The underlying mistake here is to believe that the EU is everything that is good – sugar and spice – therefore the correct response to anything puppy dog tales like populism must be more EU. The concept that perhaps there’s actually something wrong with the EU is BadThink and therefore cannot even be thought. The idea that greater decarbonisation will see off the National Front is particularly cute.
Populism: Roots, consequences, and counter strategy
Karl Aiginger 20 April 2019
Populism represents a challenge to liberal democracy, pluralism, human rights, and the exchange of ideas. This column examines the features and drivers of populism, as well as the potential strategic response by the EU and its member states. This includes a vision for Europe to become the role model for high-income societies providing well-being, lower unemployment, and less inequality, and a leader in decarbonisation and public sector management.
Populism is not easy to define, but its effects are visible when it challenges liberal democracy, pluralism, human rights, and the exchange of ideas. In the upcoming European elections, populist parties may acquire influence in shaping Europe. They call for a halt to enlargement to prevent migration, the end of the euro, and the exit from international humanitarian or climate compacts.
Three features and one turbo
The first feature of populism is the oversimplified and pessimistic interpretation of the problems of a society, used as an instrument for gaining political influence. The second is the polarisation between the large group of ordinary, virtuous citizens and the corrupt, self-serving economic or cultural minority dominating the society. The third is to declare pluralism, globalisation, and multilateralism to be negative, since these endanger the homogeneity of people and nations are deprived of their right to solve their problems as their own people see fit. The fear of migration of unqualified people from distant countries importing non-Christian religions is a turbo for today’s populism, while the emancipative feature of former left-wing populists is absent.
Populism is found empirically to have four interrelated root causes (Fukuyama 2018, Guriev 2018, Mudde and Kaltwasser 2018). Its economic roots are stagnating incomes, unemployment and – personal as well as regional – inequalities. Its cultural root is the increasing dominance of liberal values (such as gender equality and new lifestyles); populists make conservative values acceptable again. The third cause is fear and uncertainty. These are a consequence of any quick change, whether it be economic, cultural, or technological. Policy failures are a fourth cause; if the losers of structural and technological changes or globalisation are neither compensated nor assisted, they lose faith in institutions.
Socioeconomic evidence on voting
Populist parties are attractive for two groups: low-income segments (but not necessarily those with the lowest incomes) and the middle class (typically with apprenticeship training). Populist voting decreases with rising income and higher education. As partial collateral of this, the voting share for populist candidates is high among blue-collar and low-skilled workers in manufacturing, as well as among older people and men and in rural areas. Interestingly, regional voting shares decrease with a higher share of migrants and when people have personal experience with migrants.
The track to power and its stabilisation
Populist parties first enter coalitions, usually with a conservative mainstream party. In government, these coalitions shift the agenda. If, finally, the chosen policy instruments aggravate economic problems, external enemies are invented that supposedly prevent expected success (from George Soros to immigrants and centralists in Brussels). Voting procedures are changed, ‘strongmen’ eliminate constitutional checks and balances and increase their influence on the judiciary system and media, and European rules are neglected. Since an exit from the EU does not get a majority, radical and unrealistic reforms of the EU are demanded, with a threat to exit if the EU does not change its governance accordingly. Renationalisation of policy is demanded, even for issues that evidently cannot be solved by individual countries – such as crime, speculation, tax fraud, or climate change.
A stronger role for populist parties in government weakens the role of Europe in shaping trade and investment compacts, as well as globalisation (Rodrik 2017). China uses this weakness to expand the Silk Road and to buy infrastructure in Africa as well as in Southern Europe. In Europe, the split between the East and the West widens. Right and left populists are keen to cooperate with Russia, endangering peace efforts in the Western Balkans.
Mainstream parties often go for ‘populism light’ – a populist agenda that is only a little less radical and xenophobic. But then economic problems worsen due trade restrictions, and uncertainty and pessimism rise.
The alternative starts with correcting the wrong framing (Aiginger 2019). Economic problems in the EU exist, but in general well-being is higher and poverty lower than 30 years ago. Life expectancy is increasing, in contrast to the US. The EU has brought peace to a conflict-ridden continent.
Second, the EU and its member countries need a new strategy for governance, migration, and ageing. The members should agree what can be done better in a joint effort. Special emphasis has to be given to the problems of ageing. The population in Africa will quadruple in this century, while the share of people aged between 20 and 30 will decrease by a third or will even halve in Southern and Eastern Europe (Rodriguez-Pose 2018). Migration needs a policy mix – on the one hand, attracting qualified migrants plus training and integrating humanitarian refugees; on the other, devising a strategy for investment, education, and governance in Africa. This is very different to the instruments proposed by populists.
The third step is a vision for 2050. Europe should become the role model for a high-income society providing well-being, lower unemployment, and less inequality, leading in decarbonisation and public sector management. Innovations have to be driven by societal goals and not focus merely on labour productivity. This implies shifting taxes from labour to energy. Unemployment cannot be financed by lifelong social payments but has to be prevented ex ante by empowering young people to take on change in technologies.
Last but not least, the EU has to reconnect with citizens, who should support the European project not only intellectually, but with empathy. This requires a narrative of why European integration is welfare-enhancing: “A Europe that empowers and increases life choices“.