Economic inequality: cause and effect of populism?

Francesco Sorana
Photo by Pujohn Das on Unsplash
Published on December 20, 2019

The relationship between populism and inequality has become particularly salient not only due to the particular attention given to populist movements rising around the world, but also to the increasing importance that inequality plays in explaining populist successful performance. Inequality has become a key topic in both the populist narrative and the academic research on the causes and socio-economic impact of populist parties.

The concept of populism has been variously described as a thin-centered ideology, a political behavior, a consensus-forging strategy, a political style and a rhetorical communication strategy. Can Mudde provided one of the most authoritative and adopted definitions, that understands populism as a thin-centered ideology “that considers society to be ultimately separated into two homogeneous and antagonistic groups, the pure people’ versus ‘the corrupt elite’, and which argues that politics should be an expression of the volonté générale (general will) of the people”.

This definition has been subsequently understood as an: “ideology which pits a virtuous and homogeneous people against a set of elites and dangerous ‘others’ who are together depicted as depriving (or attempting to deprive) the sovereign people of their rights, values, prosperity, identity and voice”.

Populism is considered weakly linked to any particular ideology or political leaning and needs to adopt and rely on other “host-ideologies” such as right-wing nationalism or left-wing socialism that provide a set of political ideas and moral values. Nonetheless, populism usually presents five main aspects that highlight its specificity compared to ‘thicker’ ideologies. The first two aspects are related to the efforts of populist movements to represent the people as the only legitimate holder of sovereignty and as the purest part of society; the third aspect is the belief that society and governments are manipulated by occult or corrupted groups of very wealthy and powerful individuals that do not share the moral values of the real people and are therefore disinterested in their needs; the fourth key aspect is a dualistic and dogmatic vision of society as essentially divided into two parts, the first of which is embodied by the authentic people while the second is composed of all the others who are not part of the people and that inherently represent a threat to society, in a  basic us-against-them model of society; the last element is the yearning for a utopian community in the past – to which populist movements desire to return – in which there was only one undivided people and societies lived in peace and prosperity. This element has been called the populist heartland, a weakly defined earlier time in which “a virtuous and unified population resides”.

In general terms, left-wing and right-wing populism differ mainly on the framing of who actually ‘the people’ are. Leftist populists are more concerned on protecting ‘the common people’, understood as the poorer segments of society, against the corrupted oligarchy and transnational economic elites, thus framing the conflict on class-based and economic claims. On the other side, right-wing populist often consider the people from an ethnic and cultural point of view, thus excluding foreigners, ethnic minorities, migrant groups and individuals who do not share the same cultural and linguistic – and sometimes racial – roots of native citizens. Common to both sides is the stark opposition to pluralism and the rejection of international constraints to governments action. Through the different conceptualization of people it is possible to understand how opposition to pluralism assumes for populist movements a fundamental importance in the inclusion and exclusion of particular groups from the community of the ‘real’ people.

In order to understand if and how economic inequality is related to an increasing support for populist movements, to a more authoritarian attitudes in politics, we first need to study how economic inequality changed through time. In the mid-nineties, the disposable income of the 10% highest earners in OECD countries was 7 times higher than that of the lowest 10%. As of 2010, the gap had become more than 9 times higher.

“In recent decades, the real income of most people in developed Western nations has stagnated or declined; despite substantial economic growth, the gains have gone almost entirely to the top 10% of the population, largely to the top 1%. Economic inequality has been exacerbated by growing automation and outsourcing globalization and growing mobility of capital and labour, the erosion of blue-collar labour unions, neo-liberal austerity policies, the growth of the knowledge economy, and the limited capacity of democratic governments to regulate investment decisions by multinational corporations or to stem migration flows.”

As a result of this trend – which is also related to wealth inequality – in the OECD countries the average Gini index has increased in the same period by almost 10%.

It means that although OECD countries experienced an overall positive growth, the gains of progress went to increasingly smaller groups of exceptionally wealthy individuals. Therefore, countries experienced a higher overall inequality and wage gap between low and high-income workers. This in turn affected primarily the lower segments of the societies.

It may seem tautological, but when talking about inequality one must keep in mind that it affects individuals unequally. Everyone within a society, and moreover in a globalized world, experiences the negative effects of high levels of inequality, but poorer individuals and more socio-economically disadvantaged groups in poorer countries suffer more than others.

Income inequality has sharply increased in most developed and developing countries since the ‘80s, a trend that determined a transformation in the structure of political representation and socio-economic cleavages. Piketty recently argued that more inequality, instead of producing grievances for wealth redistribution policies as one would expect from inequality-affected individuals, facilitated instead the emergence of other forms of political complaint which are grounded on identity terms more than on class or economic ones. Populist, nativist, xenophobic and anti-establishment movements thrived while both left and right-wing parties have experienced a shift in their electoral base: left parties after the second World War were traditionally associated with less educated and poorer voters, in a class-based party system where individuals generally voted accordingly to the socio-economic class they belonged. During the ‘80s, left-wing parties became increasingly associated with the highly educated elite, what Piketty called the “Brahmin left”. In the same period the right-wing remained associated with the wealthy business elite, the “Merchant right”. In this situation, populism rise could be understood as a way to give voice and representation to the residual part of the society that does not feel represented by mainstream parties: the low educated and low income individuals. In his model, Piketty suggests three possible future scenarios:

  1. A shift from the left-right axis towards a globalist-nativist one, therefore producing socio-economic division on the basis of individual capabilities to access education and high-income jobs, rather than a political one
  2. The stabilization of the current Brahmin intellectual left vs Merchant business right shift
  3. The return to class conflict in Marxist terms, in which left-wing parties are generally supported by less educated and low-income voters, and right-wing parties represent the interest of the wealthier and educated elites.

Nonetheless, the effects of globalization and education-related issues seem to play a major role in all Piketty’s scenarios. How Western democracies will react to the challenges they face today will condition the socio-political transformations that will fulfill or deny Piketty’s forecasts.

Sources

Mudde, C. (2004), The Populist Zeitgeist. Government and Opposition, 39: 541-563, p. 543.

Albertazzi, D. & McDonnell, D. (2008). Twenty-first century populism: the spectre of western European democracy. Hampshire, England: Palgrave Macmillan.

Paul Taggart (2000), Populism, Buckingham, Open University Press.

Inglehart, R., & Norris, P. (2016). “Trump, Brexit, and the rise of populism: Economic have-nots and cultural backlash.”, American Political Science Association Annual Meeting, 1- 4 September, Philadelphia, p. 10 – 11.

Keeley, B. (2015), Income Inequality: The Gap between Rich and Poor, OECD Insights, OECD Publishing, Paris, p. 32.

Wilkinson, R. G., & Pickett, K. (2010), The spirit level: Why greater equality makes societies stronger. New York: Bloomsbury Press.

Wilkinson, R. G., & Pickett, K. (2018), The Inner Level: How More Equal Societies Reduce Stress, Restore Sanity and Improve Everyone’s Well-being, London, Penguin Books Ltd.

Alvaredo F., Chancel L., Piketty T., Saez E., Zucman G. (2018), World Inequality Report 2018, Harvard University Press.

Piketty T. (2018), Brahmin Left Vs Merchant Right: rising inequality & the changing structure of political conflict (Evidence from France, Britain and the US, 1948- 2017), World Inequality Database.

Doyle D., Ruth-Lovell S. P., Hawkins K. A. (2019), Consequences of Populism: The Guardian’s The New Populism Project.

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