Prominent economists express regret over neglected approaches, highlighting the need for pluralism and critical reflection in economics.
Following Karl Polanyi’s classic The Great Transformation we can understand how increased economic pressure through marketization and individualization contributes to the emergence of countermovements that, explicitly or implicitly, aim to preserve social cohesion. Historical examples for such countermovements may be bright (as in the case of the New Deal or the development of European welfare states), while others are seemingly darker (like, e.g., Nazi Germany or fascist Italy). At first sight, brightness might seem like a subjective concept here, but my intuitive understanding is that it is eventually governed by how narrow the respective movements conceptualize the ‚we’ that underscores their understanding of social cohesion in the first place. The reason for this is, simply, that narrow conceptions of ‚we’ can quickly undermine moral universalism and, hence, transgress into a lack of dignity for ‚others’, however conceived.
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Against recent elections results, both in the US and elsewhere, Polanyi’s perspective is of some merit to rationalize how and why economic developments and aspects impact electoral attitudes. A better understanding of how exactly feelings of economic insecurity interact with other core factors in recent elections, like increasing misogyny and racism or the rise of fake news and highly polarized modes of public debate, is probably needed. Still, I would assert that economic factors, like the decade-long increase in inequality paired with rising prices for basic goods, also played a key role in these elections (see also here for a similar take on 2016). In my view many people have the impression that the current system does not work in their favor (which is probably not too far off ;-), so they are going for some alternative, even if it might have bad smell.
If populist and anti-democratic forces gain more traction two main fields of tension will, in my humble view, be important to observe in the near future: the first is essential on a very general level and relates to the differences between rhetorics and reality. For both, radicalized ‚populist’ parties in Europe and the coming Trump administration it remains to be seen to what extent (or how quickly) their anti-democratic rhetorics tanslate into tendencies to actually dismantly democratic institutions and procedures. Opportunities for doing so are now there (e.g. in the US or Italy) and will probably come with greater frequency in the next years.
The second tension is more directly related to economics: as European populist parties often have a contradictory stance, combining cohesive, inclusive rhetoric with a rather libertarian take on economic policy issues, they are often quite compatible with standard economics in economic policy terms (but typically will have little interaction due to cultural differences). The situation is different with the coming Trump administration, which seemingly considers to implement some policy measures that could strengthen the position of the US middle class. Although only a small part of these policies can be rationalized (like increased trade regulation), while other seems highly disruptive (like expanding fossil sectors), it allowed the Republicans to create a narrative on how do to things differently – also in economic terms.
All in all, it remains that narratives about economic alternatives seemingly can gain traction in the current environments. Although we probably still need to find one that convincingly integrates ecological and social concerns on a sincere democratic basis, this is one of the very few optimistic conclusions I drew these days. I hope you understand the urge to share that one ;-)
