Tag Archive for: Populism

The populist backlash against global institutions may be good for them

Multilateralism is not necessarily under threat from populist anti-globalism.

The rise of populism in democracies does not inevitably threaten the rules-based international order (that tired but vital staple of Australian policy-speak). On the contrary, this populist moment creates opportunities to make international institutions more legitimate and effective by pushing for long-overdue reforms.

In theory, and where they are capable and neutral, global governance bodies from the well-known (such as World Health Organization) to the less high-profile (such as the UN International Telecommunications Union) can coordinate action and set standards on shared global challenges. They are also vital to advancing Australia’s own interests as a relatively vulnerable and trade-dependent power. Yet the purpose and value of multilateral bodies is probably not evident to the average voter. The ‘rules-based international order’ has become an easy but lazy phrase routinely rolled out in our policymaking.

If nothing else, popular scepticism about global governance is an opportunity—even within Canberra policy circles—to work smarter at always making a compelling, practical and positive case for why multilateral engagement matters.

‘Populism’ can signify many things. In foreign policy terms, it refers to domestic political portrayal of global governance bodies as illegitimate technocratic elites, foreign anti-sovereign impositions frustrating the will of the people. Scholars write of a populist ‘backlash’ against the international order, beginning in the mid-2010s, one that is strongest in the very Western powers that have long championed and benefited from that order.

Think of how pro-Brexit advocates scapegoated the European Court of Human Rights—which Britain helped establish and which has no connection to the EU—as a bunch of patronising ‘foreign’ judges out of touch with ordinary Britons’ reasonable concerns about deporting murder-preaching radical clerics.

In his first term as president, Donald Trump pulled the US out of the UN Human Rights Council and the World Health Organisation for domestic political gain. Arch-populist Rodrigo Duterte withdrew the Philippines from the International Criminal Court during his presidency. From Jair Bolsonaro in Brazil to Viktor Orban in Hungary, the prevailing view is that the past decade’s notable rise in populist rhetoric creates something of an existential crisis for multilateralism.

Yet this prevailing view is questionable. Research from the Australian National University shows that populist political rhetoric at the national level does not necessarily result in actual disengagement at the supra-national level. Even when it does, withdrawal or de-funding (or threats of both) may have unexpected positives. It may catalyse much-needed reform, or stimulate previously complacent partners to revitalise their institutional engagement. For instance, when the US left the Human Rights Council in 2018, northern European countries realised that if they were to draw the US back in, they needed finally to take long-standing (pre-Trump) US claims about imbalance and hypocrisy in the council’s agenda seriously.

Beyond their questionable validity, many commonly held criticisms of populism are also problematic. They caricature populists as bad and international institutions as good, passive victims of some irrational reactionary external pathology. Ironically, intellectual and bureaucratic elites who hold these views fulfil the stereotype (powerfully deployed by populists) of being patronising and unempathetic. Such people dismiss the populist backlash as nonsensical, inexplicable and backward.

This is unhelpful, because policymakers should be asking a very different set of questions. How did such institutions become so vulnerable to populist critiques? How have processes of global law-making, decision-making and governance come to be perceived as remote, as having lost touch with the concerns of ordinary people, their supposedly universal values taken as self-evidently superior? How did the operation and messaging of global governance itself lead to populism? How have international institutions overreached their mandates, underperformed them, or rendered them hostage to powerful undemocratic states?

Finally, the prevailing view is also misleading and distracting. Yes, populism in the West sometimes calls into question or even directly attacks the legitimacy of multilateral bodies. But while populism is a hot topic, it simply isn’t the greatest objective threat to the future of principled, effective and cooperative problem-solving, standard-setting and dialogue-enabling institutions grounded in UN Charter values. In fact, the greater risk, from an Australian and Pacific perspective, is being passive and naive in multilateral arenas while autocratic powers capture and re-shape the institutions and agendas of the post-1945 order.

If populist attacks help to break this Western sleepwalk and to catalyse much-needed engagement, reform and revitalisation of parts of that order, they might unintentionally offset some of the damage their own rhetoric may do the legitimacy of those bodies. At very least, the backlash will force Canberra policymakers to unpack assumptions, orthodoxies and value-propositions currently lazily wrapped in the familiar ‘rules-based international order’ mantra.

Will Italy’s populists upend Europe?

‘They are trying to stop us with the usual blackmail of rising spreads, falling stock markets and European threats,’ wrote Matteo Salvini, leader of Italy’s League party, on his Facebook page. ‘This time,’ Salvini insisted, ‘change is coming.’

