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What do the following three things have in common? Vermont senator Bernie Sanders’s position on seeking to raise the American national minimum wage to $17 an hour, Marine Le Pen’s (Leader of the National Rally) pledge to protect the 35 hour working week, and former President Trump’s promise in his successful 2016 election campaign to reinstate 4 million jobs in the manufacturing sector. Yes, you guessed it, the answer is populism.
Populism, as defined by Eatwell and Goodwin in their book National Populism: The Revolt Against Liberal Democracy, is outlined as “prioritising the culture and interests of the nation” often going as far as “promising to give a voice to people who feel neglected…by distant and often corrupt elites”. This political ideology prides itself on putting the hands in the power of the masses and understanding the popular consensus. It often capitalises on fears of immigration and warns of globalisation whilst pushing an agenda that supports patriotic pride and nationalism and promising better employment opportunities and higher wages for the average person.
But what does this mean in practice?
By 2016, the top 10% of earners in Europe earned 9.5 times that of the bottom 10%. In addition to this, according to the US Bureau of Labour Statistics, the percentage of hourly-paid workers earning minimum wage had declined from 3.3 per cent in 2015 to 2.7 per cent in 2016. Many believed that rising globalisation and immigration were the culprits of rising social inequity and were thus easily wooed by the confident Republican nominee who pledged massive tax cuts, particularly to the middle classes (which he achieved in the 2017 GOP tax bill that brought a $1,600 to the average American household) and was seen as being able to capture the national interest. Across the pond in France, the right-wing nationalist and populist party, National Rally (formerly National Front), saw a 9.4% increase in its vote share between 2012 and 2017. In the party leadership transition from incumbent Jean Marie Le Pen to his daughter Marine, she made strong pledges supporting autarky and promised to nationalise motorways in order to provide jobs for French citizens. She challenged what she referred to as “unregulated globalisation”, characterising it as an enemy of the people. It is rather clear to see how the economic policies of populist parties and political leaders have become intrinsically linked to electoral gains, shown with the election of Trump and rise in support for Le Pen (she gained 10 million votes in 2017).
Now it would be a mistake to presume that populism didn’t suddenly appear in the last decade. Arguably populist economic policy began to gain significant popularity in Britain in the middle of the 20th century. Under the Churchill government, Chancellor of the Exchequer Rab Butler, spearheaded the age of affluence, following the 1947 convertibility crisis. Key fiscal policy in his tenure featured the Industrial Charter of 1947, which supported the need for high levels of employment as being key for the mixed economy as well as strongly opposing trade protectionism to boost growth. Also, key in the period were pledges of a “property-owning democracy”, referring back to Eatwell and Goodwin’s idea of “prioritising the national interest”. The policy saw the Conservative Party building 2,500,000 new units which were vital and directly in line with the post-war consensus.
Now, as to whether or not these policies were the right thing to do for the economy is another question entirely. Sceptics argue that the Conservatives’ switch to supporting right-wing populist policies was key in differentiating themselves from the Labour Party. Following Keyne’s prediction of Britain heading towards a “financial Dunkirk” coming true with increasing government debt which forces the Attlee government to agree to a direct sterling convertibility as a condition of a 3.75 billion dollar loan borrowed from America to fund the NHS, Labour became known as the party of austerity. It was vital that over the next 13 years of Conservative political dominance, the Conservatives decidedly set themselves apart from the Labour Party and began to support populist policy abandoning their “laissez-faire” fiscal policy approach of the free market which had long defined the party’s identity. This wasn’t merely a coincidental shift in the party’s economic stance but one fueled by political motivation and the desire to be seen as being on the “right side of the people”.
We can see from the electorate’s favourable responses to populism in a contemporary context. From a 52% leave vote in the 2016 Brexit referendum based which claimed job scarcity to be caused by an influx of immigrants to Trump's victorious 2016 election campaign which largely blamed increasing levels of immigration as strenuous on the public sector, we see how the economic policies of populism can bring about significant turning points in our democracy. Particularly in the context of an upcoming 2024 general election with both major UK parties moving their economic policies away from their traditional ideological patterns, Starmer’s increasingly centrist Labour party and Sunak’s increasingly populist Conservative government suggest that this ideology is far from departing.
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