No Easy Answers: Why Left-Wing Economics Is Not The Answer To Right-Wing Populism

(Javier Zarracina/Vox)

On March 13, 2017, Zack Beauchamp writes on VOX:

On November 20, less than two weeks after Donald Trump’s upset win, Bernie Sanders strode onto a stage at Boston’s Berklee Performance Center to give the sold-out audience his thoughts on what had gone so disastrously wrong for the Democratic Party.

Sanders had a simple answer. Democrats, he said, needed to field candidates who would unapologetically promise that they would be willing “to stand up with the working class of this country and … take on big-money interests.”

Democrats, in other words, would only be able to defeat Trump and others like him if they adopted an anti-corporate, unabashedly left-wing policy agenda. The answer to Trump’s right-wing populism, Sanders argued, was for the left to develop a populism of its own.

That’s a belief widely shared among progressives around the world. A legion of commentators and politicians, most prominently in the United States but also in Europe, have argued that center-left parties must shift further to the left in order to fight off right-wing populists such as Trump and France’s Marine Le Pen. Supporters of these leaders, they argue, are motivated by a sense of economic insecurity in an increasingly unequal world; promise them a stronger welfare state, one better equipped to address their fundamental needs, and they will flock to the left.

“[It’s] a kind of liberal myth,” Pippa Norris, a Harvard political scientist who studies populism in the United States and Europe, says of the Sanders analysis. “[Liberals] want to have a reason why people are supporting populist parties when their values are so clearly against progressive values in terms of misogyny, sexism, racism.”

The problem is that a lot of data suggests that countries with more robust welfare states tend to have stronger far-right movements. Providing white voters with higher levels of economic security does not tamp down their anxieties about race and immigration — or, more precisely, it doesn’t do it powerfully enough. For some, it frees them to worry less about what it’s in their wallet and more about who may be moving into their neighborhoods or competing with them for jobs.

Take Britain’s Labour Party, which swung to the populist left by electing Jeremy Corbyn, a socialist who has proposed renationalizing Britain’s rail system, as its leader in 2015. The results have been disastrous: the Brexit vote in favor of leaving the European Union, plummeting poll numbers for both Corbyn and his party, and a British political scene that is shifting notably to the right on issues of immigration and multiculturalism.

The US faces even sharper pressures, as much of the public sees social spending in highly racialized terms — a phenomenon without parallel in the rest of the Western world. A more populist Democratic platform might rally more voters to Trump, as many whites will see it as a giveaway to undeserving minorities.

“Illegal immigrant households receive far more in federal welfare benefits than native American households,” Trump wrote in a 2016 Facebook post. “I will fix it.”

The puzzle of social democracy

Since World War II, Western European politics has been structured by the ideals of social democracy. From Germany to France to Sweden to Italy, every nation adopted some version of the basic social democratic vision — a mixed-market economy defined by both private property and deep government involvement, with high levels of taxation and sometimes stifling government regulation of the private sector, in exchange for a generous social welfare system that offers things like universal health care and free or heavily subsidized education.

Different countries had different ways of going about it, of course: France’s political economy is not the same as Britain’s is not the same as Norway’s. But the basic model was the same everywhere. Even “conservative” leaders, like France’s Charles de Gaulle and West Germany’s Konrad Adenauer, developed socioeconomic programs that serve as the backbone of their welfare states today.

The social democratic project, by the numbers, has worked pretty well. The 10 countries with the lowest poverty rates in the world are all in Europe (the US ranks 34 out of 35 total countries in the OECD, an organization of wealthy countries). Researchers have also found clear correlations between the size of a country’s welfare state and social mobility, indicating that countries that provide citizens with extensive benefits, like Norway and Denmark, can help them better provide for themselves down the road.

Indeed, the countries that score highest on surveys of national happiness aren’t the richest or the ones with the nicest weather — they’re ones located in frigid Scandinavia, a region defined principally by its exceedingly generous welfare states.