Now he has formed a new government with the leader of the populist Five Star Movement, Luigi Di Maio. And, as Salvini’s statement suggests, the coalition between M5S and the League could represent a new Eurosceptic movement capable of exacting revenge on financial markets, the European Union and German fiscal hawks.

In fact, Salvini has already declared ‘round two’ in the larger battle between Italian populism and the European establishment. Round one ended in November 2011, when German Chancellor Angela Merkel and then-French President Nicolas Sarkozy leveraged financial-market concerns to force former Italian Prime Minister Silvio Berlusconi out of office. And since then, populist Euroscepticism has been on the rise, particularly in Italy, owing to its frontline position in the migrant and refugee crisis.

Italy’s recent political drama played out against a larger backdrop of political change across Europe. Markets were spooked last month by the emergence of a draft M5S/League document suggesting that Europe should return to the period before the 1992 Maastricht Treaty and the introduction of the euro. But such reports should be taken with a grain of salt. Both M5S and the League have been ambivalent about how far they want to push the anti‑euro agenda, and both responded to the leak of the document by promising that a discussion of the euro was not on the table. Then, in late May, President Sergio Mattarella caused an uproar by blocking the appointment of the Eurosceptic economist Paolo Savona as the country’s new minister of economy and finance, suggesting that the single currency may yet be a central issue in the future.

An Italian government combining two very different strands of populism will pose a serious threat to the European project, because it could form the core of a new federation of populists and Eurosceptics that have hitherto operated separately. No longer would Eurosceptics be fragmented into different tribes of anti‑immigrant politicians on the right and anti‑austerity politicians on the left.

To be sure, M5S and the League are awkward bedfellows, which is why they initially failed to form a government after winning a combined majority on 4 March. But if they succeed in governing, their political program could serve as a template for populists throughout the EU.

Consider, for example, the League’s international agenda, which advocates a crusade against immigration and a return to more traditional values. Those are the same ideas that animate Hungary’s increasingly authoritarian prime minister, Viktor Orbán, who has now forged a close relationship with Salvini.

For its part, M5S is not unsympathetic to the League’s anti-immigrant agenda, and it would complement it by rallying Mediterranean member states behind an anti‑austerity, anti‑Northern European banner. Though France and Spain would probably not join this cause, Greece and other countries might, and together they could severely disrupt EU politics.

Moreover, all of this is occurring in the shadow of next year’s elections to the European Parliament, which will likely be attended by a surge of populist parties across the continent. European populists would like nothing more than to create a self-hating parliament—one in which a majority of MEPs oppose the very existence of the institution in which they are serving. Were this to happen, it would also have far‑reaching implications for the composition of the European Commission and other EU governing bodies, which have traditionally been insulated from political ructions at the national level.

Still, while the forces of populism have been mobilising, so too has the mainstream, particularly since Emmanuel Macron’s electrifying victory in the French presidential election last year. Macron has introduced a new wave of thinking about the European project; and, like the populists themselves, he represents change, rather than the status quo. Macron’s genius is that he does not accept the traditional dividing lines between left and right, and between EU integration and national sovereignty. His is a story that could appeal to the Europeans who feel left behind.

Macron and Merkel have promised to present an outline for EU‑level reforms within the next month. One of the more interesting ideas on offer is that of a ‘flexible Europe’, which would allow a coalition of willing member states to move forward on deeper integration, while leaving the door open for others to enter at a later date. If Italy continues down the populist path, it will exclude itself from this core group.

The big question for this era of European history, then, is whether mainstream reformers will win out over populists. The old‑new Franco–German tandem wants to reinvent the European core, thereby pushing the Eurosceptic to the fringe. But Salvini and Di Maio want to make that fringe the new core, thereby isolating the EU’s traditional leading powers.

Needless to say, this will be a long game. The European core won the first round when it effectively replaced Berlusconi with Mario Monti, who was very popular in European capitals. And yet the resurgence of populism in Italy suggests that this may have been a Pyrrhic victory.

According to a recent study from the European Council on Foreign Relations, public support for the EU declined more in Italy than in any other member state between 2007 and 2017. Little wonder, then, that Italy has quickly gone from having one of the most pro‑EU governments in the bloc to serving potentially as the new vanguard of European populism.

But all hope is not lost for those who still believe in the European project. The silver lining of the Eurosceptics’ success is that pro-Europeans have been shaken from their complacency. The viability of both movements is about to be tested, starting in Italy.

