The Statesman’s Yearbook Online

edited by Dr Barry Turner



Barry Turner investigates the wave of populism sweeping the world

An indelible image of last year’s campaign to take Britain out of the European Union is of a middle-aged woman, draped in an English flag, her fist raised, spitting venom. Another image comes to mind of a man somewhere in Vienna, screaming abuse as he brings down a heavy stick on the head of an elderly Jew.

The two snapshots are set apart by close on a century but the emotions they represent are eternal, forever bubbling away beneath the veneer of civilization. When they break the surface it can be like a volcanic eruption.

It happened in the 1930s. An international economy in tatters gave expression to a vicious backlash against those who were supposedly responsible for the social breakdown. The result was an orgy of destruction. Are we heading for a reprise? No one has yet suggested that a third world war is in prospect. But there are disturbing similarities between then and now.

The revival of primitive nationalism and bigotry released by the American presidential election, the British referendum on Europe and the electoral advances of the far right wherever migrants threaten the status quo, will not easily subside. At the time of writing, we still have the French presidential election and the German federal election to deliver more shocks to the system.

The genesis of the current discontent springs from those who, often through no fault of their own, have missed out on life’s chances. So much is common knowledge. What is surprising is that the shock to the body politic was not more widely anticipated. This in large part was because the political establishment on both sides of the Atlantic convinced itself that it could meet the challenges of modernity by simply tinkering with the system. The ‘Third Way’ politics of the 1990s and 2000s led by Bill Clinton, Tony Blair and other leaders of the centre and centre-right kept faith with the dynamism of the Reagan–Thatcher reforms while promising to take care of those left behind. It didn’t happen.

A fast-growing sense of disconnect that started in the lower ranks of a labour market battered by job-stealing technology soon spread to the more assertive and vocal sectors of the working and middle classes threatened by globalization, the free movement of labour and a brand of capitalism wedded uncompromisingly to the bottom line.

We must surely acknowledge that the promise of economic expansion and the prediction of ever-rising living standards no longer have selling power. And with some reason. The pace of change is frightening for those who are accustomed to think of themselves as indispensible cogs in the wheel. While there is some comfort in knowing that the latest industrial revolution, like its 19th-century predecessor, has created new jobs to replace those lost to machinery, they have been generally less rewarding financially and less satisfying in terms of accomplishment. Part-time or short-term employment is not yet the norm but that is where we are heading.

However, it is not all doom and gloom. We live longer and healthier lives made richer by freedom of choice. Who would not recognize the tangible benefits of easier working conditions, longer holidays, labour-saving devices in the home, fresh food and smarter cars?

But all this is now taken for granted. What impinges on the public mind is a failing infrastructure with its traffic jams, overcrowded railways and chaotic airports. Joyless impressions extend to the barbaric treatment of old people unable to cope, of food banks, the homeless and beggars on the street, of hospital waiting lists and the neglect of the mentally ill, of the loneliness and poverty of many one-parent families. The sense of everything getting worse is magnified by terrorist atrocities that defy explanation or prevention while overall there is the perception of a self-regarding and self-perpetuating elite, indifferent to the troubles of the wider world.

Popular perceptions are reinforced by ignorance. Democracy works best when subjective political opinion is supported by evidence and informed argument. Fed by social media, recent hustings have been typified by an onslaught of outrageous propaganda and downright lies. For the demagogues and their media backers, feelings come before facts. What you feel, however illogical or unlikely, must be true. No less that 80 per cent of those who voted for Donald Trump think life has grown worse in the past 50 years. To put it into perspective, that was the period when six million American households did not have flushing lavatories. The UK was even worse off. Yet, among Britons who voted to leave the European Union, 61 per cent believe that most children will have less than their parents. Hence the irrational fear of outsiders, those who do not share the background, traditions and habits of the dominant caste.

What of the progress made towards abolishing world poverty and ignorance? To advance from 1820 when 94 per cent of humanity lived on less than $2 a day in modern money to 1990 when the figure was 37 per cent to 2015 when it fell to 10 per cent is no mean achievement. The graph for literacy is equally impressive. Two hundred years ago 12 per cent of the world’s population could read and write. The global literacy rate increased from around 21 per cent in 1900 to almost 40 per cent in 1950 to 86 per cent in 2015. Poor countries used to have only one-eighth of the literacy level of rich countries; now it is half.1 But these amazing facts are seldom celebrated. Comes the familiar refrain, if others are doing better, we must be doing worse. Nonsense it may be but argued passionately by soapbox orators it can be persuasive nonsense.

What is undeniable is that the advanced economies have been slow to adapt to a more highly competitive world and slower still to secure an equitable distribution of the benefits of growth.

Material progress in the 20th century was at its peak in the period 1948 to 1970 when real incomes across the board increased at more than twice the rate of the previous half century. In America it was a golden age for millions of high school graduates who ‘without a college education could work steadily at a unionized job and make an income high enough to afford a suburban home with a back yard, one or two cars, and a lifestyle of which median income earners in most other countries could only dream’.2 And dream we did. Europe lagged behind but not so far as to dent the belief that before long the living standards enjoyed by our American cousins would soon come our way.

Optimism was not universal. As ever, the economically and socially entrenched were hostile to change. Typical of a wider tendency was the reaction in France to the explosive economic growth of the post-war quarter century, known as Les Trente Glorieuses. Discontent found expression in Poujadism, a movement founded by Pierre Poujade, an anti-intellectual and anti-modernizer, to represent small shopkeepers and craftsmen in their struggle to fend off new ideas. In 1956, Poujade won 52 seats in the National Assembly allowing him to become a power broker in the Fourth Republic. His star faded when de Gaulle came to power but it was rising prosperity softening the impact of change that really did for Poujade.

