there is such a clear and undisputable causality between such economic and social changes and the rise of populism/populists. We should be mindful of being overly deterministic, which runs the risk of ignoring other likely causes that might be equally valid or acting in conjunction with economic/social changes.
What if the rise of populism/populists is driven by the sheer ambition of fringe politicians to win power? Ruthlessly distorting realities, creating, amplifying (and not just reflecting or responding to) popular anxieties, tapping into the darker depth of collective psyches by legitimising aggressive nativism/nationalism, broad range of phobias, racism etc. With a media in crisis and with the availability of social media and digital technology, they can easily disrupt a liberal consensus which relegated to the extremes such discourses and build up a powerbase amongst those who are ready to validate the same values.
We are abdicating from a moral position if we end up ignoring this dynamic and justify the appeal of populists solely on the grounds of economic or social change due to globalisation and the negative impacts it has on blue collar workers or rural populations.
Also, the genealogy of most current populist movements can demonstrate this lack of direct causality: the Trump phenomenon can be traced back at least to the Newt Gingrich conservative revolution which was more than anything a cultural movement leading to the resurgence and partial empowerment of the religious right. That was followed by the anti-government Tea Party and Murdoch’s Fox News, further delegitimising the same liberal consensus and traditional, centrist political arguments. All these were based primarily on cultural warfare and prepared the ground for the emergence of Trump. We can see similar patterns for UKIP and Farage (coming from the legitimisation of the radical right and English nationalism by Thatcher, followed through the civil wars of the Conservative Party, supported by an extreme right wing press) or the National Front and the Le Penns (easily traceable to the aftermath of the Algerian War and the recuperation of nationalism and post-imperial resentment). Viktor Orban and Jobbik in Hungary are building on the revanchist and revisionist traditions of Greater Hungary (due to loss of territories and populations after WWI), with a good helping of traditional anti-Semitism and a more recent anti-Gypsy hysteria.
One can make a choice whether to ignore these dark sides of the current populist wave by buying into the legitimacy of such an insurgencies, i.e. a simplistic causality that bypasses valid moral arguments in which we used to believe until recently. While not ignoring the need to look at the economic and social factors and coming up with workable solutions to legitimate grievances, that’s is just one part of the picture. But without fully engaging in the cultural warfare and coming up with effective battle plans, they populists will win.
- koen van peteghem Jul 28, 2016
  
  @daniel .. A very accurate pointing out of some basic moves that paved the way... it took Hitler 16 years to get to power. In flanders the populist flemish nationalists has been growing for over 30 years. Getting up to 30% of the voters. and only having been reed in by a softer populist nationalist version. And indeed , i think it is undeniable that successful populists are above all opportunists and very likely narcissistic personalities. As this pathology gives them the gift to connect and tell their supporters exactly what they want to hear...never ever delivering anything afterwards.. just enjoying the power and living out their delusional dreams of grandure...
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Steve Hurst Jul 28, 2016

This is just more of the democracy = good
Unless democracy = populism = bad

Therefore the only good democracy is when it agrees with desired outcomes
- koen van peteghem Jul 31, 2016
  
  @steve
  
  i agree with you on the hollande stand. in a crisis nothing is more damaging that the perception of weakness in a leader. And Hollande is no Churchill... dear me ...
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- Steve Hurst Jul 29, 2016
  
  @koen
  
  Populism as you call it only arises when economic or security failure occurs. It is a demand for action in the face of failure. If you dont want populism you have to act to stop the precursor. You have things in the wrong order. Dellusional elites that disconnect are the danger. It follows that Hollande is more dangerous than Le Pen
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- koen van peteghem Jul 28, 2016
  
  @ steve.. there is no good or bad democracy. the problem with democracy is that is is much more vulnerable than we think it is. the voice of the people lies at its core. the vulnerability of the democracy lies in populism. which has nothing to do with a well informed opinion but all to do with personas manipulating the people. using tactics that are well documented... and that all populist seem to master to the level of art..
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Steve Hurst Jul 28, 2016

There is a gigantic flaw in your fairytale, that is that it is a fairytale

After WW2 the US rejected pleads from Keynes to loan money to the UK leaving the UK facing collapse. The Marshall Plan was only implemented later due to fear of communism sweeping thru Europe

Post WW2 far from being willing to rescue the fair maiden of Liberty, Americas reflex was nearer to being a Rumpelstiltskin and then acted only in self interest

I suggest you select another hero for your narrative

You also gloss over many of the forces currently driving voter reaction in Europe
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stephan Edwards Jul 28, 2016

The markets will fix everything I've heard that before. When are you people going to realize, or more truthfully admit the losers are NEVER compensated or even vaguely helped in your nice globalized world. You are offering vague statements no policies a puff piece for how wonderful the current system is. The only "Fiscal Rules" any government follow is what's good for the rich is good for the country. And everybody reading here knows it.
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