This isn’t to say that there aren’t drawbacks to European welfare states. There’s real evidence that excessive regulation can stymie innovation and make it harder to start new firms, and that some welfare state labor protections (like the notorious French laws limiting corporations’ ability to fire employees) can make doing business maddeningly difficult.

By most measures, though, Europe’s social and economic programs provide their citizens with better standards of living than can be found in the US. That, however, hasn’t kept the parties that advocate and defend those policies most vigorously from steadily losing votes.

The chart below, from the London School of Economics’ Simon Hix and the University of London’s Giacomo Benedetto, show how those parties have done in elections in 18 Western European countries between 1945 and 2016.

 Javier Zarracina/Vox

This creates a puzzle: Why did voters who by and large benefit from social democracy turn against the parties that most strongly support it?

It’s a hard question to answer if you believe people cast their ballots principally on the basis of their perceived economic interests. European social democrats have been proposing ideas that more objectively speak to the material interests of voters, particularly in the working class, for decades. In virtually every country in Western Europe, however, it hasn’t been enough to help the parties maintain their historic levels of public support.

Ironically, that could be because the European left is the victim of its own success. Ronald Inglehart, an eminent political scientist at the University of Michigan, argues that the combination of rapid economic growth and a robust welfare state have provided voters with enough economic security that they could start prioritizing issues beyond the distribution of wealth — issues like abortion, same-sex marriage, and, most crucially, immigration.

So it’s not that European social democrats failed to sell their economic message, or that economic redistribution became unpopular. It’s that economic issues receded in importance at the same time as Europe was experiencing a massive, unprecedented wave of nonwhite, non-Christian immigration.

That, in turn, brought some of the most politically potent nonmaterial issues — race, identity, and nationalism — to the forefront of Western voters’ mind. How comfortable were they, really, with multicultural, multifaith societies?

The traditional social democratic message didn’t really speak to these cultural anxieties. But the right’s did.

Social democracy failed to stop the far right

Jean-Marie (L) and Marine Le Pen, two generations of French far-right leaders.
(Javier Zarracina/Vox)

In 1972, right around when Europe’s social democrats were reaching their continent-wide apex, French firebrand Jean-Marie Le Pen founded a new political party called the Front National (FN). It was a populist party, one that argued that ordinary people were being exploited by a corrupt class of cosmopolitan elites. They were also authoritarian, constantly warning of the dangers of crime and the need for a harsh state response.

In 1984, the FN had an electoral breakthrough, winning about 11 percent of the French national vote in the European Parliament elections. It had done so through a pioneering strategy of attacking nonwhite immigration without overtly making arguments for white Christian superiority — a kind of racism-without-racism — that appealed to voters’ fears about cultural change (and, later, terrorism) without making the kind of nakedly racist arguments that had been delegitimized by the Nazis.

This was the birth of the modern far right — a continent-wide political movement that reinvented white identity politics for the post-Hitler age.

In 1986, Jörg Haider — a firebrand who once praised Hitler for having a “proper employment policy” — took over Austria’s Freedom Party (FPÖ), transforming it into a xenophobic party along the FN’s lines. In 1999, the FPÖ came in second in Austria’s parliamentary elections, joining a government led by the center-right People’s Party.

In 2001, a Dutch sociology professor named Pim Fortuyn launched a new political movement oriented entirely around opposition to Muslim immigration. By 2002, Fortuyn’s new party, the Pim Fortuyn List, was second in the national polls — momentum halted only by Fortuyn’s assassination at the hands of a left-wing extremist.

These parties had no unified economic message. Some, like the FN, developed something called “welfare chauvinism” — an economic platform fairly similar to that of social democrats, but paired with an idea that immigrants should be excluded from receiving these benefits. Others, like the FPÖ, took a line more similar to Europe’s conservatives, arguing for cuts to government spending and taxes.

