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Populism and the fight for democracy.

Liberal democracy is facing its most perilous time since the rise of fascism a century ago. Between the GFC and now, their number has fallen by a third. Populist authoritarians thrive. What’s happening? And why?

Two visceral emotions drive the affairs of democratic societies: hope and fear. Of the two, the more potent is fear.

It’s what divides the two sides of political life. The method of progressive politics is to exploit the community’s need to feel hope; for conservatives, the way to power is to trade in fear.

Different times favour different sides. When we feel reasonably comfortable and optimistic, hope and its corollary, generosity, become possible. Right now, though, the times favour fear.

The world is waiting for the possible and perhaps likely return of Donald Trump to the US presidency.

He is facing 91 criminal charges. His attorney general, chairman of the joint chiefs of staff, national security adviser and secretaries of both defence and state have proclaimed him unfit for office. The corporate world, traditional Republican supporters, is shying away and donations have plummeted.

But he is the unbackable favourite for the Republican nomination and according to the Real Clear Politics polling averages, Trump is beating Biden by three percentage points.

In western Europe, the Right is resurgent but, as in America, this new Right is different. There’s a scary savagery about them. In France, the far-right National Rally (formerly the National Front) is the most popular party. Its national leader, Marine Le Pen, has steadily risen in popularity and won 41.5% of the vote at the 2022 presidential election against Emanuel Macron. At the next election, in 2027, she could get there. A recent poll by the newspaper Le Monde found that for the first time, more French people believe that National Rally is capable of participating in government than not.

In the Netherlands, November’s election gave Geert Wilders’s far-right Party of Freedom by far the biggest vote: 23.6%, compared with 10.8% in 2021.

In Poland, the centre-right Donald Tusk became Prime Minister, forming a coalition to defeat the far-right PiS incumbents. But PiS remains the biggest party in the Sejm (parliament).

In Germany, the far-right Alternative für Deutschland is polling at 22%, making it the second most popular party.

Italy is being run by a far-right coalition. In Hungary, Viktor Orbán remains secure in his “illiberal democracy”. Even the Nordic countries have elected right-wing governments. Narendra Modi is turning the world’s largest democracy at warp speed into the world’s largest former democracy.

And so on.

Liberal democracy, having ended the twentieth century as the ascendant form of government, is now, in the third decade of the twenty-first, facing a perilous challenge that has not been seen since the rise of fascism in the 1920s. Whether it can survive, and it what form, remains unknown.

It would be foolish to assume any country is immune. That includes us.

Are we still democrats?

There is, of course, a difference between democracy and liberal democracy. Elections alone, even free and fair ones, do not guarantee how a government will behave in office. Liberal democracy provides far more stringent boundaries on power.

A liberal democracy follows a model first developed in the Enlightenment of the late 18th century. It demands the rule of law; separation of powers between the legislature, the courts and the executive; multiple political parties; an open society with freedom of movement; guarantees of basic human rights; private property; a market economy; and universal adult suffrage.

Most of the world’s 195 countries are not liberal democracies and never have been; even at the peak around 2010, only about 40 could be classified that way.

The phenomenon is almost entirely a product of the 20th century. There have been two booms and two busts. The first boom began after the first world war and ended with the rise of fascism; the second, much more substantial, boom after the second world war created the world we now know. But that boom too has ended; the number of confirmed liberal democracies has slumped by 36% from its peak around 2010. Some of those have become borderline liberal democracies; others have turned to authoritarian leaders.

That slump, often called the democratic recession, is marked also by countries outside this list becoming less democratic and less liberal. The Carnegie Endowment for International Peace has identified 27 countries that became less democratic in just seven years, from 2015 to 2022.

Since that report was compiled, some countries (Poland, Brazil) have improved but others (Argentina, Netherlands) have gone the other way.

A global report on the growing dissatisfaction with democracy by public policy analysts at the University of Cambridge found troubling results.

“Across the globe, democracy is in a state of malaise,” they wrote. “In the mid-1990s, a majority of citizens in countries for which we have time-series data – in North America, Latin America, Europe, Africa, the Middle East, Asia and Australasia – were satisfied with the performance of their democracies. Since then, the share of individuals who are ‘dissatisfied’ with democracy has risen by around +10% points, from 47.9 to 57.5%.

