Populism: A global menace

Emilio Ocampo (April 5, 2018)

In an article written a year ago, Peruvian writer, erstwhile politician and Nobel Prize winner Mario Vargas Llosa argued that the main threat to the survival of liberal democracies was no longer communism but populism. In his view, the former rendered itself innocuous by its demonstrated inability to resolve the most elementary economic and social problems. Instead of being a frontal, ruthless and murderous assault on democracy, populism corrodes its foundations from within and gradually evolves into an authoritarian regime (oftentimes disguised in democratic garb and supported by crony capitalism). The means are different but the end result differs only in a matter of degrees. In both cases, it is the loss of individual freedom and everything associated with it. Venezuela today does not differ much from Cuba.

Crowd Rallies for Juan Peron Speech

Recent events suggest that this threat is growing. After wreaking havoc in Latin America for decades –most recently and strikingly in Venezuela– in 2016 populism made its big entrance in the advanced democracies (or its reappearance since fascism was also populist), first in Great Britain with Brexit and later, in the US, with the presidential campaign and election of Donald Trump. During 2017, it surfaced in France (where it failed), the Catalonian separatist project, and most recently in Italy’s parliamentary elections. Populist parties currently hold power in seven out of fifteen Eastern European countries. And after some notable defeats, populism also threatens to make a comeback in its favorite hunting ground. In the coming months Colombia, Mexico and Brazil will hold presidential elections and in all cases a populist candidate leads in the polls.

There is a common thread linking the recent populist outbreaks in the US and Europe: Russia’s behind the scenes involvement. Robert Mueller’s investigation has already revealed that, at least since 2014, the Russians launched a multi-million dollar effort to sow discord in American politics and interfere with the electoral process. This strategy was implemented mostly through social media and managed by shadowy “troll farms” operating from Russian territory and linked to Putin’s government. A lengthy report by the minority members of the Senate Foreign Relations Committee details the arsenal of “unconventional weapons” that Russia is using to undermine Western democracies. Moscow’s shadow also extends throughout Europe. In the UK, Prime Minister Theresa May publicly accused the Putin’s regime of “deploying its state-run media organizations to plant fake stories and photo-shopped images in an attempt to sow discord in the West and undermine our institutions.” The evidence suggests that Russia’s disinformation efforts are intensifying, as showed by the events in Catalonia.

This shouldn’t be a surprise. “Dezinformatsiya” was the term coined by Stalin to describe the campaign he launched against the West after WWII. Disinformation was one of the non-conventional weapons that the USSR used during the Cold War. The agency in charge of this campaign was the KGB, Putin’s former employer. Central to its strategy was the dissemination of “black propaganda,” which attempted to shape people’s opinions without them realizing it (what we today call “fake news”). The objective was to confuse public opinion and deepen discord over main policy issues, such as defense spending and nuclear weapons. Social networks have not only made this task easier but also amplified the power of this strategy. It is both ironic and tragic that to corrode western democracies, Russia is using one of their main pillars (freedom of speech) and one of its most extraordinary achievements (technological progress).

However, one should not overestimate the threat from Russia. Populism would still exist without its disinformation campaign. At most, it is just a catalyst. We have to look for populism’s roots elsewhere. One way to define it is as the “easy way out” to structural problems imposed by the vote of the majority (stirred and awakened by a populist leader) when a growing gap opens between its aspirations and reality. This generates what the late Ernesto Laclau, one of the leading intellectual advocates of populism, described as “unsatisfied demands.” The frustration gap is the fertile ground in which the populist virus grows and develops. It is usually found in recently impoverished countries, such as Argentina and Venezuela, or those whose future prosperity is in doubt while inequality increases (like the US).

This definition of populism underscores one of its peculiarities: in contrast with communism, it is not an ideology but a means to power. This means that a populist politician can propose an “easy way out” to the frustration gap from the left or from the right. This actually happened in the US presidential primaries when in both parties, populist politicians (Trump and Sanders) shared a similar diagnosis (“the American dream is over”) but proposed different policies to address it. From the left or the right, the populist leader proposes a simplistic, paranoid and chauvinistic interpretation of reality: the frustration gap results from the deliberate action of an easily identifiable enemy, usually foreigners or minorities without electoral weight. Consequently, closing the gap requires extracting resources from these enemies (or, in the words of the populist leader, “reclaiming” them).

In the US, the frustration gap results from a variety of factors. First, technology has advanced much more rapidly than society’s ability to incorporate it into human capital in a large scale through education, training and upskilling. Second, the emergence of China as a low-cost global manufacturing powerhouse. The latter magnified the effect of the former (globalization without China would be a different story) and together they radically altered the structure of the US economy contributing to stagnating average real wages. Combined with other factors, such as the over expansion of the financial sector, they led to a growing gap between middle-class and the top 1%.

This gap cannot be closed in a sustainable basis simply with a mix of income redistribution and protectionism as Harvard economist Dani Rodrik advocates (in an updated version of FDR’s New Deal). It requires structural reforms. And this is the real challenge, because such reforms require years to take effect and are costly, at least in the short term, and therefore unpopular with the majority of the electorate. Also, there is no such thing as good and bad populism –the former limiting itself to the economic sphere and the latter to politics and institutions– as Rodrik wants us to believe. One cannot exist without the other and they jointly lead to the same result: economic, cultural and institutional decline. When unchecked, populism is totally self-destructive. Like a cancer, it kills the body that carries it (democracy) and then mutates into authoritarianism.

If populism continues to make advances in Western Europe and the US, we may witness a breakdown of the global political and economic order established after WWII. This in turn would lead to stagnation, financial instability and, possibly, increased geopolitical tension. In other words, we could see a replay of the 1930s. Maybe Argentina, which since December 2015 is trying to wean itself off a seven-decade harmful addiction to populism, can show the world how to cure this dangerous disease.

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