This difference on economics didn’t really seem to affect their successes. Research by Elisabeth Ivarsflaten, a professor at the University of Bergen, finds European voters’ views on immigration policy were a “near-perfect” predictor of their likelihood of supporting their country’s far-right party. Views on the welfare state, by contrast, weren’t especially correlated with likelihood of supporting the far right, as you can see on the below chart:

 (Javier Zarracina/Vox)

What this suggests, then, is that a party’s stance on economics isn’t very important to right-wing populist voters. People choose to back those parties because they want someone to shut down immigration and restrict the rights of Muslims, not because of those parties’ stances on trade or welfare spending.

Kai Arzheimer, a professor at Germany’s University of Mainz, studied data on working-class voters, the traditional base of social democratic parties, between 1980 and 2002. He found that the stronger the welfare state, the bigger the gains for far-right parties among the working class. The top third of countries — that is, the ones with the largest welfare states — saw roughly four times the rate of far-right support among the working class as the countries in the bottom third did.

You see a similar sort of pattern inside countries. Right-wing populists typically have gotten their best results in wealthier areas of countries — that is, with voters who experience the least amounts of economic insecurity.

It’s important to bear in mind that the rise of the far right isn’t solely, or even mostly, the result of social democratic decline. The far right has pulled in some working-class voters, butmost of its supporters are petty bourgeoisie (like shopkeepers) or low-educated, fairly high-income people (like successful plumbers). Swaying these voters through economic proposals will be difficult.

“They [social democrats] shouldn’t be purely focused on winning back the voters who went to the radical right, because when push comes to shove, a significant part of that electorate is deeply nativist,” Cas Mudde, a scholar of the European far right at the University of Georgia, tells me. “They want a party that is nativist; the only way to win them back is pretty much by becoming radical right or radical right-light.”

Or, as Arzheimer put it in an interview: “I can’t really believe that it is possible to beat the populists in terms of populism.”

If social democrats see their future as a competition for votes with right-wing populists, then they have two choices: Lose the election, or lose their progressive identity.

The British Labour Party tried tacking left on the economy — and it is flailing

Jeremy Corbyn (L) and former UKIP leader Nigel Farage.
(Javier Zarracina/Vox)

European social democratic parties have not responded especially well to the far right’s rise. Some haven’t really adjusted their approach, while others have tried Mudde’s “radical right light” option, tacking right on issues of immigration and racial identity. It has not worked out well.

Take the Social Democrats in Denmark, a country that has historically been relatively tough on immigration. In the country’s 2015 parliamentary election, party leader and incumbent Prime Minister Helle Thorning-Schmidt promised to deny benefits to asylum seekers if they were unemployed. The right-wing bloc won the election, and went on to pass a law that allowed Danish police to seize assets worth more than $1,450 from asylum seekers who enter the country. The far-right People’s Party went from 13 seats in parliament to 21, making them the second-most-popular party. Thorning-Schmidt promptly lost her job.

One social democratic party took a different tack, moving hard to the left on economic policy. That’d be Britain’s Labour Party, whose move grew out of a result of a fight inside the party that goes back decades.

In the 1970s and ’80s, Labour was more or less an unabashed socialist party, an approach that, at the time, was being trounced by Margaret Thatcher and her unapologetically right-wing Conservatives. Two Labour Party leaders — Tony Blair and Gordon Brown — blamed their party’s left-wing platform for its losses, and became the leaders of a movement called New Labour. Under their leadership, Labour became one of the most pro-market social democratic parties in Europe, supporting privatization of government-controlled industries and using market-friendlier policies, like tax credits, to address poverty.

Substantively, New Labour’s record was mixed — but politically, it succeeded for a long time. Labour won its first parliamentary election in the New Labour era in 1997, and then controlled the premiership for 13 uninterrupted years under Blair and, subsequently, Brown. But a combination of the Great Recession, public exhaustion with Labour control of the government, and left-wing anger at New Labour’s retreat from socialism and participation in the Iraq War led to its defeat in 2010 parliamentary elections.

