The Threat of Illiberal Populism
Populism, a political ideology built on animus against the ruling establishment, has taken an illiberal turn. Illiberal populists are convincing a growing number of voters that isolationism and strongman-leadership are the ways to protect their countries against the perceived threats of globalization and return their countries to an imagined greatness of the past. They incite hatred against minorities, champion beggar-thy-neighbor economic policies, and seek to circumvent democratic processes.
In Poland, Turkey, and Hungary, leaders are abrogating democratic checks and balances, while the UK Independence Party (UKIP) led Britain to abandon the world’s most successful experiment in regional integration. In his first week in office, US President Donald Trump banned travel from seven Muslim-majority countries to the US, announced expansion of the US nuclear arsenal, threatened Mexico with a 20 percent tariff if it refuses to pay for a border wall, and promised to withdraw 40 percent of US funding to international organizations.
In seeking explanations and solutions to these developments, a look at the political economic context of the rise of the extreme right in the 1930s can be instructive. Just as in 1929, concentrated, deregulated financial institutions led to a global financial crisis in 2008. Economic stagnation and double-digit unemployment figures in Western Europe today are reminiscent of the Great Depression. The euro, like the gold standard of the 1920s and 1930s, has raised living costs in poorer states, contributed to financial crises, and prevented economic recovery through currency devaluation. Economic analyses have demonstrated that protracted economic stagnation in the 1930s was in large part caused by adherence to the gold standard and strongly correlated with the rise of fascism. Considering that the Eurozone gross domestic product per capita is only slightly higher today than in 2007, it is little wonder that illiberal populists are gaining popularity.
The high level of inequality in the West today is rivaled only by that of the late 1920s. As in the interwar period, liberal trade, mechanization, and technological innovation are joining declining unionism and regressive tax policies in putting downward pressure on wages and contributing to unemployment among low-skilled workers. Combined with increasing industry monopolization and tax evasion through profit shifting and off-shore accounts, the gap between the rich and the poor will only continue to grow.
Similar to the interwar period, illiberal populism has risen amid calls to close borders to immigration, accompanied by resurgent racism and nationalism. President Trump’s inflammatory remarks directed at Mexicans and Muslims won him many supporters, and racially motivated violence has spiked in the U.K. after the Brexit vote and in the US following the US presidential election.
But despite these parallels, historical comparisons do not tell the full story. Voter turnout in the West has declined since the 1970s, particularly among the urban youth, the voting group least likely to support illiberal populism. Voters have largely lost identification with political parties and longstanding societal divisions, so populists have been able to whip up rapid electoral support without decades of institutional backing. In the US, political knowledge has barely increased since the 1950s and recent surveys suggest poorly informed voters were a key cause of Trump’s success. In Britain, post-Brexit surveys show the public was misinformed on immigration statistics and UK contributions to the EU.
Today Facebook and Twitter are the primary source of news for many people. This means political opinions are increasingly formed in narrow forums populated with posts by like-minded friends, family, and colleagues. This “echo-chamber” effect is compounded by the prevalence of one-sided news reports, blog posts, and fake news, rather than high-quality journalism. Meanwhile, addictive consumption of videos and computer games may even be undermining critical thinking, creating politically apathetic and uninformed citizens.
The rise of robotic manufacturing and expert computerized systems have contributed to the deterioration of the middle class in the industrialized West. By some estimates, more than half of all U.S. jobs will be replaced by robots in the next two decades and the profits from productivity gains are accruing to the upper one percent of the economic order. The recently impoverished members of the former middle class know that their elected political representatives are beholden to the ultra-rich and are increasingly voting for those who ostensibly oppose these elites.
In order to stop illiberal populism, deep reforms are needed in three areas. First, democracy and pluralism cannot survive indefinitely under economic stagnation, financial instability, and debilitating inequality. The international community needs to break up massive financial conglomerates and crack down on tax havens and profit shifting. The EU must reform the Eurozone urgently. In order to prepare for automation, governments must invest in vocational training, higher education, and job creation, and develop a plan to redistribute the gains that accrue to corporations through technological change.
Second, institutional and political reforms will be necessary to enhance political education and combat alienation of the public from the political process and public elites. Universities that train economists and public servants should emphasize the importance of public engagement and pluralism and encourage students to gain hands-on experience in social work and manual labor. Political systems should involve youth, encourage public engagement in policy and law, and provide greater support for civil society. Political systems should be made more proportional, giving voice to minorities and promoting tolerance
Third, it will be necessary to tackle misinformation on the internet and political disengagement. Governments should encourage financial support for high-quality journalism (for example through a levy on social media giants) and simultaneously reinforce legal checks that insulate the media from political influence. Governments should improve distribution of information necessary for public debate and lay plans to counter fake news. Children should be educated to develop a critical eye for information sources and political education should be made more detailed and reflective.
Populism’s illiberal turn is threatening the foundation of civil liberties and prosperity in the West. Tackling it will require deep reforms at the heart of our education, communications, and political systems. This is no easy task, but the future of pluralist, democratic societies will depend on it.
 Kevin O’Rourke, “Moving on From the Euro,” Project Syndicate, July 22, 2015, https://www.project-syndicate.org/commentary/eurozone-failed-experiment-by-kevin-o-rourke-2015-07?barrier=accessreg.
 Kevin H. O’Rourge and Alan M. Taylor, “Cross of Euros,” Journal of Economic Perspectives 27, no. 3 (2013): 167-192;
Alan de Bromhead, Barry Eichengreen, and Kevin H. O’Rourke, “Right Wing Political Extremism in the Great Depression,” February 2012, eml.berkeley.edu/~eichengr/right_wing_2-17-12.pdf;
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 John Cassidy, “Piketty’s Inequality Story in six Charts,” The New Yorker, March 26, 2014, www.newyorker.com/news/john-cassidy/pikettys-inequality-story-in-six-charts.
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Katie Forster, “Hate crimes soared by 41% after Brexit vote, official figures reveal,” The Independent, October 13, 2016, www.independent.co.uk/news/uk/crime/brexit-hate-crimes-racism-eu-referendum-vote-attacks-increase-police-figures-official-a7358866.html;
Ryan Rifai, “US hate incidents spike after Donald Trump elected,” Aljazeera, November 30, 2016, www.aljazeera.com/news/2016/11/hate-incidents-spike-donald-trump-elected-161130161203648.html.
 Luca Ferrini, “Why is Turnout at Elections Declining Across the Democratic World?” September 27, 2012, www.e-ir.info/2012/09/27/why-is-turnout-at-elections-declining-across-the-democratic-world/;
Aaron Zitner, “Voter Turnout Fell, With Biggest Declines in Urban Areas,” The Wall Street Journal, November 9, 2016, https://www.wsj.com/articles/voter-turnout-fell-with-biggest-declines-in-urban-areas-1478741378;
Ronald F. Inglehart and Pippa Norris, “Trump, Brexit, and the Rise of Populism: Economic Have-Nots and Cultural Backlash,” Harvard Kenedy School, August 2016, https://research.hks.harvard.edu/publications/getFile.aspx?Id=1401.
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 Nina L. Khushcheva, “Donald Trump’s Brave New World,” Project Syndicate, November 15, 2016, https://www.project-syndicate.org/commentary/trump-reality-tv-politics-by-nina-l–khrushcheva-2016-11?barrier=accessreg.
 “Robots could replace almost half of US jobs by 2036,” RT, December, 2016, https://www.rt.com/usa/371544-artificial-intelligence-jobs-economy/.
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