“This is the highest level of global dissatisfaction since the start of the series in 1995. After a large increase in civic dissatisfaction in the prior decade, 2019 represents the highest level of democratic discontent on record. While in the 1990s, around two-thirds of the citizens of Europe, North America, Northeast Asia and Australasia felt satisfied with democracy in their countries, today a majority feel dissatisfied …

“Citizens’ levels of dissatisfaction with democracy are largely responsive to objective circumstances and events – economic shocks, corruption scandals, and policy crises. These have an immediately observable effect upon average levels of civic dissatisfaction.”

If we don’t value it, we may lose it. As the song says: you don't know what you've got till it's gone.

Many surveys have tracked levels of support for democracy and have produced very similar results. By rebasing data to 100, this chart shows how attitudes to democracy in five nations changed in the first 20 years of the current century. The western nations are typical, though the United States is an outlier.

The series in the next chart cannot be compared with one another: they show relative trends, not absolutes. It does not mean that three times as many people in Hungary value democracy as in Canada or Australia. But it does mean that many more Hungarians want democratic reform after a long period of increasingly repressive rule.

Support for democracy is closely aligned to confidence in governments. Americans’  decline in trust of government has been happening for a long time, falling most sharply during the Vietnam war. It has never recovered.

Australia’s results are fortunately less discouraging. Although comparative data do not go back as far as in the US, the Australian Elections Study, which surveys voters at each federal election, shows that over 26 years nether measure has dropped below 50% and are both currently at 70%.

Despite these apparently optimistic results, right and far-right populist politics have been active throughout the period in Australia and still are.

John Howard, the most important Australian populist politician of the current era, gained and maintained his power by attacking “elites” – those who, like Paul Keating, advocated a republic, rectification of indigenous disadvantage, involvement with Asia and Asians, and major economic reform.

Howard described himself as the most conservative leader the Liberal Party of Australia ever had. During his 33 years in federal politics, he shaped the party in his own image, much as Menzies had done a generation before. The Liberal Party under Peter Dutton is now a populist right-wing outfit akin to Le Pen’s National Rally, Wilders’s Party for Freedom and the Sweden Democrats.

What is populism and how does it work?

Broad swings to the left and to the right are not new. But this swing is characterised by the type of politician and by their methods. Seldom before have the techniques of meretricious populism been so pervasive or so successful.

But what is it? In the current context, it’s a political technique which seeks to characterise and demonise certain groups – the “elites” and other outsiders – as privileged, corrupt or threatening, and to sharply contrast these elites with the “neglected mass of common people” from whom the politicians wish to derive support.

Perhaps the most widely accepted definition comes from a paper published in 2012 in a political science journal, Government and Opposition:

“All manifestations of populism are based on the moral distinction between ‘the pure people’ and ‘the corrupt elite’. Whereas the former is depicted as a homogeneous and virtuous community, the latter is seen as a homogeneous but pathological entity.”

People and groups characterised as elite often are not very elite at all. Take, for example, targeting of the “black elite” during the Voice campaign and the even more frequent disparagement of “the inner-city elite”. And what about boat people?

Populism is a technique, not a philosophy. It’s a way of retailing fear. As such, it’s more readily utilised by the right than by the left: progressives cannot use fear-based hatred without abandoning who they are.

The number of parties classified as both right-wing and populist have multiplied, in Europe and elsewhere, to such an extent that they now represent a clear and serious threat to liberal democracy. Voter support is surging.

In the most recent elections the far-right won power in Italy, with the Brothers for Italy, the League and Forza Italia holding a combined 230 seats in the 400-member Chamber of Deputies. In the Netherlands, Geert Wilders’s Party for Freedom became the largest party in the House of Representatives with 37 seats.

In Germany, the Alternative for Germany won 10.3% of the vote in the 2021 federal election; it is polling most strongly in the states of former East Germany but is also doing well in the more prosperous west. In recent elections it won 14.6% in Bavaria and 18.4% in Hesse.

Populism and crisis

The populist technique works when the times suit it. A crisis, or at least the sense of one, seems to be an essential ingredient. The fear generated by a troubled time can be turned onto an outsider group to create a powerful and pervasive us-and-them mindset, blaming the privileged or dangerous outsiders and creating a sense of panic to which only the populist leaders have the solution.

In some hands, the technique can be used by authoritarian leaders to subvert an entire country and convert it from liberal democracy into an quasi-fascist personal fiefdom, initially through popular election and then by control of media, by voter suppression, by creating a system of crony capitalism comprising rewarding key supporters, and by discrediting or imprisoning opponents. Trump, Modi, Putin, Orbán, Erdoğan, Berlusconi, Netanyahu, Bolsonaro and Milei are some of the more recent examples.

The archetypical, though extreme, case was of course Adolf Hitler. He used the cascading crises facing the Weimar Republic in the 1920s and early 1930s: economic collapse, war reparations, strikes, and national humiliation after World War 1 – to blame Jews and communists. Finally, the Reichstag fire in 1933 heightened the sense of panic and grievance, and Hitler became chancellor.

In 1923, while he was locked up for insurrection, Hitler compiled a book of helpful hints for any other populists who might follow. “The art of leadership, he wrote in Mein Kampf, “consists in consolidating the attention of the people against a single adversary and taking care that nothing will split up that attention.”

“Populist leaders,” warned Jan-Werner Müller in The Guardian, “are not all nearly as incompetent and irresponsible as Trump and Bolsonaro’s handling of Covid would suggest. Their core characteristic is not that they criticise elites or are angry with the establishment. Rather, what distinguishes them is the claim that they, and only they, represent what they often refer to as the ‘real people’ or the ‘silent majority’.

“At first sight, this might not sound particularly nefarious. And yet this claim has two consequences deeply damaging for democracy: rather obviously, populists assert that all other contenders for office are fundamentally illegitimate. This is never just a matter of disputes about policy, or even about values. Rather, populists allege that their rivals are simply corrupt, or ‘crooked’ characters. More insidiously, the suggestion that there exists a ‘real people’ implies that there are some who are not quite real – figures who just pretend to belong, who might undermine the polity in some form, or who are at best second-rate citizens.

“It is not true that masses of people are longing for strongmen and are turning away from democracy. But it has become easier to fake democracy. That is partly because defenders of democracy have not argued for its basic principles well, and partly because they keep underestimating their adversaries.”

Most seriously, defenders of democracy have been unable to counter the big, repeated lies that are essential components of the populist toolbox. “The broad mass of a nation,” wrote Hitler, “will more easily fall victim to a big lie than to a small one.”

And decades of research have confirmed what he and Joseph Goebbels understood intrinsically: “Repeat a lie often enough and people will eventually come to believe it.” Today’s research psychologists call it “the illusion of truth”.

An elite doesn’t have to be actually elite. A crisis doesn’t have to be real, though it helps if it is. The important thing is that the community must hold a pervasive belief that both are true.

What’s actually true isn’t the point. Facts need not matter: people who want to believe a big lie are impervious to truth.

If fear and resentment are essential selling-points of populism, it follows that the success of its techniques depend on the drivers of those emotions. Populism does not work on a population that feels generally content. It depends on social dislocation, declining standards of living, economic inequality and insecurity. It needs crises. Sometimes, but not usually, those can be manufactured. Real crises, and plenty of them, give opportunist populists the conditions they need to thrive and take charge.

Right now, they have a plethora of cascading crises, real and perceived, to work with: soaring inflation, insecure employment, falling real wages, inequality, climate change and natural disasters, mass migration, housing shortages, war and the fear of war.

Anxieties: inequality

When the wealth of a country is relatively evenly shared across its population, social cohesion can be expected to follow. When a large mass of people feel underprivileged and see another group getting away with the loot, the result is likely to be resentment, social fragmentation and a society ripe for populist demagogues.

The Gini coefficient is a broad measure of relative inequality. A figure of zero indicates complete equality, with everyone getting the same income. A figure of 1 means that one person gets everything.

But as the next chart shows, income inequality in western democracies does not correlate well with populist activity. Of these 16 nations, only the United States – the most unequal – and Italy have a major current problems with anti-democratic populism. Two of the other high-inequality states – Britain and Australia – do not. At least, they do not yet

Conversely, nations where populism is strongest – Hungary, Poland, the Netherlands, Germany – are much more equal: at least, on this measure.

The distribution of inequality follows much the same pattern when we look at the proportion of income going to the top 10%, and to the bottom 50% of national populations. This looks like a poor predictor of vulnerability to populism.

It becomes somewhat clearer when we look instead at the very rich – the top 1%. Here, the United States is again at the top of the list. But the richest in Germany, Hungary and Poland have also secured exceptional levels of economic dominance. But even this measure is a poor predictor.

Perhaps the best explanation for the relative lack of influence that income inequality has on populist activity is that the very rich have both a clear interest in not being targeted as the elite they indeed are, and the means to ensure any blame is directed to others who have less power and less capacity to hit back.

A convincing explanation comes from Martin Wolf, chief economics commentator at the Financial Times, in a new book, The Crisis of Democratic Capitalism.

“How, after all,”  he writes, referring to the US, “does a political party dedicated to the material interests of the top 0.1% of the income distribution win and hold power in a universal suffrage democracy?”

The answer is what Wolf calls “ pluto-populism”.

“This strategy has three elements. The first is to find intellectuals who argue that such policies [favouring the ultra-rich] will lead to a ‘trickle-down’ of wealth to the populace at large. Supply-side economics has been the way to argue this.

“The second element is to foment ethnic and cultural splits among the mass of the population and so, to take the most important example, encourage people to consider themselves ‘white’ or ‘anti-gay’ or ‘Christian’ first and members of the relatively disadvantaged second, third or not at all.

“The third element is to warp the electoral system through vote suppression, gerrymandering and, above all, elimination of restrictions on the use of money in politics.”

Anxieties: rich people feeling poor

You don’t have to be poor to feel poor.

Much depends on how a person’s income compares with those around them. If everyone else has more than you, you’ll feel poor. Almost no one in the countries listed in the following chart is, by developing-world standards, poor. It’s a matter of perception and comparison.

Broadly, these figures echo the charts on inequality: the US is worst – but this chart is a far better predictor of populist unrest. The nations experiencing some of the most rampant populism – the US, Italy, Spain, Greece and Turkey – also have high rates of relative poverty.

But this leaves the question of why some nations with fairly high poverty rates (Sweden, Australia) have fewer problems with populism while others (Hungary, the Netherlands, Poland) have much less. The answer, of course, is that many other factors are at work.

One of those is the way cost of living affects people who are not poor but who perceive that their living standards are slipping. Brazil, Hungary and Chile are among those in which inflation has taken the greatest toll on personal wealth. In most developed western economies, though, the sharp rise in inflation is a recent phenomenon, partly a result of supply-chain disruptions of the war in Ukraine and the China slowdown, and partly due to massive fiscal stimulus during the pandemic which was designed to keep firms in business and workers employed. All that money is now boosting demand at a time when supply is restricted. Inevitably, prices have risen.

Even these cases are not the worst. For that, consider Turkey.

Over the longer term, though, incomes in most countries have outpaced inflation. Only recently has that not been the case.

Data on disposable income is a way of showing, at least in the aggregate, how much people have to spend or save after taxes and inflation are taken into account. Generally, disposable income, and therefore living standards, have improved consistently across most western economies over the past 15 years, with the exception of Italy. There, the downturn was the result of the post-GFC rout in the southern member countries of the Eurozone (the PIGS – Portugal, Italy, Greece and Spain) whose indebted economies needed currency devaluation which could not happen because they had unwisely given up monetary sovereignty to join the Euro.

In most countries, the recent economic downturn has been, by the measures of the past, mild. But its impact on perceptions has been anything but.

Consumer confidence is far more volatile than incomes data: there have been two major downturns in the past 15 years. But it’s hard to find justification for the recent slump in the aggregate data: but confidence is about perceptions, which often bear only a tangential relationship to reality.

The experience of a minority of people who are indeed experiencing a cost-of-living squeeze has come to shape the perceptions of entire nations. The failure of journalists and commentators to point out the difference between aggregate macroeconomic data, and the experience of a limited group, has produced this detachment from reality. “Doing it tough” is the cliché of the moment, and anyone who suggests the overall economy is actually doing quite well is derided.

Michele Bullock, the new governor of Australia’s Reserve Bank, found this when she spoke off-the-cuff to a forum in Hong Kong.

“We have, like other countries, raised interest rates much more quickly than we have in the past and that has created in fact a lot of political noise and a lot of noise from the general public,” Ms Bullock told the conference.

“Despite that noise, households and businesses in Australia are actually in a pretty good position. Their balance sheets are pretty good,” she said.

“She said WHAT? Australia's Reserve Bank governor slammed for tone-deaf comments while on overseas trip,” roared the Daily Mail headline.

“The Reserve Bank chief has been slammed for telling an international conference frustration over interest rate hikes was just ‘noise’, it said. The story helpfully pointed out that “Michele Bullock … earns more than $1 million a year.”

She was, as a macroeconomist, speaking of the aggregate. Overall, that statement is true. It’s also a bit tin-eared, because nobody lives in the aggregate. We all have our own stories and, at the moment, people with mortgages, and many renters, are finding life difficult. For them, there is certainly a cost-of-living crisis. And constant reporting of these difficulties has led the entire country to believe the crisis is general. It’s not, but you can’t say that.

