Populism and the economy: tackling the roots of public discontent
A disconnect between government policies and citizens’ concerns is fuelling support for populist parties in Europe, analysts say. But the EU is struggling to find a response to calls for an overhaul of taxation, and of democracy itself.
"Fear now blocks rational deliberation," said Máriam Martínez-Bascuñán, opinion editor with Spanish daily El País. "Many people feel powerless and unable to control their lives," she said, commenting on a surge in support for so-called populist groups like Podemos and Vox in Spain.
"I think this [support] is based on real problems," she said. "There is a feeling of panic, which leads to blaming different groups - immigrants, ethnic groups, and women."
Podemos is a left-wing party, founded five years ago, in part in response to the Eurozone debt crisis and in protest against austerity measures. It is now the second largest group in the Spain. Vox sits on the other side of the political spectrum as a right-wing split from the People's Party. This year it won three seats in the European Parliament.
Martínez-Bascuñán said the existence of both left and right-wing populist groups showed that "populism is not an ideology, but rather a logic."
Manuel Muñiz, Dean of the IE School of Global and Public Affairs, said the rise of support for populist groups was part of a "very extraordinary moment" in political history, which went well beyond the borders of Europe. "We are facing questions from outside and a real fundamental shift within."
"We are facing two forces," he explained. One force is "external", with China as its main component. "This is a real challenge to democracy," he said, thanks to Beijing’s use of big data and a centralised authoritarian regime. "Now China is saying 'We can know what our citizens want without the messiness of democracy,'" said Muñiz, who is also Rafael del Pino Professor of Practice of Global Transformation.
The second "force" facing politics and economics today is "in Europe, a growing lack of faith in institutions, a growing scepticism about open borders, free trade and even liberal democracy."
"A growing number of people, especially the young, are questioning the value of democracy," Muñiz said.
Populism is not a simple economic problem, he said. The US, Spain and the UK, which have seen support for some of the most high-profile populist politicians, are back at pre-economic crisis levels of GDP, but at the same time see record levels of job insecurity. "We are not suffering an aggregate growth problem," Muñiz said. The troubles fuelling support for populist policies could more easily be seen at the micro level of voters' lives and expectations.
He recommended that governments "adjust education policies. There are literally millions of jobs we can't fill in the EU because people don't have the skills."
Accompanied by a shift in tax policy, a redistribution of social support, and an overhaul of the role the private sector plays in the economy could help address some of those concerns currently feeding support for populist groups.
"There's a battery of measures that can be taken that would reduce social and economic costs," Muñiz said.
But Sarah Durieux, Executive Director France for campaigns petitions website Change.org, warned against focusing on populist parties at the expense of people supporting populist causes. Durieux said the citizens' voice needed to be heard more clearly in political and economic debate.
In France, she said, the yellow vest movement, which saw riots over rising living costs and government tax policy, "is connected to citizens’ fears of not being heard."
I would not call this a populist movement, or a racist movement," she said. An early "gilets jaunes" petition was launched on change.org by a 34-year-old woman selling organic cosmetics, who had noticed the cost of fuel needed to travel to clients was rising. She realised that the rising cost was down to rising taxes, which the government said were needed to finance the economic transition to a cleaner economy - and saw "nothing was invested in ecology."
"This is the feeling of miscommunication between the elite and the people," Durieux said. "If you want to raise taxes for your budget: say so. Don't say it's for ecology."
"There needs to be some logic to taxation." Durieux said, telling governments to listen to people's concerns. "Citizens are experts on what they are living every day."
She agreed that the yellow vests protest was slowing down in France, but that the anger needed to be addressed by governments. "We should go back to local communities and see how we can support them."
"What happened will happen again if we don't take action," she said. "That feeling of citizens that something needs to be done did not go."