Why didn't democratic political systems react in time to the sources of dissatisfaction that authoritarian populists successfully exploited: the growth of inequality and economic difficulties, the decline of social status, the split between elites and ordinary citizens? If political parties (especially those of the center left) had implemented bolder policies, it would probably have been possible to avoid the rise of extreme right and nationalist political movements.
In principle, the growth of inequality creates the issue of redistribution of income. Democratic politicians must respond to this by raising taxes for the rich, and spend the revenue to help the less wealthy. This immediate observation is well described in a very famous political-economic article by Alan Meltzer and Scott Richard: the larger the gap in income between the average and median voter the best elements of both options, ed.), the higher the taxes and the greater the redistribution of income.
However, democratic countries in practice moved in the opposite direction. The income tax scale fell, reliance on regressive consumption taxes increased, and the level of capital taxation was determined as the global competition for the lowest taxes proceeded. Instead of increasing infrastructure investment, governments pursued a policy of cutting government spending, which hit workers with lower qualifications particularly hard. The state provided financial assistance to large banks and corporations, but not to households. In the USA, the amount of the minimum wage was slightly adjusted, which led to its real decrease.
One of the reasons for this - at least in the USA - is that the Democratic Party supported identity politics (with an emphasis on inclusivity - gender, racial, and also from the point of view of sexual orientation), as well as other liberal social ideas, all to the detriment of everyday people. issues of earnings and jobs. As Robert Kutner notes in his new book, there was one thing missing from Hillary Clinton's platform in the 2016 presidential election - social class.
One explanation: Democrats (and left-of-center parties in Europe) have become too loyal to "big finance" and big corporations. Kutner details how Democratic Party leaders made an open decision to listen to the financial sector after Ronald Reagan's election victory in the 1980s. The big banks gained special influence not only because of their financial power, but also because of their control of key positions in the Democratic Party administration. The economic policy of the 1990s could have taken a completely different path if Bill Clinton had listened to his minister Robert Reich, a scientist and defender of progressive politics, and less to the Treasury Secretary Robert Rubin, the former chief manager of Goldman Sachs.
However, the interests of big business only partly explain the decline of the left. Ideology played an equally important role. When the Keynesian consensus of the post-war era disintegrated after the market supply shocks of the 1970s, and progressive taxation and the European welfare state fell out of fashion, the vacuum was filled by market fundamentalism (also called neoliberalism) in the variant insisted on by Reagan and Margaret Thatcher. This new wave has obviously captured the imagination of the voters.
Instead of creating a convincing alternative, left-center politicians were completely enthralled by these new ideas. Clinton's New Democrats and Tony Blair's New Labor acted as leaders of globalization. In an inexplicable way, French socialists have turned into supporters of loosening controls over the international movement of capital. They differed from the right only in promising sweet pills in the form of increased spending on social programs and education, but these rarely became reality.
The French economist Tom Piketty recently documented an interesting transformation of the social base of the left parties. Until the end of the 1960s, the poor mostly voted for left-wing parties, while the rich voted for right-wing parties. Then the left-wing parties fell under the control of a well-educated elite, whom Piketty calls "left-wing Brahmins", distinguishing them from the "merchant" class whose members continue to vote for the right. Piketty proves that such separation of the elite insulated the political system from demands for income redistribution. "Left Brahmins" have a negative attitude towards redistribution because they believe in meritocracy, that is, in a world where hard work is rewarded, and low incomes are probably the result of insufficient effort, but also bad luck.
Those ideas about the way the world works influenced non-elite voters, dampening demand for income redistribution. Despite the conclusions of the Meltzer-Richard model, ordinary American voters do not seem particularly interested in raising the top marginal tax rate or increasing welfare benefits; at the same time even in cases where they are aware of the sudden growth of inequality and when they worry about it.
This apparent paradox is explained by the low level of voter confidence in the government and its ability to solve the problem of inequality. A group of economists concluded that respondents who were asked about lobbyists and financial support provided by the state's Wall Street show a significantly lower level of support for measures aimed at fighting poverty.
In general, trust in the US government has declined since the 1960s, regardless of individual ups and downs. The same tendencies can be seen in many European countries, especially in Southern Europe. This means that progressive politicians, who are in favor of an active role of the government in changing the economic opportunities of citizens, have a tough fight for voters ahead. And the timid reactions of the left forces can perhaps be explained by the fear of losing the battle.
However, the main conclusion from recent research boils down to the following: ideas about what government can and must do are not immutable. These views change under the influence of arguments, experience and changed circumstances. This conclusion applies to both elites and non-elites. However, the progressive left, capable of opposing nationalist politics, must offer not only good politics but also convincing ideas.
The author is a professor of international political economy at the John F. Kennedy School of Government at Harvard University
Copyright: Project Syndicate, 2018.
Bonus video:
