Some thoughts on populism… How did we get here?

The Anglo-American democracy problem

This is a great read on some thoughts about why populism is growing in the U.S. and U.K. and subsiding in other nations. About a year ago my biggest fear was that the world would be taken over by populists and ultimately turn into a populist economy. This was, and still is, my biggest long term fear because populist policies will restrict global trade and globalism. This would be the worst case scenario for economies on a regional and global scale.

In any event, Luce points out three possible reasons populism in the U.S. and U.K. have been more sticky. The first is that in these two countries promote the idea that they are true meritocracies. This means that everyone is told they have an equal chance to reach the top if they develop and prove their skills are useful. Now, while I believe this is true to an extent (perhaps I am falling into the trap of over estimating my chances of success?), the data paints a different picture.

income mobility

As you can see above, over time the percentage of children surpassing their parent’s income has decreased meaningfully. Now, this brings up a deeper conversation on technological change and wages, but for now I will leave those to the side. Most importantly, the idea that a true meritocracy exists is great, except for the fact that the majority of people perceive this is a lie. And when they feel they have been lied to they will revolt (or vote) against the elites who keep them in their lowly class. Now, something can be said about the irony of voting in a wealthy man who promotes the class system within his business… But that’s another day.

Similarly, the article states that the elites in the U.S. and U.K. have lost faith in half of the population. This is because they misunderstand qualifications. They believe that anyone without a college degree is absolutely useless. While this might be true for some people, there are a lot of people without college degrees who are capable of meaningful work. But the fact that those without a formal education are frowned upon contributes to populism because they feel left out and stepped on by the elites (and those with formal education). It is no surprise that this was the group who voted for Brexit and Trump. Again, the irony of this is thick.

And the final reason the article mentions is complacency. This comes from the fact that both countries have been stable for over 100 years. This means that the political figures have ignored the population for too long. Over time this builds populist beliefs. My hope is these beliefs subside. Aside from the economic issues with populism, the violence that would stem from a populist revolt is unnecessary. There are better ways to solve our problems.

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