How Eastern European populism is different

In 2016, the United Kingdom’s Brexit referendum and Donald Trump’s election to the US presidency created an impression that Eastern European–style populism was engulfing the West. In reality, the situation in Western Europe and the United States is starkly different.

As political scientists Martin Eiermann, Yascha Mounk and Limor Goultchin of the Tony Blair Institute for Global Change have shown, only in Europe’s post-communist east do populists routinely beat traditional parties in elections. Of 15 Eastern European countries, populist parties currently hold power in seven, belong to the ruling coalition in two more, and are the main opposition force in three.

Eiermann, Mounk and Goultchin also point out that whereas populist parties captured 20% or more of the vote in only two Eastern European countries in 2000, today they have done so in 10 countries. In Poland, populist parties have gone from winning a mere 0.1% of the vote in 2000 to holding a parliamentary majority under the Law and Justice (PiS) party’s current government. And in Hungary, support for Prime Minister Viktor Orbán’s Fidesz party has at times exceeded 70%.

Aside from hard data, we need to consider the underlying social and political factors that have made populism so much stronger in Eastern Europe. For starters, Eastern Europe lacks the tradition of checks and balances that has long safeguarded Western democracy. Unlike PiS Chairman Jarosław Kaczyński, Poland’s de facto ruler, Trump does not ignore judicial decisions or sic the security services on the opposition.

Or consider Special Counsel Robert Mueller’s investigation into Trump and his campaign’s ties to Russia. Mueller was appointed by Deputy Attorney General Rod Rosenstein, a government functionary who is subordinate to Trump within the executive branch. But while Trump has the authority to fire Mueller or Rosenstein, he wouldn’t dare do so. The same cannot be said for Kaczyński.

Another major difference is that Eastern Europeans tend to hold more materialist attitudes than Westerners, who have moved beyond concerns about physical security to embrace what sociologist Ronald Inglehart calls post-materialist values. One aspect of this difference is that Eastern European societies are more vulnerable to attacks on abstract liberal institutions such as freedom of speech and judicial independence.

This shouldn’t be too surprising. After all, liberalism in Eastern Europe is a Western import. Notwithstanding the Trump and Brexit phenomena, the US and the UK have deeply embedded cultures of political and social liberalism. In Eastern Europe, civil society is not just weaker; it is also more focused on areas such as charity, religion, leisure and politics, rather than social issues.

Moreover, in the vastly different political landscape of Europe’s post-communist states, the left is either very weak or completely absent from the political mainstream. The political dividing line, then, is not between left and right, but between right and wrong. As a result, Eastern Europe is much more prone to the ‘friend or foe’ dichotomy conceived by the anti-liberal German political and legal theorist Carl Schmitt. Each side conceives of itself as the only real representative of the nation, and treats its opponents as illegitimate alternatives, who should be disenfranchised, not merely defeated.

Another major difference between Eastern and Western European populists is that the former can count on support not only from the working class, but also from the middle class. According to research conducted by Maciej Gdula of the Institute of Advanced Study in Warsaw, political attitudes in Poland do not align with whether one benefited or lost out during the country’s post-communist economic transformation. The ruling party’s electorate includes many who are generally satisfied with their lives, and are keeping up with the country’s development.

For such voters, the appeal of the populist’s message lies in its provision of an overarching narrative in which to organise positive and negative experiences. This creates a sense of purpose, as it ties voters more strongly to the party. Voters do not develop their own opinions about the courts, refugees or the opposition based on their own experiences. Instead, they listen to the leader, adjusting their views according to their political choices.

The success of the PiS, therefore, is rooted not in frustrated voters’ economic interests. For the working class, the desire for a sense of community is the major consideration. For their middle-class counterparts, it is the satisfaction that arises not from material wealth, but from pointing to someone who is perceived as inferior, from refugees to depraved elites to cliquish judges. Orbán and Kaczyński are experts in capitalising on this longing.

It is worth asking if populism will come to define the true cultural—and, in turn, political—boundaries of the European Union. If Polish or Hungarian politics proves more similar to the politics of Russia than of France or Austria, does that mean the EU’s borders are overextended? Could it be that their place is with Russia, rather than with Western Europe? Are the EU’s borders therefore impossible to maintain in the long run?

These are troubling questions. And only Eastern Europeans themselves can settle them.

In defence of economic populism

Populists abhor restraints on the political executive. Since they claim to represent ‘the people’ writ large, they regard limits on their exercise of power as necessarily undermining the popular will. Such constraints can only serve the ‘enemies of the people’—minorities and foreigners (for right-wing populists) or financial elites (in the case of left-wing populists).