The contrast with recent outbreaks of Poujadism in a different guise is stark. Despite the political promises and optimistic projections, growth in the developed economies, except in social media, has bypassed the majority. As economist and historian Robert J. Gordon has shown, in the period 1948–72 American incomes grew at roughly the same rate across the social spectrum. All that changed in the 1970s. A giant gap opened up between the growth of real income for the bottom 90 per cent and that of the top 10 per cent.3

The pattern is much the same in Europe and across the Western world. Some 65 per cent to 70 per cent of households in rich countries saw their real incomes from wages and capital stagnate or decline between 2004 and 2014.4 It is here that the root cause of the present discontent is to be found. ‘Rising prosperity reconciles people to economic and social disruption,’ writes Martin Wolf. ‘Its absence foments rage.’5

To return to the core question, will history repeat itself? Can we expect the rash of nationalist populism to scar the body politic as deeply as it did in the 1930s?

In a classic analysis of the electoral base for National Socialism, Barrington Moore has identified the resentments that nourished the Nazi movement as ‘those of the “little man” angry at the injustices of a social order that threatened or failed to reward the virtues of hard work and self-denial’.6 Among the disaffected were shopkeepers and small businesses threatened by mail-order houses (today it would be the supermarkets and the ubiquitous Amazon, Google and Uber), small property owners struggling to meet their mortgages and the skilled self-employed displaced by machinery.

These groups alone did not have the muscle to raise Hitler and Mussolini on to their pedestals but they were strong enough to attract to the fascist cause others with real or imagined grievances against the state. And not just in Europe. While fascism ‘reached its most virulently destructive form in Germany … it was a worldwide phenomenon’.7

The social dislocation today may not be quite so widespread but it is serious enough to have worldwide consequences. A fear of globalization and a return to protectionism as a false remedy for unemployment and under-employment, while doing nothing to solve the crisis, may well undermine the very foundations of the democratic state. There comes the point when the despair of individual powerlessness and inability to cope with a world that seems oppressive and hostile creates a demand for a strong leader, a single, supreme authority to restore order and decency. It has already happened in Russia and there are fears that Turkey is going the same way. How long will it be before violence against scapegoats is legitimized? Think only of the threats made on the American presidential trail.

Futurology is not a precise science and predictions are made to be proved false. It may be that we are heading for another productivity revolution. In recent years, IT companies have focused on things that are more ‘fun than fundamental’, to quote Paul Krugman. A forecast of developments that will make a material difference, like driverless cars, cannot be ruled out. But to take the world as it is, the parallels between the 1930s and now are too close to ignore.

To put our society back into balance, the virtues of an open economy need to be more vigorously proclaimed, the abuse of capitalism confronted and the benefits more evenly distributed. Sadly, in neither America nor Europe is there a political party of note with a programme that measures up to these tenets. Instead, voters are bored rigid by a seemingly perpetual bout between the traditional mindsets of left and right, debating policies that were outmoded half a century ago.

Establishment politicians who might be credited with more sense, lean towards old-fashioned protectionism as a vote-winner while rarely acknowledging what they know to be true—that protecting jobs by cutting out foreign competition will merely produce a smaller economic cake to be distributed in yet smaller pieces. Whatever decisions are made in Trump’s White House, we can at least be sure that large scale manufacturing will not return to America.

A recent study from the University of California and Columbia University concludes that the poorest 10 per cent of consumers, who buy more imported goods than the well off, would lose 63 per cent of their spending power if borders were closed to trade. High earners would lose just 28 per cent of their purchasing power. If Trump does what he has promised to do, his electoral base will soon be disillusioned.

If putting up the barriers to trade, capital and people will do nothing to cure the ills of society, what is the constructive alternative? Much could be achieved by generously funded back-to-work programmes for those who have lost out to innovation and competition. There must be scope to carve out new career paths in areas of social concern such as the environment and support services for those in the community who have been sidelined to short-funded charities.

Education has a big role but not just in imparting job-related skills that may well be superseded by technology in the years ahead. The lessons of life should be about broadening the scope of human endeavour to embrace creative leisure and the readiness to seek out opportunities for fulfilment that go beyond the narrow confines of the workspace.

The open society thrives on competition but for competition to deliver on its promises those on the lower rungs of the ladder must believe that ability and application will take them to a level where they can look back and be proud of their ascent.

Reform comes at a high price. It is a political mantra that taxation is now at a level where a substantial increase will lead to counter-productive damage to the work ethic and reduce state revenue. But the argument rests on the assumption that the current structure of taxation is fixed for all time. This is simply not true. The gap between the poor and rich has been widened by stunted earnings on one side and capital growth on the other. A remedy is to close the accounting loopholes that allow for tax evasion and avoidance (the distinction is not at all clear) on a massive scale, to clamp down on crony capitalism and to shift the tax burden from income to wealth accumulation. It will take great political courage to promote such a ground-breaking programme but the alternative—to leave things as they are and to hope for the best—will only serve to bring the apocalypse closer.

Barry Turner

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See also


1Johan Norberg, Progress. Ten Reasons to Look Forward to the Future, 2016
2Robert J. Gordon, The Rise and Fall of American Growth, 2016; p. 609
3Ibid; p. 609
4The Economist, 30.7.16
5Financial Times, 20.7.16
6Barrington Moore, Jr, Injustice: The Social Bases of Obedience and Revolt, 1978; p. 406
7Ibid; p. 413