Disentangle Populism - On the brink of the next populist surge?

The Solution

After the uprising of the 17th of June
The Secretary of the Writers’ Union
Had leaflets distributed on the Stalinallee
Which stated that the people
Had squandered the confidence of the government
And could only win it back
By redoubled work. Would it not in that case
Be simpler for the government
To dissolve the people
And elect another?

Bertolt Brecht, 1953

Quoting this poem by Bertolt Brecht in his keynote at the Berlin Summit, when he so carefully dissected the conference title “Winning back the people”, Adam Tooze argued that referring to “the people” – or as Hillary Clinton called them: deplorables – instead of certain classes, groups, or individuals, resembles Brecht’s satirical solution to simply dissolve the inconvenient. Populists do not seem to vanish into thin air, however. On the contrary, they have gained popularity almost everywhere over the past ten years and mistrust in established democratic institutions has risen sharply, be it in the US, the UK, Italy or France. Now the next wave is looming: whether with the possible re-election of Donald Trump in November – or even before that in the EU and in East Germany.

To stop this trend of growing resentment and mistrust, it is important to find out what its drivers are. Successful treatment must be preceded by a correct diagnosis. Otherwise, one risks treating the symptoms only. Accordingly, leading researchers on populism discussed causes of increasing discontent at the panel Disentangle Populism – On the brink of the next populist surge.

One well-known explanation concentrates on globalization and trade for explaining populist votes – mostly in the US but partly in Europe as well. The story is that after global trade picks up pace in the 80s and 90s, it accelerates even more after China’s accession to the World Trade Organization in 2001. According to the market-liberal paradigm, this so-called China shock should not have an effect on (assumed to be) flexible labour markets in the US, which would absorb any job losses. But things turned out differently, as the trade shock came with substantial adjustment costs and distributional consequences both at the regional and the individual level: short-term unemployment turned into long-term unemployment, and other bad social outcomes followed: downward mobility, broken roads, increasing crime rates, deaths of despair. With a direct link to Trump’s success in important swing states, such as Michigan, Pennsylvania, and Wisconsin. While the situation in Germany was different, as it profited from China’s large export market and the Eastern European integration in the single market, other European countries like Italy were much harder hit. If the diagnosis that globalization and trade shocks lead to populism is correct, then protectionist measures in the spirit of Biden’s recent tariffs seems to be the right prescription. At the same time, high costs of a fragmented world warrant a targeted and balanced approach.

One pressing question in the context of populism is whether psychological/cultural or economic factors are more decisive. Trying to incorporate the two, one discussant underlined the interconnected relationship between economic and psychological drivers of populism based on qualitative research in four European countries (France, Germany, Poland, and Italy). While a clear definition of populism is often lacking, most notions include a feeling of being left behind, be it socially or economically. This feeling is often coupled with a perceived drop in status. Well-being is fragile and on the decline (e.g. rust belt after the China shock) or potentially on decline, and political elites are held accountable for it. This phenomenon, best described by the term nostalgic deprivation, is a feeling in front of a socio-economic reality. Based on her research on US election results in swing states, another discussant emphasised the role of not absolute economic insecurity but relative to the past. Not necessarily the poorest vote right wing, but the ones on the decline.

Moreover, economic anxiety is often embedded in deeper and broader human experience, including personal aspirations (that have often been disappointed). This resonates well with the work by Oliver Nachtwey and Carolin Amlinger who explain the rise of libertarian authoritarianism with “offended freedom”. Based on interviews with supporters of the AfD, or participants of coronavirus demonstrations, they carve out this reified idea of freedom, understood less as a right and more as a possession. A freedom that is jeopardised in times of polycrises and major transformations.

Given that economic insecurity and anxiety account (at least to some extent) for the rise in populist votes, trust becomes a crucial part of the equation. The idea of (mis)trust also helps explaining why even successful economic policies might have limited effects only. Once trust is lost, it is hard to regain. Two factors may amplify the deep and long-lasting feeling of mistrust. First, an uncertain and less predictable environment with profound structural changes ahead (green and digital transitions). Second, the (perceived) positive performance of populists in power. As one discussant pointed out, the danger is that there is nothing to prevent populists from having good economic policies. The asymmetry between negative and positive economic shocks and policies raises the bar for regaining trust. This could also be reinforced by an attribution bias, where individuals attribute negative outcomes to policy or bad luck while taking credit for positive ones, Stefanie Stantcheva’s research for inflation shows.

Psychologically, nostalgia for the past paired with mistrust for future triggers populist voters’ discontent. Another central emotion populism as political strategy capitalises on to win elections is anger. How could a counterstrategy look like? It was pointed out in the discussion that winning elections does not always go hand in hand with implementing the best policies (good governance). If mission-oriented industrial policy is the counterstrategy against populism, this raises the question whether the mission (green transition) is well aligned with the populations’ preferences, where economic factors such as cost of living, migration, or health care seem to rank before climate and the environment (see as example recent YouGov polls in the UK). Another point to consider, especially in majority voting systems, is the question of possible alternatives, which can also affect participation. Low levels of voter turnout may be a sign for inadequate representation of voter’s interests.

The discussion on the drivers of populism made clear that psychological explanations, such as nostalgia, mistrust and the feeling of being left behind, have to be embedded in a specific socio-economic context of economic insecurity and anxiety. As was also stressed by a number of participants, this does not mean that other factors, such as anti-immigrant sentiment, are not important. It rather means that with targeted economic policies in place Brecht’s solution to dissolve “the people” becomes obsolete.