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By Steven Kinsella (Reporter)
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The fatal flaw of the populist approach

Monday, October 31, 2016 6:25
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The world is awash with populists. From Ireland’s independents to President Duterte of the Philippines, from Germany’s anti-immigrant AfD party to Norbert Hofer of the far-right Freedom Party of Austria, from Ukip and Jeremy Corbyn in Britain to Donald Trump in the US, populists are on the rise. And we’re not talking just a few random demagogues here, though personality does go a long way. (Trump-related Pulp Fiction pun intended, by the way.)

We are seeing a rise in populist parties getting and holding onto power in several European countries including Finland, Hungary, Latvia, Lithuania, Norway, Ireland and Switzerland. Iceland is about to elect the Pirate Party (no really) to power. The French Front National may well take power in France, riding a wave of anti-immigrant sentiment there.

Populists come from both sides of the political spectrum: Greece’s Syriza party and Spain’s Podemos party consider themselves of the left, while Germany’s AfD and France’s Front National are on the far right.

So it’s a problem. Old, established, centrist parties have lost their grip on power – spectacularly so in Greece – while newer parties are standing mostly on a basis of what they are not – Corbyn is not a Blairite, Marine Le Pen is not Nicolas Sarkozy, and so forth. The 32nd Dáil contains 19 TDs who are nominally ‘independent’, with 12 more in left or far-left groupings. Ireland does not produce far-right TDs that often, though it does produce some very right-wing policies from time to time.

Where does populism come from? What is it, and why does it matter? It should not surprise any reader of this column that I think the answer lies in the economy. Political parties exist because they can aggregate the preferences of a vast number of very different individuals. Every party is a coalition of these interests. When parties wield power, they do so partially on behalf of these interests.


Other people who are not in this constituency typically don’t mind if they get pretty good governance. They know their turn will come eventually. Centrist parties play on this and so suppress any ideological heterogeneity they might have in order to appeal to the most people. This makes them indistinguishable in the long run and vulnerable to attack from either end of the political spectrum.


The problem is that in the run-up to the crisis of 2008, existing parties were unable to stop the rise of credit-fuelled booms around the world. During the crisis, as existing parties were either electorally decimated or forced to bail out corrupt banks and impose austerity measures on their people, others offered an alternative: not that. In particular, far-right and far-left parties had the same policy stance: we’ll forsake austerity, jail the bankers, clean up the system, increase investment. All of this sounds great, but does not fit within the constraints those who actually hold power work within.

Every policy idea, like ‘jail the bankers’, has to fit three key constraints. First, it has to be technically correct. Are they guilty of anything? Second, it has to be administratively feasible. Are the banks going to collapse if the people who know where the bodies are buried get the sack? Third, it has to be politically palatable. All politicians serve many masters. Those in power serve more, not fewer, masters, including the media. So does this ‘jail the banker’ policy work? Not in general, because the white-collar-crime laws aren’t there for them to break, or the bankers themselves are guilty of nothing more than rampant stupidity.

Take another policy – the introduction of water charges in Ireland. Technically correct? Of course. It costs money to produce clean water, and vast sums to invest in water infrastructure which the state hasn’t done for decades. So tax those who use the water to pay for that water usage.

Administratively feasible? Yes, every other country in Europe does it, so it’s not rocket science. Politically palatable? Not at all. Why? Because of austerity, and because of the manner in which Irish Water was set up. It screamed of elitism and corporatism.

The ‘greatest’ moment of the global populist movement was June 23 when, on the basis of lies promulgated by populist frauds like Nigel Farage and Boris Johnson, Britain voted to leave the European Union.

Elitism is the oxygen of populism. A populist needs an elite of some kind to bounce off, to fight against. In each of the cases I’ve mentioned, the elites have failed to do the one thing they were able to do since the 1990s – deliver increased economic growth and from growth, increased living standards for the general population. This ongoing economic malaise where rich, ageing, developed countries are trapped with large household, corporate, and sovereign debts, with little inflation, low interest rates and even less growth, is called secular stagnation. As the economy stagnates after the crisis, so the message of the populists gets more and more attractive. We are not like the thing that caused this, that causes you to suffer. We are different. Give us the power and we will make things better for you.

(An aside: perhaps one of the reasons Ireland’s populists aren’t anti-immigrant is that we have yet to see hundreds and thousands of them on our streets. If Ireland were to take an amount of refugees proportional to the amount Germany has taken, they would fill the Aviva Stadium. We might have a different, and uglier, set of messages coming from our populists then. We also have strong and real economic growth here in Ireland, where growth has collapsed almost everywhere in the developed world. We aren’t feeling it in Ireland. So our populists say different things.)

Back to the main populist message: give us the power and we will make things better for you. It turns out when populists take power, as they have done in Greece and elsewhere, they don’t typically do different things. Why? Because populists face the same constraints when implementing their policies as the ‘elites’ they displace. If it is not technically correct, administratively feasible, and politically palatable, it won’t work.

Syriza sold the Greek people a set of fictions. They would relieve the burden of austerity. Instead, today they impose it. It was Frankfurt’s way, not Labour’s way. Podemos would have been no different. Populists tell people comforting lies and half-truths to gain power. This is not to say the people they want to replace are any better. But being honest about the constraints people face while in power is the only way to defeat populism. And this is the one thing those in power can’t do – because it deprives them of much of the very power they’ve spent a lifetime seeking.

In extremis, populism results in people voting against their own interests. Brexit will be a disaster for the very people who voted in such numbers to ‘take back control’. Centrist politics is not perfect. But replacing the elites doesn’t replace the constraints rulers will always face.


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