Economic failure is food for political extremists
Inequality and stagnant incomes encourage rise of elected demagogues
Now that the incompetence and moral squalor of Donald Trump’s Administration are beyond doubt, the question is whether the immune system of the American body politic is healthy enough to see him off.
Next year’s election will answer that. But someone who doubts it will be is Robert Wade, an expatriate Kiwi who is professor of global political economy at the London School of Economics.
The Sir Frank Holmes memorial lecture Wade gave at Victoria University this month was titled “Why the ‘Trump Era’ could last 30 years”. Wade sees Trump not as an aberration, but as an example of a type — the elected demagogue — cropping up all over the world: Orban in Hungary, Erdogan in Turkey, Duterte in the Philippines, Bolsonaro in Brazil. Even in the largest democracy of all, India, the Hindu nationalism of Narendra Modi is a far cry from the views of Ghandi or Nehru.
Brexit is another manifestation of this rising tide of populism. And the attitudes behind Brexit (with the possible exception of imperial nostalgia) are hardly unknown on the Continent as well.
So what has propelled this? Wade argues that it is fundamentally economic: the combined effect of globalisation and a neoliberal ideology that entrenches and increases inequality, resulting in stagnant real incomes and financial insecurity for a large swathe of the population — and which will only increase as artificial intelligence puts more and more ways of earning a living at risk.
The bottom 60 per cent of the US income distribution had seen no increase in real wages since 1980, Wade said, and whereas in 1970, 90 per cent of Americans at age 30 earned more than their parents had at that age, by 2018 only 50 per cent did.
And as evidence of financial insecurity, he pointed to a survey in 2016 undertaken for the Federal Reserve which found that 46 per cent of American households could not meet emergency expenditure of just US$400 without borrowing or selling something.
“How fearful these people must be. So they look to a saviour, who communicates with them directly, one-to-one, on their phone.”
A vainglorious opportunist like Trump exploits this by using a bifurcated strategy, Wade contends, getting mass support by playing up cultural differences and using them to obscure the economic grievances he does nothing to address, while getting the support of the rich by tax cuts and deregulation.
The playbook is to foster a sense of a tribe under threat from some scapegoat group — immigrants or Muslims or remote know-it-all elites.
Former Trump strategist Steve Bannon has been startlingly candid on this point: “This is not an era of persuasion. It’s an era of mobilisation. People now move in tribes . . . We got elected on Drain the Swamp, Lock Her Up, Build a Wall. Anger and fear [are] what gets people to the polls.
“The political imperative is to dominate the conversation. The Democrats don’t matter. The real opposition is the media and the way
to deal with them is to flood the zone [social media] with shit.”
Trump’s demonisation of the independent mass media as the enemies of the people, along with contempt for the rule of law and for science (especially on climate change), finds fertile ground in a general decline in trust in traditional institutions.
Wade pointed in particular to a survey in the United States and Europe, reported in 2016, in which respondents were asked if it was essential to live in a country governed democratically.
When the responses are sorted by age cohort there is a clear declining trend, especially in the US, where 60 per cent of those born in the 1940s rated democracy essential but only 30 per cent of those born in the 1980s did.
Meanwhile, in Britain the latest annual audit of political engagement survey undertaken for the Hansard Society found twice as many people trusted the military or judges to act in the national interest as trusted the government to do so. A majority (54 per cent) said Britain needed a strong leader willing to break the rules.
Wade said a tribal division into Leavers and Remainers now dominated other identities, including class and political party.
He expects a constitutional crisis and general election arising from the looming collision between a
I’m really disappointed at how badly the Remain side has argued the case for remaining [in the EU]
Professor Robert Wade
European Union clear that it will not reopen the withdrawal deal negotiated with Theresa May and will continue to stand behind Ireland and the Good Friday peace agreement, and on the other hand, a United (?) Kingdom where a majority in Parliament oppose a no-deal Brexit while Boris Johnson’s Government is committed to leaving the EU on October 31, deal or no deal.
The likely Parliamentary outcome of such an election is unclear, Wade said.
But the issue had become an existential threat to the United Kingdom as such, with a strong Remain majority in Scotland and calls in Northern Ireland for a vote on reunification, and the likelihood that whatever the outcome, a large proportion of the British population will be profoundly unhappy.
Economically, it makes little sense for a country which (like New Zealand) has a persistent current account deficit to imperil half its trade, and which (again like New Zealand) has a productivity problem to make itself a lot less attractive as an investment destination, while hobbling one industry — financial services — where it is world class, in the fatuous belief that it will be able to secure better terms in trade agreements as a market of 67 million than as part of a single market of half a billion people.
“I’m really disappointed at how badly the Remain side has argued the case for remaining,” Wade said. “They have offered very little by way of positive arguments.”
Instead, the debate has been, as Tony Blair’s former spin doctor Alastair Campbell put it, a contest between Project Lies and Project Fear.