Populisms (III): What Can We Do?

We’ve reviewed what the experts say about populism. Not all of it is applicable in every situation, nor does every populist movement encompass the exact same characteristics. Nonetheless, populism remains dormant and, to the extent that it denotes a breakdown in the liberal democratic model, it isn’t likely to disappear any time soon. It could lose steam, however, if the underlying economic problems are resolved.

At any rate, I’ll conclude with some recommendations, although voiced without much enthusiasm:

  • We shouldn’t ignore populism since it’s highly contagious, shapes political systems and induces other politicians to adopt its methods and means.
  • We need to measure our words more carefully. When Donald Trump – considered by many as the epitome of a populist leader – won the U.S. presidential election, a newspaper associated with the Democratic establishment stated that Trump had pitted low-skilled white workers, angry over their loss of privileges, against dynamic and intelligent young voters, who represent the country’s hope for the future. If someone feels neglected or mistreated, let’s start off by putting ourselves in their shoes and considering where they might have a point.
  • It’s time to revise our macroeconomic, taxation, industrial and commercial policies. This is true for both countries and companies. It’s not a question of rising salaries or being more generous with unemployment benefits, it’s about exploring how we can develop strategies that don’t cause unnecessary damage.

No one has the right to assume that their standard of living will continually rise, nor the right to get angry if their net income remains stagnant for years on end. That said, it is equally true that “someone” should break the news to them.

Perhaps it was a business owner who tried to multiply sales year after year, a management guru in search of media attention or an economist who claimed that GDP growth should be the ultimate aim of government policy without ever stopping to think about the negative ripple effects that this measure could unleash.

Globalization, technological progress and tax reductions elevate the quality of life of society as a whole; but in the short term, they deliver a direct blow to certain pockets of the population, especially in rigid labor markets that hinder the unemployed from quickly finding a new job. All of this is happening because we live in a good economic system, although not a perfect one.

Originally published on the blog “Economía, Ética y RSC” 

About Antonio Argandoña

Antonio Argandoña is Emeritus Professor of Economics and holder of the "la Caixa" Chair of Corporate Social Responsibility and Corporate Governance at IESE. He teaches mainly in the areas of macroeconomics, monetary economics and international economics, and publishes research on business ethics, corporate social responsibility and organizational governance.