Arne Bigsten | 29 January 2020
What are the reasons for the recent increase in populist and anti-globalist sentiments in the North? In an attempt to answer this question, I start from the dictum of the French Revolution: “Liberty, Equality, and Fraternity”. The reason for the longevity of this slogan is that it captures the essential elements of the trade-offs that governments face in policy-making. The political debate is mainly about how one should trade-off these broad goals to deliver the best possible welfare to citizens.
To simplify, I equate “liberty” with “efficiency”, that is a situation where economic agents are allowed to maximise their income. I assume “equality” refers to the distribution of incomes or assets. We also have the third dimension, fraternity or brotherhood, which is more problematic. As long as major groups of society agree on the meaning of fraternity, the inclusion of this dimension leads to a three-way trade-off between goals. However, I would argue that this simple interpretation of fraternity has broken down in recent decades due to technical change and globalisation.
There is a political science model indicating that the left-right (equity-efficiency) dimension should be complemented by a GAL-TAN dimension (green, alternative, liberal vs traditional, authoritarian, nationalist) crossing the left-right dimension – giving four policy directions altogether. This dimension relates to lifestyle and identity. In accordance with our dictum, I call this the fraternity-dimension. The question is what citizens see as their fraternity. According to the TAN-view, the fraternity only includes nationals, while the GAL-view is more inclusive and could even mean fraternity on a global scale. There is, of course, a continuum of positions as to how much you weigh global solidarity vs national (or local) solidarity. The politicians who focus on national brotherhood we may call nationalists, while the global fraternity group may be called globalists. Thus, politicians and citizens nowadays have four outcomes or policy directions to weigh together, namely: efficiency, equality, nationalism, and globalism.
The fraternity dimension has economic, political, and social components of identity determining social cohesion. The economic determinant of the extent of brotherhood or shared identity is economic inequality reflecting types of jobs and incomes. The political component is the relative weight of national identity. The social component of identity is a feeling of shared cultural values.
Populism, as we know it today, has evolved over the last few decades. People’s preferences along the fraternity dimension have become more diverse. One group has moved in the nationalist (anti-globalisation) direction, while another has become more globalistic (Goodhart, D., The road to somewhere: The populist revolt and the future of politics, Hurst & Co, London, 2017). There has thus been a loss of shared identity.
As identities polarised into skill and nationality, trust for those at the top began to collapse (Collier, P., The Future of Capitalism. Facing the New Anxieties, Allen Lane, 2018). The weakening of a shared identity across society has weakened the sense of obligation felt by the fortunate towards the less fortunate. This is noted among the latter, who then trust the elite less. Populists try to build their support base through narratives of hatred of other people, who live in the same country. Support for the welfare state may be undermined if citizens feel less connected to parts of the population. Anti-immigration feelings may be driven both by economic self-interest of the poorer segments of society and cultural animosity. Oppositional identities are lethal for generosity, trust, and cooperation.
Ingelhart has shown that there was a shift towards postmaterialist values in Western societies after World War II. However, in recent decades, there has been a backlash against this – motivating populist authoritarian parties. Insecurity encourages an authoritarian, xenophobic reaction in which people close ranks behind strong leaders, with strong in-group solidarity, rejection of outsiders, and rigid conformity to group norms (Inglehart, R., Norris, P., “Trump and the Populist Authoritarian Parties: The Silent Revolution in Reverse”, Perspectives on Politics 15(2): 44-3454, 2017).
Economic factors such as income and unemployment rates are surprisingly weak predictors of the populist vote. Thus, exit polls from the U.S. 2016 presidential election show that those most concerned with economic problems disproportionately voted for Clinton, while those who considered immigration the most crucial problem voted for Trump ( Mutz, D.C., “Status threat, not economic hardship, explains the 2016 presidential vote”, PNAS 115(19): E4330-E4339, 2018; Collingwood, L., Valenzuela, A., “Vote Switching in the 2016 Election: How Racial and Immigration Attitudes, Not Economics, Explain Shifts in White Voting”, Public Opinion Quarterly, 83(1): 91-113, 2019).
However, there are both cohort and time effects. Ingelhart’s and Norris’ main point is that decades of declining or stagnating real incomes and rising inequality have produced long-term effects conducive to the populist vote. Thus, although the proximate or cross-section cause of the populist vote is cultural backlash, its high, present level reflects declining economic security and rising economic inequality.
Globalisation has had a significant impact on the global economy, but this does not mean that all groups have seen their situation improve or at least not improve to the same extent as that of other groups. The process of globalisation has helped reduce global inequality by helping poorer countries catch up economically, at the same time as it has contributed to increasing inequality within Northern countries. This has contributed to the populism that we now see in advanced economies.
Post-World War II policymakers in Western societies managed to deal with development challenges by using taxation to redistribute consumption and to provide security. However, in recent decades, these societies have become increasingly divided on geographic, educational, and identity grounds. The new well-educated urban elite is divorced from the less educated provincial population. This has paved the way for populist movements critical of the elite, rather than mobilisation along the classical left-right scale.
Policymakers need to deal with the economic divergences, fragmentation of identifies, and exclusionary nationalism. Higher ambitions in terms of equality may have a cost in terms of reduced economic efficiency, but they may still be necessary for stable and just long-term development.
Arne Bigsten is Professor Emeritus of Development Economics at the University of Gothenburg. His research concerned poverty, income distribution, trade, globalisation, industrial development, foreign aid, and institutional reform.