Making sense of social trends

Populism has been at the top of the political agenda for much of the last two years. It is manifest in the Brexit vote; the election of Donald Trump; the rise of the AfD in Germany and last weekend’s election in Italy, which saw the Five Star Movement and Lega Nord perform particularly well gaining almost 50% of the votes. To many people, this backlash against the status quo came out of the blue. In reality, it has been brewing for quite some time.

The economist Simon Wren-Lewis recently wrote in a blogpost that “those who think the UK descended into political madness with Brexit are wrong: the madness started with austerity in 2010.” I would argue that the roots extend even further back, and have long believed that Tony Blair’s decision to participate in the invasion of Iraq in 2003 marked a fundamental erosion of trust in government in the UK. Around the same time, in 2004, the journalist David Goodhart wrote an influential essay in Prospect Magazine, entitled “Too diverse?” in which he argued that tolerant western societies face a “progressive dilemma” as the greater diversity of lifestyles and beliefs make it more difficult to find common issues around which society can coalesce.

Goodhart is no tub-thumping populist – indeed he is very much part of the “liberal elite.” Thus, his argument that “large-scale immigration …  is not just about economics; it is about those less tangible things to do with identity and mutual obligation … It can also create real – as opposed to just imagined – conflicts of interest” saw him vilified in sections of polite society. But as the journalist Jonathan Freedland remarked last year in a review of Goodhart’s latest book “you don’t have to like any part of that argument to recognise that it was prescient.”

Fast forward to the present and the recent book by political theorist Yascha Mounk The People vs. Democracy argues that the glue that has held together the liberal democratic model of the post-war era is becoming unstuck. I suspect that the conclusion is a bit overdone but he does accurately nail some of the governance problems faced by western societies. In his view, “elites are taking hold of the political system and making it increasingly unresponsive: the powerful are less and less willing to cede to the views of the people.” In a highly readable review of this book in The American Interest, Shadi Hamid, a senior fellow at the Brookings Institution, argues that this is primarily the result of a change in the nature of government which has become more technocratic and thus has less room to listen to the people.

In Hamid’s view, “technological progress, scientific advancement, and the necessity of ambitious welfare states to maintain social order” has necessitated this more technocratic approach. The electorate has outsourced issues such as taxation, healthcare and a whole manner of regulatory issues to government – they simply do not have the expertise to deal with them nor the time to become fully informed. Hamid points out that governments made a mistake in treating immigration as just another technocratic problem that could easily be dealt with, but “voters didn’t see it that way and repeatedly tried to get politicians to listen.” Worse still, “governing elites wished to make sensitive conversations … off-limits for polite democratic deliberation. To make matters worse, it was done in a condescending way, with enlightened moral appeals … juxtaposed to the untutored bigotry of the masses.”

This was a particular problem in Europe where the rise of AfD; the Italian election result and the Brexit vote are all related in some degree or another to domestic concerns about immigration which governments were unwilling to confront. It may not be a problem that liberals such as myself are willing to acknowledge, but as a partial explanation of why the populist backlash of recent years has taken place it does fit the facts. This does not make the vast majority of the European population racist or xenophobic. But it does echo Goodhart’s warning that recent changes in western societies could “erode feelings of mutual obligation, reducing willingness to pay tax and even encouraging a retreat from the public domain. In the decades ahead European politics itself may start to shift on this axis, with left and right being eclipsed by value-based culture wars and movements for and against diversity.”

It also suggests that governments across the continent have taken their eye off the ball when it comes to addressing the concerns of their electorates. Obviously, these concerns have been magnified by the aftershocks from the global financial crisis of 2008-09, and perhaps governments were so preoccupied with trying to generate a recovery that they were distracted. But as I pointed out in early 2015, it is “evident that the world is not going to return to a pre-2007 “normality”... and policy makers need to start having honest discussions with their electorates about these issues.” In recognition of the fact that the French electorate has concerns, the government last month put forward a plan to tighten immigration controls. Had Angela Merkel known in February 2016 what she knows now about German voters’ concerns, perhaps the EU would have offered the UK more concessions ahead of the Brexit vote.

But pulling up the drawbridge is not the answer. The idea that limiting immigration makes life better for European voters is based on the notion that there is a fixed amount of work, and reducing immigration reduces the competition for that work. This is clearly wrong, but whatever the economics profession might say, a large body of the electorate does not want to hear that message and in order to get re-elected governments have to take a line which may not be in their best economic interests. I am sure that the prevailing opposition to immigration will eventually change, but perhaps not quite for some time, and governments may not be quite so willing to open their borders for an even longer period for fear of the political backlash this generates. I hope I am wrong when I say we may well look back at the last 20 years as the golden age of the liberal economy.