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In 2016, Year Zero of modern politics, much was read into the fact that it was the nations of Reagan and Thatcher that fell to the populists. A theory took shape. Decades of Anglo-liberalism had created deindustrialised towns, precarious middle-earners and a lavish, self-dealing overclass. Hence the revolt. Brexit and Donald Trump were the wages of laissez-faire.
This was always a tenuous explanation for public anger (why did the affluent home counties vote Brexit?) but a serviceable holding position until contradicting evidence showed up.
Well, behold it. Rightwing populism is ascendant in France, which might be the least economically liberal country in the rich world. Government spending there accounts for well over half of national output. The component that goes on social protection — cash benefits and so on — is likewise OECD-topping. On the other side of the Alps, the Italian state is not far behind on either overall or social spending. The hard right is not just successful there. It is the power in the land. Meanwhile, in Australia, where the government is smaller, the mainstream political parties are holding up. The centre-left governs.
There is no correlation between a country’s exposure to market forces and its degree of populist anger. The hard right is flourishing in social democracies and in more market-centred ones; in regions that are poorer than their nation’s average, such as the German east, and in regions that are much richer, such as the Italian north; in countries that have experienced government cuts (Britain) and in ones that have spent at will (the US); in places where manufacturing has collapsed over the decades and in places where it hasn’t.
The last of these points is worth dwelling on. Manufacturing accounts for 18 per cent of German GDP, next to the 10 or so in Britain and America. That economic model is hailed (every know-nothing in Westminster knows the term “Mittelstand”) for creating high-status work for non-graduates. As deindustrialisation leaves behind lots of desperate towns, ripe for populist cultivation, it follows that Germany should be a sanctum of civic calm.
Instead, the nation has not just one of the largest hard-right parties in the major democracies now, but perhaps the most strident. And if that is odd, consider next door Austria, which might be the most confounding case study in the west. It has one of the highest levels of public spending and a manufacturing sector almost as large as Germany’s and a rampant hard right.
In all candour, even I — coursing with liberal biases — scratch my head here. I’d expect at least a loose correlation between the economic freedom of nations and their susceptibility to the political extremes. But the evidence is what it is. Populism can’t be understood as a howl against laissez-faire. And it shouldn’t have taken recent events to bring this home. The hard right was getting to presidential run-offs in France as far back as 2002, long before whatever marginal trims Emmanuel Macron has made to the social contract.
If pinning the hard right on market economics were just an academic error, we could leave it alone. But it has led to a real-life miscalculation of world consequence.
If Joe Biden loses re-election in November, one question will need answering above all. What possessed the Democrats to think America wanted or needed a statist economic transformation? The slogan “Build Back Better” implies a widespread unhappiness with the pre-Covid world that didn’t exist. On the eve of the pandemic, economic confidence was at an high not seen since the millennium. Satisfaction with the “way things are going in the US” was where it was in the mid-1990s and mid-2000s. Leave aside the economic or security case for Biden’s government-led re-industrialisation. The politics are mystifying. The main effect of the spending has been to implicate him in inflation.
Biden’s job was to end the commotion of Trump and the pandemic. Going off on an expensive and voteless adventure in Americanised Gaullism was never necessary.
So why did it happen? Partly because, deep in the left’s gut, there is a belief that something called “neoliberalism” created the conditions for Trump. Remove it, and you remove over time much of the hard-right threat to the republic.
“Gut”, I say, because this notion wouldn’t last a minute in the head. Trump emerged after Obamacare and the bank bailouts: two of the largest federal interventions in private economic life since Lyndon Johnson. His precursor was the Tea Party, whose grievance was too much government, not too little. Framing the market for populism made a sort of superficial sense in 2016. In 2024, it invites ruin.
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