Winner of the New Statesman SPERI Prize in Political Economy 2016

Thursday, 15 December 2016

What are populist policies?

Populist is a term like neoliberalism: vaguely defined and used as a derogatory term. A key aspect of populism involves attacks against elites, and as Jan-Werner Müller stresses this goes with populists identifying with ‘the people’. The populist does not want any kind of direct democracy, but instead argues that they (and only they) are uniquely qualified to ensure that the will of the people prevails. This ties in both with identity politics, but also an emphatic denial of the importance of different people with different interests.

But populist is a term used about policies as well as certain political leaders, and is often applied to policies proposed by conventional (not populist) leaders. Is this simply a term of abuse, or is there some systematic logic behind such claims? I do not think those that use the idea of a populist policy simply mean a policy that might be invoked by a populist politician. 

I can think of two meanings, beyond the obvious that populist policies have to be popular. The first is that a populist policy is harmful to society on average, even though it might be beneficial to a significant sub-group within society. The second is stronger: a policy that will be harmful to almost everyone. Economists will see the parallel with Kaldor Hicks and Pareto welfare measures. I want to suggest that in practice only the second, stronger version has any teeth.

One set of policies that are frequently called populist in the first sense are specific trade barriers, designed to protect a particular domestic industry against foreign competition. These are obviously popular with those whose jobs are threatened. Using populist in the first sense notes that the economy as a whole gains from cheaper imports, and these gains are large enough to compensate the losers in the domestic industry such that everyone could be better off. But to use populist as a derogatory term in this context only really makes sense if the transfers that would compensate the losers are sufficient to do so, and fairly certain to be enacted. If they are not, then maybe trade protection measures are popular because people really do want to avoid the pain caused by domestic job losses, and are prepared to forgo any gains to see that happen.

Brexit would seem to be a good example of a populist policy in the second sense, where the number of people who will actually gain from the measure are pretty small. Its popularity comes from people incorrectly thinking they will be no worse off as a result of Brexit, when in truth they will be (or indeed they already are, as the Brexit induced depreciation feeds into higher prices and, almost certainly, lower real wages). Before the vote, polls showed that a large proportion of those intending to vote to leave the EU were not expecting to be worse off as a result, and more importantly they would vote differently if they thought they would be worse off, a result recently confirmed by a YouGov poll reported in the Guardian. In my view that was what made the media’s trashing of the economic case against leaving so crucial: it is what made Brexit a populist policy in the sense that I want to use the term.

Is Brexit an example of a populist policy promoted by non-populist politicians? Only in part. Major drivers behind Brexit were the right wing tabloid press and UKIP. They are clearly populist using Müller's criterion, as they show every time they invoke the ‘will of the people’ to attack judges who are simply trying to uphold the rights of parliament.

A clearer UK example of a populist policy driven by non-populist politicians might be austerity. This was popular, in the sense that most people thought the government ought to tighten its belt because it had maxed out its credit card, but it also did most people a lot of harm. I calculated that UK austerity lost the average UK household at least £4,000, and the true figure could easily be two or three times that, and it is difficult to see a large section of the population who gained.

Do populist policies promoted by conventional (non-populist) politicians have anything to do with the rise of populist politicians? Perhaps they do, when it turns out that populist policies do in reality make people worse off. That can discredit conventional politicians and open the doors to populists. I provide one example of that in this SPERI post, which links Brexit to austerity.




5 comments:

  1. I would like to draw a sharp distinction between "populism" and the expression the author compares it with, "neoliberalism". It seems to me that the former is an unhelpful term whereas the latter is not. Populism lacks any clear meaning. People on the left tend to characterize as populist illiberal attitudes such as xenophobia, hostility to immigrants, the desire to bring back the death penalty or a more general willingness to transgress against the rights of individuals or the rule of law. But if one reads the Financial Times, one discovers that a populist is someone prepared to pursue policies that lead to the redistribution of wealth. Populism appears to mean simply something that is popular and that the speaker doesn't like. By contrast, "neoliberalism" has a fairly clear meaning, especially by the standard of political "isms" whose meaning in general tend to be ambiguous and contested (compare "neoliberalism" in this respect with "liberalism" tout court, "socialist", "social democratic" etc). Neoliberalism is, roughly speaking, the belief that the market is the best form of social organization and that the optimum solution to most problems is a market one. Its high priests are Hayek and Milton Friedman. Of course, it is true that the term is used most often by the enemies of the thing it refers to and perhaps for this reason, many people who support neoliberal policies don't like the term. It is also often asserted (as Simon half does above) that it doesn't have much meaning and is simply an empty form abuse (someone said something of this sort in answer to an earlier entry about neoliberalism on this blog). But this seems to me to be a rhetorical strategy on the part of neoliberals. Denying that the term refers to anything in particular makes it appear that the policies that critics call "neoliberal" are just common sense and tends to deny and obscure the possibility that there might be other viable approaches to politics and the economy.

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  2. I meant to add that the term "populism" is also suspect in a democracy. It carries the implication that what is popular must be stupid - in other words, that the common people ought not to be allowed to vote.

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  3. Does your £4000 figure account for changes in house prices? Surely nny home owner has benefited greatly from the austerity era.

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  4. I see we're back at our disagreement over the EU referendum result: you went for press 'power without responsibility' and I went and am still backing 'power with responsibility', that the press will be called out for the lies they have told.

    To have ditched the City in favour of the political legacy of the ERM crisis was not a sign of strength by rightist press barons in 2016, it was desperation in the face of falling circulations.

    The sarsaparilla is running dry in the last chance saloon.

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  5. Don't the pieces, by Mody and by Krugman, that you discussed on October 14th argue well that Brexit is populist in the first of the two senses you give here? EU membership has led to over-reliance on financial services industry, damaging other areas of the economy. Certainly there are ways to address this without leaving EU but there is insufficient political will for those other steps to be taken.

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