A number of commentators in the mainstream media have recently lamented that authoritarian populism has been on the rise in Europe and in the United States, while apparently declining in Latin America—a region with a long history of this phenomenon. According to this perspective, while emotionally charged appeals to popular base emotions have now become predominant in the North, Latin Americans have sensibly turned to the political right, electing right-leaning political leaders with solid pro market credentials. There are some basic misunderstandings in this observation. While there are some startling commonalities in the origins of most populisms, there are also some very important differences in their recent manifestations.
Populism is, of course, a contested concept and one that has acquired pejorative connotations, particularly among economists who see its adherents as ignorant of sound economic policy, particularly in the area of government spending. The political science literature, on the other hand, identifies a number of political features as key to the phenomenon. These include charismatic leadership, a lack of respect for formal political institutions seen as controlled by an unresponsive oligarchy, the consequent desirability of a direct, often personal relationship between leader and followers, and the recognition of an enemy as responsible for the problems against which the movement is struggling. Hence, populism is much more about political style than policy content. In fact, populisms can span the political spectrum, from extreme left to extreme right and they can shift directions in mid-stream. Populisms arise in the face of political rigidity—particularly in contexts where political institutions fail to address popular aspirations, usually preceded by some sort of undesired change in social reality. Hugo Chavez (president of Venezuela, 1999-2013), and Donald Trump, are archetypical cases of radical left and right populism, respectively. Chavismo, now under the leadership of Nicolás Maduro, has had a disastrous outcome involving increasing repression and a profound humanitarian crisis. Trumpism is shaping up to be just as tragic, but in a different way.
Venezuela and Radical Left Populism
Venezuela’s democracy, prior to the rise of Chavez, was a problematic one—a pacted democracy in which the two major parties agreed to alternate in power and share the spoils of office. With the decline of petroleum prices in the late 1970s followed by the debt crisis, the country’s rulers adopted market liberalization. The socialist party, the Democratic Action Party (AD) turned away from its socialist agenda and instead pursued trade liberalization, privatization, and the removal of subsidies. Inequality shot up, poverty worsened and as popular disillusionment rose, Hugo Chavez stepped into the breach. Chavismo, rooted in support from the lower classes, railed against the country’s business and traditional political elites. Political polarization deepened. As long as international petroleum prices were buoyant, the regime was able to concede to popular aspirations and retain popularity. Poverty and illiteracy fell but without capitalist co-operation in expanding investment away from petroleum, the model was unsustainable.
Trump and Populism of the Right
Liberal democracies are not supposed to be subject to these sorts of emotionally based challenges; they are supposed to aggregate and reconcile conflicting demands. However, we need to remember that liberal democracies are, in the words of C.B. Macpherson, “systems of power,” whose purpose is to secure public quiescence. Liberal democracy works well as long as there is a close fit between the ideology of opportunity and the social reality. In the U.S., the Democratic Party’s abandonment of the traditional working class through trade agreements and labor flexibilization, was instrumental in eroding faith in the political system. Unemployment, the rise and expansion of precarious employment, and the presence of large numbers of immigrants, set the state for openness to a populist appeal.
Unlike Chavez, Trump quickly abandoned his popular base and cast his lot with powerful business interests, handing over senior government appointments to a cabal of Goldman-Sachs veterans. He has pledged to slash business taxes, scale back the Dodd-Frank Act, which provides oversight of Wall Street, and delay the fiduciary rule that would require financial advisors to have the best interests of their clients at heart when advising on retirement investment. His Supreme Court nominee, Neil Gorsuch, wants to free big business from any sort of monopoly constraint. President Trump is filling the swamp not draining it. At the same time, virtually nothing is being done on the job creation front. Instead, Trump’s popular appeal draws from his anti-immigration stance, and, more recently, from a newly found activist foreign policy geared toward “making America safe” by bombing small countries. Trumpism has become a particularly nefarious form of populism not only because of its medium to long-term harmful impact on the American political system (popular disillusionment will surely rise again and we do not know what form it will take), but also because of its potentially dangerous international implications.
Latin America’s Left Populism
While a number of the Latin America’s left governments of the 1990s and 2000s ended badly in the midst of economic crisis and corruption scandals (Brazil and Argentina), these regimes demonstrated considerable commitment to improving human welfare. Poverty and even inequality declined under the region’s left governments. There were also important successes in meeting the aspirations of indigenous populations, in those countries (Ecuador and Bolivia). Political reforms under Bolivia’s Evo Morales, for example, increased the political representation and participation of indigenous people. The economy experienced steady healthy economic growth rates and the poor, mostly indigenous, experienced a decline in deprivation levels and improved access to health care and education.
There were certainly populist features in these movements and regimes. However, populist rhetoric was generally mild. Indeed, in some cases the struggle to gain the quiescence of business interests was their undoing as left leaders failed to challenge corrupt practices that facilitated lucrative business contracts and high profits (practices that kept the business sector in line). Most of the left-centre governments (with perhaps the exception of Argentina), learned hard lessons from the economically unstable years of the 1960s, the debt crisis of the 1980s, and the hyperinflation of the 1990s, and opted for considerably greater fiscal prudence than in the past. While most now face fiscal deficits, they have not borrowed and spent with reckless abandon. Deficits are largely due to a sharp drop in commodity prices. The recent turn to the political right is by no means a positive development because these right regimes, with their faith in the market and implementation of austerity programs, may soon give rise to a another populist cycle—and that cycle may not be as sensible as the one of the 1990s and 2000s.
What these cases illustrate is that twenty-first century populism is deeply enmeshed in the currently failing economic order and the surprisingly resilient belief in the efficacy of the market. Left populists in Latin America attempted to challenge that order to varying degrees. As the Venezuelan case shows, an outright radical left onslaught is destined to fail. Right populism, however, is just as (perhaps even more) worrying: Trumpism appears to have abandoned the employment concerns of its working class popular base and instead is distracting the public by identifying domestic and international enemies. The Trump administration appears bent on a policy agenda that will increase the power and the wealth of the previously maligned owners of the swamp. This will not end well.