After the 2010 defeat, Labour swung back to the left. The next leader after Brown, Ed Miliband, won his leadership on the back of union support — announcing, in a post-victory speech, that “New Labour is dead.” After Miliband’s Labour Party lost badly in a May 2015 election, Miliband resigned. Labour replaced him with a relatively unknown member of Parliament named Jeremy Corbyn — a move some British observers have compared to the Democrats nominating Jill Stein for president.

Corbyn’s platform was a return to the Labour ideals of the 1970s and ’80s. The BBC has an excellent rundown of his policy proposals, which included, among other things, renationalizing Britain’s railroads, abolishing tuition for British universities, and imposing rent controls to deal with Britain’s affordable housing problem. He’s even suggested reopening the coal mines that used to be a big part of Britain’s economy.

“The reason we are losing ground to the right today is because the message of what socialism is and what it can achieve in people’s daily lives has been steadily diluted,” Corbyn said in a March 2016 speech. “Unless progressive parties and movements break with that failed economic and political establishment it is the siren voices of the populist far-right that will fill the gap.”

Corbyn’s year-plus of Labour leadership has been something of a test case for this theory. So far, it has failed utterly.

When Corbyn took control of Labour leadership last September, UKIP — Britain’s far-right, anti-EU party — had been in decline, netting around 10 percent in the Britain Elects poll aggregator. By the June 2016 Brexit vote over whether to leave the EU, UKIP’s numbers had risen to a little over 15 percent.

Corbyn and Labour publicly supported staying in the EU, but didn’t campaign for it particularly hard. It may not have mattered: Eric Kaufmann, a professor at the University of London who studies populism, looked at what Brexit voters said were the “most important” issues facing the UK. More than 40 percent said immigration; a scant 5 percent said “poverty and inequality.”

According to Kaufmann, this reflects an uncomfortable truth: The kind of voter who’s attracted to the far right just doesn’t care a whole lot about inequality and redistribution, Corbyn’s signature issues. Tacking left to win them over, as Corbyn has, is “a bad idea,” he told me in a phone conversation.

Tacking left has definitely been bad for Labour, which has stunningly low levels of public support. Only 24 percent of Britons approve of Corbyn’s performance, according to the pollster Ipsos MORI, while 62 percent disapprove. This leaves him with net approval rating of -38, the worst any UK opposition leader from any party has recorded at this point in their tenure in the past 35 years of Ipsos polling. Another poll, from YouGov, found that 24 percent of Britons backed Labour — its lowest numbers in YouGov polling since the party was in government in 2009.

Let that sink in for a second. Corbyn’s Labour Party is polling as badly today as it was when it was in power during a global economic meltdown. It is polling substantially worse than it was in 2005, when British troops were dying in Iraq as part of a war known to be waged on false pretenses. In fact, Labour won a parliamentary election held that year.

Britain Elect’s projections say that if an election had been held in early March, the Conservatives would have won by a whopping 13.9 percent. That would be a 4.6-point improvement on their already-large 2015 victory, while Labour would fall from an already weak position by 2.2 percentage points.

“I think it is a serious possibility that Labour has come to the end of its existence,” Matt Williams, a scholar of British politics at Oxford University, says. “Socialism, of some variety, is either not considered viable or is deeply unpopular, and in some cases is both.”

One can dispute Williams’s judgment here, but several facts are undeniable. During Corbyn’s leadership, the far right has gained influence on UK politics, not lost it. Corbyn’s policy platform hasn’t stemmed the spread of anti-immigrant populism, and the Tories have made restricting immigration a central part of their agenda. Corbyn himself is now pandering to the right wing; he ordered Labour MPs to vote to begin the Brexit process in Parliament. And his numbers keep falling and falling.

Left-wing politicians and writers insist that populist policies would win back disenchanted voters. In Britain, the exact opposite has happened.

The differences between America and Europe make the strategy even less promising in the US

Sanders and Trump.
(Javier Zarracina/Vox)

You might expect things to be a bit different in the United States.