There’s a similar situation in most western countries. And that’s one of the problems with most of these figures: they don’t tell the whole story.

Anxieties: housing

People who own their own dwellings, or who can afford the costs imposed by rising interest rates and shortages of supply, are relatively unaffected by the current international housing “crisis”. For those on lower incomes, who rent or who are paying off large mortgages, it’s a different story. Again, it’s the second group, not the first, which is driving perceptions and, in turn, providing opportunities for populist mischief.

Interest rates, though not unduly high by historical standards, are higher than they have been in recent years. The current unusually sharp increase in rates follows an extraordinary period in which rates fell to extraordinary depths and, in some cases, to below zero. People who based their financial plans on such rates persisting have been, unsurprisingly, pummelled.

There’s little enough in these data to justify the current international panic and sense of crisis. But the real experience of some, driving general perceptions, greatly assists, populist opportunists like Trump, Le Pen, Wilders and Dutton.

Housing affordability has declined in most western countries, with prices outstripping incomes. But when we look at trends over the past two decades, this does not represent an extraordinary peak. Canada is an exception, with affordability going from a low point (70 on the OECD index) in the first years of the present century to an unusually high level (140) now.

The recent worsening of affordability is undoubtedly significant for many and serious for some. But it does not help to explain why there is now so much more populist political activity now than there was 20 years ago.

Anxieties: climate and disasters

In a perverse way, the forces which have promoted climate denial, and which continue to derive huge profits from fossil fuels, are also likely to benefit from the generalised sense of anxiety and fear caused by climate-induced disasters.

An analysis of Google data commissioned by the BBC found that searches in English around “climate anxiety” in the first ten months of 2023 are 27 times higher than the same period in 2017. Searches have risen by 73 times in Portuguese, by eight-and-a-half times in Chinese and by a fifth in Arabic. Overall, Finland, Sweden, Denmark and Norway accounted for more than 40% of all “climate anxiety” searches.

This anxiety has been sharpened over 2023 by a series of climate-related disasters on all continents that indicate a tipping-point in the Earth’s liveability. But the concern is not new: it’s just that powerful forces in control of governments in apparently democratic states have prevented action being taken on the issues their populations demand.

A 2021 survey analysis published in The Lancet Planetary Health found deep levels of disappointment with the actions of governments across a variety of developed nations. Brazil, then under Bolsonaro, and Australia, then under Morrison, showed very high levels of disaffection. But even in Finland, twice as many people were unsatisfied as satisfied.

“Defence mechanisms against the anxiety provoked by climate change have been well documented,” the researchers wrote, “including dismissing, ignoring, disavowing, rationalising, and negating the experiences of others.

“These behaviours, when exhibited by adults and governments, could be seen as leading to a culture of uncare. Thus, climate anxiety in children and young people should not be seen as simply caused by ecological disaster, it is also correlated with more powerful others (in this case, governments) failing to act on the threats being faced.”

Those “powerful others” – and the term is not restricted to governments but applies even more to those with effective control over governments – will not go away. They will continue to seek, and often to succeed, in diverting blame from those who are responsible for our problems onto those who are not. For instance, onto immigrants.

Anxieties: immigration

Few issues provide such rich fodder for populists as unregulated migration. The fear of the outsider, the fear of being overrun by hordes of newcomers, and plain racism all play a part. Populists routinely play up legitimate concerns to create a perception of crisis, and then offer themselves as having the only solution.

Their simple, superficially plausible remedies are often brutal but seldom successful. As HL Mencken famously said: “For every complex problem there is an answer that is clear, simple and wrong.”

That is not to say there’s nothing to worry about. Very high levels of immigration by people from a different culture, and who have often been traumatised by violence and repression, can cause social disruption. Generally, though, developed western countries have not had to deal with the large mass of displaced people.

More people worldwide are fleeing repression, war, dire poverty and starvation than at any time since the second world war. As climate change bites deeper, we can expect more and bigger waves of mass migration. Some of those will attempt to reach the rich countries of the west; relatively few will achieve that goal.

According to the UN refugee agency, a cumulative total of 108.4 million people have been  forcibly displaced and remain in need of protection. Most – a cumulative 62.5 million – remain in their countries of origin as internally displaced persons. And in 2022, a peak year, over 10 million people tried to find places of safety outside their own countries.

The large majority remained within their regions or origin. Rich countries host just over a third of refugees and asylum seekers; the rest remain in nations that are poor or very poor, and much less able to cope with the influx.