KenH
Well-Known Member
"Populists exploit economic grievances and cultural anxieties. But their policies make both worse."
"Economic populism has swept the West since before former President Donald Trump entered the political arena. What once began as a ripple of populist sentiment has surged into a wave of protectionist platforms enchanting leaders on both the left and right. Our international order has crept closer to our mercantilist past as a result, diminishing economic growth and increasing tensions among nations.
There are countless theories that could explain such an inward shift, but I’ve whittled them down to what I believe are the three best explanations that capture our current moment.
1. Fall in Global Economic Inequality
One possible explanation for the surge of economic populism in the West is the narrowing of global economic inequality. As poorer nations catch up, wealthy nations view themselves as falling behind in the race for economic hegemony.
...
2. Special Interest Groups
When Mancur Olson published his influential 1982 book, The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities, many Western countries were exiting a serious stage of economic malaise, marked by high inflation and unemployment. Olson attributed this era of stagflation to the rise of “distributional coalitions,” or special interest groups who clamor for industry-specific regulations so they can prevent would-be competitors from chiseling their profit margins. As nations develop over time, special interest groups become more prevalent and organized, reducing innovation and economic growth.
...
Economic populists harness these internal causes of growth decline and redirect them toward “outsiders” — developing nations who are supposedly sapping the West of their economic potential. Mancur Olson’s theory of special interest coalitions gumming the engines of economic growth has presaged the economics of grievance luring the West into their populist stupor.
3. Identity Crisis
The attraction of economic populism has become so alluring because it addresses deep social and cultural concerns shaking Western nations worldwide. Traditional “globalists” — and even many classical liberals — have failed to speak the language of economic populists, whose platforms speak directly to feelings of lost national identity and social cohesion. As AIER’s Samuel Gregg writes in his book, The Next American Economy: Nation, State, and Markets in an Uncertain World, classical liberals have an opportunity to reintroduce the ideas of free enterprise in ways that address long standing social and cultural unease. In fact, Gregg argues that the very case for free markets needs to be “wrapped into a broader story about America.”
...
There are many factors contributing to the avalanche of economic populism in the West. The three explanations I present here are not intended to be exhaustive, but merely to serve as a guide to diagnosing the leading causes of economic populism in our age.
...
Addressing these root causes of economic populism through the lens of classical liberalism will require careful choreography, but we must advance the principles of free trade and permissionless innovation if we are to inspire faith in human progress and national flourishing."
- rest of article by Michael N. Peterson at Why Economic Populism Is Sweeping the West | The Daily Economy
"Economic populism has swept the West since before former President Donald Trump entered the political arena. What once began as a ripple of populist sentiment has surged into a wave of protectionist platforms enchanting leaders on both the left and right. Our international order has crept closer to our mercantilist past as a result, diminishing economic growth and increasing tensions among nations.
There are countless theories that could explain such an inward shift, but I’ve whittled them down to what I believe are the three best explanations that capture our current moment.
1. Fall in Global Economic Inequality
One possible explanation for the surge of economic populism in the West is the narrowing of global economic inequality. As poorer nations catch up, wealthy nations view themselves as falling behind in the race for economic hegemony.
...
2. Special Interest Groups
When Mancur Olson published his influential 1982 book, The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities, many Western countries were exiting a serious stage of economic malaise, marked by high inflation and unemployment. Olson attributed this era of stagflation to the rise of “distributional coalitions,” or special interest groups who clamor for industry-specific regulations so they can prevent would-be competitors from chiseling their profit margins. As nations develop over time, special interest groups become more prevalent and organized, reducing innovation and economic growth.
...
Economic populists harness these internal causes of growth decline and redirect them toward “outsiders” — developing nations who are supposedly sapping the West of their economic potential. Mancur Olson’s theory of special interest coalitions gumming the engines of economic growth has presaged the economics of grievance luring the West into their populist stupor.
3. Identity Crisis
The attraction of economic populism has become so alluring because it addresses deep social and cultural concerns shaking Western nations worldwide. Traditional “globalists” — and even many classical liberals — have failed to speak the language of economic populists, whose platforms speak directly to feelings of lost national identity and social cohesion. As AIER’s Samuel Gregg writes in his book, The Next American Economy: Nation, State, and Markets in an Uncertain World, classical liberals have an opportunity to reintroduce the ideas of free enterprise in ways that address long standing social and cultural unease. In fact, Gregg argues that the very case for free markets needs to be “wrapped into a broader story about America.”
...
There are many factors contributing to the avalanche of economic populism in the West. The three explanations I present here are not intended to be exhaustive, but merely to serve as a guide to diagnosing the leading causes of economic populism in our age.
...
Addressing these root causes of economic populism through the lens of classical liberalism will require careful choreography, but we must advance the principles of free trade and permissionless innovation if we are to inspire faith in human progress and national flourishing."
- rest of article by Michael N. Peterson at Why Economic Populism Is Sweeping the West | The Daily Economy
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