The American welfare state has always been weaker than its counterparts around the West. Correspondingly, you see the highest rates of inequality in the developed world, with 3 million American children living on less than $2 a day and a health care system that ranksdead last in the respected Commonwealth Fund’s measures of performance among 11 developed countries. It’s a level of material suffering that, you might think, should be to be fertile ground for left-wing populism.

“The working class of this country is being decimated. That’s why Donald Trump won,” Bernie Sanders said in his Boston speech. “We need all of those candidates and public officials to have the guts to stand up to the oligarchy. That is the fight of today.”

There’s at least suggestive evidence, as my colleague Andrew Prokop writes, that Sanders misread the election results — that embracing left-wing populism won’t, in fact, win over Trump voters.

Take a look at results from several pivotal Senate races. In two Midwestern states, Wisconsin and Ohio, Democrats ran Sanders-esque populists — former Sen. Russ Feingold and Gov. Ted Strickland, respectively. Both lost by a wider margin than Hillary Clinton did in their state. By contrast, the Democratic candidates who most outperformed Clinton’s statewide results — Missouri’s Jason Kander and Indiana’s Evan Bayh — ran as economic centrists.

The bigger issue is that America’s welfare state is weak for the same fundamental reason that Donald Trump captured the Republican nomination in the first place: racial and cultural resentment. That profoundly complicates efforts to make left-wing populism successful in America.

In 2001, three scholars at Harvard and Dartmouth — Alberto Alesina, Edward Glaeser, and Bruce Sacerdote — found that the higher the percentage of black residents in a state, the less its government spent on welfare payments.

 Javier Zarracina/Vox

This, they hypothesized, was not an accident. People are only willing to support redistribution if they believe their tax dollars are going to people they can sympathize with. White voters, in other words, don’t want to spend their tax dollars on programs that they think will benefit black or Hispanic people.

The United States is marked by far more racial division than its European peers. Poverty, in the minds of many white Americans, is associated with blackness. Redistribution is seen through a racial lens as a result. The debate over welfare and taxes isn’t just about money, for these voters, but rather whether white money should be spent on nonwhites. “Hostility between races limits support for welfare,” Alesina, Glaeser, and Sacerdote conclude flatly in the paper.

Now, it’s been a decade and a half since this paper was published, so it’s possible the evidence has shifted. I called up Sacerdote to ask him whether any subsequent research has caused him to change his mind. His answer was firmly negative. “It’s almost sad that it’s held up so well,” he told me.

Another study, by Korea University’s Woojin Lee and Yale’s John Roemer, used data from the American National Election Studies (ANES) to identify the percentage of white voters who express high levels of racial antagonism in the United States. They then use this to build a statistical model of American elections that, roughly, attempts to measure what percentage of the Republican and Democratic vote can be attributable to the parties’ differing opinions on racial, economic, and other issues — and to what extent racial attitudes negatively impact white voters’ views of economic redistribution.

Lee and Roemer found that if racism played no role in determining whom Americans voted for, and people voted only on the basis of other cultural and economic preferences, the Democratic vote share between 1976 and 1992 would have increased dramatically. The average national income tax rate, they estimate, would be 11 to 18 points higher, as voters would be more willing to use taxes to finance a European-style welfare state.

“Voter racism,” they conclude, “pushes both parties in the United States significantly to the right on economic issues.”

The upshot is that a significant shift to the left on economic policy issues might fail to attract white Trump supporters, even in the working class. It could even plausibly hurt the Democrats politically by reminding whites just how little they want their dollars to go to “those people.” One can only imagine what Trump would tweet.

Indeed, this kind of politics — not-so-subtly manipulating racial grievances to undercut support for social spending — has been practiced by Republicans and conservative Democrats for decades. Ronald Reagan, for example, famously used the specter of the “welfare queen” — an (implied) black woman who lived lavishly by manipulating the welfare system — as a rationale for his budget cuts.

