Explaining The Populist Revolt
In
many Western democracies, this is a year of revolt against elites. The
success of the Brexit campaign in Britain, Donald Trump’s unexpected
capture of the Republican Party in the United States, and populist
parties’ success in Germany and elsewhere strike many as heralding the
end of an era. As Financial Times columnist Philip Stephens put it,
“the present global order – the liberal rules-based system established
in 1945 and expanded after the end of the Cold War – is under
unprecedented strain. Globalization is in retreat.”
In fact, it may be premature to draw such broad conclusions.
Some
economists attribute the current surge of populism to the
“hyper-globalization” of the 1990s, with liberalization of international
financial flows and the creation of the World Trade Organization – and
particularly China’s WTO accession in 2001 – receiving the most
attention. According to one study,
Chinese imports eliminated nearly one million US manufacturing jobs
from 1999 to 2011; including suppliers and related industries brings the
losses to 2.4 million.
As the Nobel laureate economist Angus Deaton argues,
“what is crazy is that some of the opponents of globalization forget
that a billion people have come out of poverty largely because of
globalization.” Even so, he adds that economists have a moral
responsibility to stop ignoring those left behind. Slow growth and
increased inequality add fuel to the political fire.
But
we should be wary of attributing populism solely to economic distress.
Polish voters elected a populist government despite benefiting from one
of Europe’s highest rates of economic growth, while Canada seems to have
been immune in 2016 to the anti-establishment mood roiling its large
neighbor.
In a careful study of
rising support for populist parties in Europe, the political scientists
Ronald Inglehart of the University of Michigan and Pippa Norris of
Harvard found that economic insecurity in the face of workforce changes
in post-industrial societies explained less than cultural backlash. In
other words, support for populism is a reaction by once predominant
sectors of the population to changes in values that threaten their
status. “The silent revolution of the 1970s appears to have spawned an
angry and resentful counter-revolutionary backlash today,” Inglehart and
Norris conclude.
In
the US, polls show that Trump’s supporters are skewed toward older,
less-educated white males. Young people, women, and minorities are
under-represented in his coalition. More than 40% of the electorate
backs Trump, but with low unemployment nationally, only a small part of
that can be explained primarily by his support in economically depressed
areas.
On the contrary, in America, too, there is more to the resurgence of populism than just economics. A YouGov poll commissioned by The Economist found
strong racial resentment among supporters of Trump, whose use of the
“birther” issue (questioning the validity of the birth certificate of
Barack Obama, America’s first black president) helped put him on the
path to his current campaign. And opposition to immigration, including
the idea of building a wall and making Mexico pay for it, was an early
plank in his nativist platform.
And yet a recent Pew survey shows growing pro-immigrant
sentiment in the US, with 51% of adults saying that newcomers
strengthen the country, while 41% believe they are a burden, down from
50% in mid-2010, when the effects of the Great Recession were still
acutely felt. In Europe, by contrast, sudden large influxes of political
and economic refugees from the Middle East and Africa have had stronger
political effects, with many experts speculating that Brexit was more
about migration to Britain than about bureaucracy in Brussels.
Antipathy toward elites can be caused by both economic and cultural resentments. The New York Times identified a
major indicator of Trump-leaning districts: a white-majority
working-class population whose livelihoods had been negatively affected
throughout the decades in which the US economy shed manufacturing
capacity. But even if there had been no economic globalization, cultural
and demographic change would have created some degree of populism.
But
it is an overstatement to say that the 2016 election highlights an
isolationist trend that will end the era of globalization. Instead,
policy elites who support globalization and an open economy will have to
be seen to be addressing economic inequality and adjustment assistance
for those disrupted by change. Policies that stimulate growth, such as
infrastructure investment, will also be important.
Europe
may differ because of heightened resistance to immigration, but it
would be a mistake to read too much about long-term trends in American
public opinion from the heated rhetoric of this year’s election
campaign. While the prospects for elaborate new trade agreements have
suffered, the information revolution has strengthened global supply
chains and, unlike in the 1930s (or even the 1980s), there has not been a
reversion to protectionism.
In fact, the US economy has increased its dependence on international trade. According to World Bank data,
from 1995 to 2015, merchandise trade as a percentage of total GDP has
increased by 4.8 percentage points. Moreover, in the age of the
Internet, the transnational digital economy’s contribution to GDP is rapidly increasing.
In
2014, the US exported $400 billion in information and communication
technologies (ICT)-enabled services – almost half of all US services
exports. And a poll released last month by
the Chicago Council on Foreign Relations found 65% of Americans
agreeing that globalization is mostly good for the US, while 59% say
that international trade is good for the country, with even stronger
support among the young.
So,
while 2016 may be the year of populism in politics, it does not follow
that “isolationism” is an accurate description of current American
attitudes toward the world. Indeed, in crucial respects – namely, on the
issues of immigration and trade – Trump’s rhetoric appears to be out of
step with most voters’ sentiments.
Copyright: Project Syndicate 2016 Putting The Populist Revolt In Its Place