This is a dangerous approach to politics, because it allows a majority to ride roughshod over the rights of minorities. Without separation of powers, an independent judiciary or free media—which all populist autocrats, from Vladimir Putin and Recep Tayyip Erdoğan to Viktor Orbán and Donald Trump detest—democracy degenerates into the tyranny of whoever happens to be in power.

Periodic elections under populist rule become a smokescreen. In the absence of the rule of law and basic civil liberties, populist regimes can prolong their rule by manipulating the media and the judiciary at will.

Populists’ aversion to institutional restraints extends to the economy, where exercising full control ‘in the people’s interest’ implies that no obstacles should be placed in their way by autonomous regulatory agencies, independent central banks or global trade rules. But while populism in the political domain is almost always harmful, economic populism can sometimes be justified.

Start with why restraints on economic policy may be desirable in the first place. Economists tend to have a soft spot for such restraints, because policymaking that is fully responsive to the push and pull of domestic politics can generate highly inefficient outcomes. In particular, economic policy is often subject to the problem of what economists call time-inconsistency: short-term interests frequently undermine the pursuit of policies that are far more desirable in the long term.

A canonical example is discretionary monetary policy. Politicians who have the power to print money at will may generate ‘surprise inflation’ to boost output and employment in the short run—say, before an election. But this backfires, because firms and households adjust their inflation expectations. In the end, discretionary monetary policy results only in higher inflation without yielding any output or employment gains. The solution is an independent central bank, insulated from politics, operating solely on its mandate to maintain price stability.

The costs of macroeconomic populism are familiar from Latin America. As Jeffrey D. Sachs, Sebastián Edwards, and Rüdiger Dornbusch argued years ago, unsustainable monetary and fiscal policies were the bane of the region until economic orthodoxy began to prevail in the 1990s. Populist policies periodically produced painful economic crises, which hurt the poor the most. To break this cycle, the region turned to fiscal rules and technocratic finance ministers.

Another example is official treatment of foreign investors. Once a foreign firm makes its investment, it essentially becomes captive to the host government’s whims. Promises that were made to attract the firm are easily forgotten, replaced by policies that squeeze it to the benefit of the national budget or domestic companies.

But investors are not stupid, and, fearing this outcome, they invest elsewhere. Governments’ need to establish their credibility has thus given rise to trade agreements with so-called investor-state dispute settlement clauses, allowing the firm to sue the government in international tribunals.

These are examples of restraints on economic policy that take the form of delegation to autonomous agencies, technocrats or external rules. As described, they serve the valuable function of preventing those in power from shooting themselves in the foot by pursuing short-sighted policies.

But there are other scenarios as well, in which the consequences of restraints on economic policy may be less salutary. In particular, restraints may be instituted by special interests or elites themselves, to cement permanent control over policymaking. In such cases, delegation to autonomous agencies or signing on to global rules does not serve society, but only a narrow caste of ‘insiders’.

Part of today’s populist backlash is rooted in the belief, not entirely unjustified, that this scenario describes much economic policymaking in recent decades. Multinational corporations and investors have increasingly shaped the agenda of international trade negotiations, resulting in global regimes that disproportionately benefit capital at the expense of labour. Stringent patent rules and international investor tribunals are prime examples. So is the capture of autonomous agencies by the industries they are supposed to regulate. Banks and other financial institutions have been especially successful at getting their way and instituting rules that give them free rein.

Independent central banks played a critical role in bringing inflation down in the 1980s and 1990s. But in the current low-inflation environment, their exclusive focus on price stability imparts a deflationary bias to economic policy and is in tension with employment generation and growth.

Such ‘liberal technocracy’ may be at its apogee in the European Union, where economic rules and regulations are designed at considerable remove from democratic deliberation at the national level. And in virtually every member state, this political gap—the EU’s so-called democratic deficit—has given rise to populist, Euroskeptical political parties.

In such cases, relaxing the constraints on economic policy and returning policymaking autonomy to elected governments may well be desirable. Exceptional times require the freedom to experiment in economic policy. Franklin D. Roosevelt’s New Deal provides an apt historical example. FDR’s reforms required that he remove the economic shackles imposed by conservative judges and financial interests at home and by the gold standard abroad.

We should constantly be wary of populism that stifles political pluralism and undermines liberal democratic norms. Political populism is a menace to be avoided at all costs. Economic populism, by contrast, is occasionally necessary. Indeed, at such times, it may be the only way to forestall its much more dangerous political cousin.