“What Reagan had succeeded in doing was tarnishing liberalism as a giveaway to people of color,” Ian Haney López, a professor at UC Berkeley who studies race and American politics, says. “Investment in our cities, investment in our schools, investment in social welfare programs, all of that was branded as giveaway to undeserving minorities.”

The uncomfortable truth is that America’s lack of a European-style welfare state hurts a lot of white Americans. But a large number of white voters believe that social spending programs mostly benefit nonwhites. As such, they oppose them with far more fervor than any similar voting bloc in Europe.

In this context, tacking to the left on economics won’t give Democrats a silver bullet to use against the racial resentment powering Trump’s success. It could actually wind up giving Trump an even bigger gun. If Democrats really want to stop right-wing populists like Trump, they need a strategy that blunts the true drivers of their appeal — and that means focusing on more than economics.

http://www.vox.com/world/2017/3/13/14698812/bernie-trump-corbyn-left-wing-populism

The solution is not to create a stronger welfare state, which would result in the eventual dependency of citizens for their economic well-being on the State and whatever elite controls the coercive powers of government. Instead we should be empowering EVERY citizen to contribute productively to the future economy, through their labor and/or their ownership of wealth-creating, income-producing productive capital so that citizens would become empowered as owners to meet their own consumption needs and government would become more dependent on economically independent citizens, thus reversing current global trends of State dependency.

We need to reevaluate our tax and central banking institutions, as well as, labor and welfare laws. We need to innovate in such ways that we lower the barriers to equal economic opportunity to access to capital ownership and purchase the capital, and pay for it out of what the capital produces. and create a level playing field based on anti-monopoly and anti-greed fairness and balance between production and consumption. In so doing, every citizen can begin to accumulate a viable capital estate without having to take away from those who now own by using the tax system to redistribute the income of capital owners. What the “haves” do lose is the productive capital ownership monopoly they enjoy under the present unjust system. A key descriptor of such innovation is to find the ways in which “have nots” can become “haves” without taking from the “haves.” Thus, the reform of the “system,” as binary economist Louis Kelso postulated, “must be structured so that eventually all citizens produce an expanding proportion of their income through their privately owned productive capital and simultaneously generate enough purchasing power to consume the economy’s output.”

At present the economy’s growth is anemic and the vast majority of citizens are facing job insecurity and wage stagnation.

We need to return to environmentally responsible and quality growth if we are to create general affluence for EVERY citizen. One feasible way is to lift ownership-concentrating central bank (such as the Federal Reserve System) credit barriers and other institutional barriers that have historically separated owners from non-owners and link tax and monetary reforms to the goal of expanded capital ownership. This can be done under the existing legal powers of each of the 12 Federal Reserve regional banks, and will not add to the already unsustainable debt of the Federal Government or raise taxes on ordinary taxpayers. We need to free the system of dependency on Wall Street or the accumulated savings and money power of the rich and super-rich who control Wall Street. The Federal Reserve System has stifled the growth of America’s productive capacity through its monetary policy by monetizing public-sector growth and mounting Federal deficits and “Wall Street” bailouts; by favoring speculation over investment; by shortchanging the capital credit needs of entrepreneurs, inventors, farmers, and workers; by increasing the dependency of with usurious consumer credit; and by perpetuating unjust capital credit and ownership barriers between rich Americans and those without savings. The Federal Reserve Bank should be used to provide interest-free capital credit (including only transaction and risk premiums) and monetize each capital formation transaction, determined by the same expertise that determines it today––management and banks––that each transaction is viably feasible so that there is virtually no risk in the Federal Reserve. The first layer of risk would be taken by the commercial credit insurers, backed by a new government corporation, the Capital Diffusion Reinsurance Corporation, through which the loans could be guaranteed.

Thus, we should be using the Federal Reserve Bank to insure loans that will translate to long-term growth of the economy, and NOT engage austerity measures that will result in negative growth.

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