CAMBRIDGE – Perhaps the only surprising thing about the populist backlash that has overwhelmed the politics of many advanced democracies is that it has taken so long. Even two decades ago, it was easy to predict that mainstream politicians’ unwillingness to offer remedies for the insecurities and inequalities of our hyper-globalized age would create political space for demagogues with easy solutions. Back then, it was Ross Perot and Patrick Buchanan; today it is Donald Trump, Marine Le Pen, and sundry others.
History never quite repeats itself, but its lessons are important nonetheless. We should recall that the first era of globalization, which reached its peak in the decades before World War I, eventually produced an even more severe political backlash.
The historical evidence has been well summarized by my Harvard colleague Jeffry Frieden. In the heyday of the gold standard, Frieden argues, mainstream political actors had to downplay social reform and national identity because they gave priority to international economic ties. The response took one of two fatal forms in the interwar period: Socialists and communists chose social reform, while fascists chose national assertion. Both paths led away from globalization to economic closure (and far worse).
Today’s backlash most likely will not go quite so far. As costly as they have been, the dislocations of the great recession and the euro crisis pale in significance compared to those of the Great Depression. Advanced democracies have built – and retain (despite recent setbacks) – extensive social safety nets in the form of unemployment insurance, retirement pensions, and family benefits. The world economy now has functional international institutions – such as the International Monetary Fund and the World Trade Organization (WTO) – that it lacked prior to the Second World War. Last but not least, extremist political movements such as fascism and communism have been largely discredited.