Trump is finished but Trumpism may prevail

Image courtesy of Flickr user Cory Doctorow.

Donald Trump’s insurgent bid to win the White House is the political equivalent of a slow-motion car crash. Every aspect is a disaster; and the Republican Party is powerless to stop it. So big is the expected swing against The Donald that some experts even think Hillary Clinton and the Democrats could win traditional red states, such as Georgia, Utah and Arizona. That’s akin to the ALP winning safe Liberal seats, such as North Sydney in NSW, Ryan in Queensland or Sturt in South Australia.

Since the revelations of Trump’s extremely lewd conversation about women in 2005, the controversial casino and property magnate has made the most outrageous remarks that have shocked even the most seasoned observers of Washington politics.

In the past fortnight, Trump has sneered at the looks of a woman who accused him of sexual assault. He has suggested his opponent was on drugs during the second debate. He has alleged that she secretly plots ‘the destruction of US sovereignty.’ He has pledged to put her in jail. His response to at least 11 women making accusations of sexual harassment has been to say he didn’t need to apologise to his wife even though he had been caught, on tape, boasting about his sexual exploits. He has spent precious time and energy attacking leaders of his own party. On the weekend he vowed to sue the women who have accused him of sexual misconduct. All the while, he maintains that the ‘whole election is being rigged’ and that he would leave the nation in ‘suspense’ about whether he would recognise the outcome of the 8 November vote.

The brash billionaire’s behaviour, with many Republicans roundly condemning him, suggests he is as mean-spirited as he is unhinged. As a result, women, minorities, independents and college-educated conservatives are turning away in droves.

The Trump campaign has calculated that it can win the election by motivating unprecedented numbers of white voters as well as folks who don’t usually vote, especially in rust-belt states (Pennsylvania, Michigan, Wisconsin) that usually swing Democrat. But the past fortnight shows that even white men in battleground states are turning off Trump. Moreover, candidates still need to appeal to the aforementioned groups in order to secure the 270 electoral-college votes to win the White House. Bashing Clinton as corrupt, dishonest and a ‘nasty woman’ while whining that the media are helping her won’t wash with independents and women voters.

But although Trump will lose badly—and probably cost the Republicans control of the Senate, and perhaps the House (though the latter remains unlikely)—it’s important to reflect about the foul public mood that, until recently, has carried the former reality television star so close to power. It would also be a big mistake to assume normal programming will resume after 8 November.

A nation whose hallmark has been a sense of irrepressible optimism and purpose is bitterly divided and uncertain. Large pluralities think their country is heading in the wrong direction, that it’s in serious decline. Their trust in institutions is at an all-time low.

Many Americans have grown up knowing the US is the most powerful, most prosperous and the most influential nation in history, culturally and economically. They are coming slowly and painfully to realise that that’s no longer true.

In recent times, they have reached the conclusion that America’s political and economic systems no longer work for them. They have witnessed wage stagnation, widening income inequality and, since the Great Recession in 2008–09, the most sluggish recovery since the Great Depression of the 1930s. They are fed up with political correctness and sick of being unable to win any war anywhere. They lament that illegal immigration has changed the nation’s culture in ways they find repugnant. They blame free-trade deals and Chinese cheap labour for the loss of manufacturing jobs.

In short, they are angry, they fear they are losing the country they know and love, and they want someone to blame.

Metropolitan commentators—from The Washington Post and The New York Times to the major commercial networks—have frequently sneered at Clinton’s recent ‘basket of deplorables’ description. Yet many still don’t understand the Trump phenomenon. Although he’s an object of derision and contempt, the billionaire buffoon has repudiated an establishment that has become an entrenched class of politicians increasingly divorced from the public. As a result, he has tapped into real grievances.

It’s misleading to say his appeal is just due to racism and xenophobia. Nor is it fair to think this frustration and popular anger against the established order are confined to America: they are just as conspicuous across Europe. (Think of Le Pen’s National Front in France, or the Austrian Freedom Party, or Hungary’s Jobbik Party.)

The real tragedy of Trump is that his divisive rhetoric and erratic conduct, not to mention his thin skin and petulant ego, have obscured the legitimate reasons many Americans were drawn to his anti-establishment message in the first place. The upshot is that although Trump will lose on 8 November, Trumpism—an angry, populist backlash against globalisation, immigration, an internationalist foreign policy and political elites—may endure.