Making America great again
Donald Trump will become the 45th president of the United States. I am not surprised. In fact, I predicted this outcome. Well, to be perfectly honest, I didn’t really predict that Trump would win this election. Like everybody else I was influenced by the polls (which have proved once again to be useless) and by my own opinion that Trump was unfit to be president (I am not a big fan of Hillary either; it was the dilemma of choosing the lesser evil).
Let me explain, four years ago I was invited to speak at the Beijing Forum, an annual gathering of academics, intellectuals and political leaders from all over the world. The theme was “Challenges and Opportunities” in the aftermath of the global financial crisis and the title of my presentation was “Lessons from Argentina for a world in crisis”. My conclusion was that unless governments in the developed world did something to reduce growing levels of income inequality there was a serious risk of a populist backlash like Argentina had with Juan Perón in 1946. With Trump’s victory my worst fears have been confirmed.
Marx once said that great men and great events in history tended to repeat themselves, first as a tragedy and then as a farce. It would seem the order has been reversed. The United States is now putting on stage a tragedy inspired by a farce that has been repeatedly played out in other countries. Make no mistake, Donald Trump is a populist. This statement may not be totally helpful to readers. Sociologists, political scientists, economists and historians debate endlessly about the meaning of the term “populist”. So it is important to understand what we are talking about and why it matters.
“Populism is not an ideology but a way of doing politics,” warned the late Ernesto Laclau, one of its most fanatical ideologues and promoters. As long as those “at the bottom of the scale” have unsatisfied demands and oppose the establishment, populism will exist he wrote. But as Laclau rightly pointed out, the opposition to the establishment can be articulated from the left or the right. That explains why any list of populist leaders would include Hitler and Chávez, as well as Donald Trump and Bernie Sanders, to name just a few.
I define populism as the supposedly easy, arbitrary, simplistic and costless solution to structural problems imposed by an electoral majority when those structural problems open a gap between its aspirations and reality. Through a simplistic narrative full of empty slogans, populist leaders propose an easy, painless way to close this “frustration gap”. Essentially, when seeking votes what populist politicians propose is a free lunch. In reality, once in power they try to make somebody else pay for the lunch. That “somebody else” obviously has insignificant electoral weight or political power. Foreigners or small ethnic groups are the ideal targets. In the populist’s rhetoric, they become “the enemy.”
More than a century ago in The Crowd: A Study of the Popular Mind, French psychologist Gustave Le Bon explained how to manipulate the masses. Decades later, Hitler put Le Bon´s teachings in practice with great effectiveness. “Affirmation pure and simple, kept free of all reasoning and all proof, is one of the surest means of making an idea enter the mind of crowds,” wrote Le Bon. The simpler the statement, the better. According to Hitler, it had to be intelligible to the least educated member of the audience. That’s why slogans were particularly effective.
However, according to Le Bon, affirmation was not enough. It had to be accompanied by repetition. “The repeated statement is embedded in the long run in those profound regions of our unconscious selves in which the motives of our actions are forged. At the end of a certain time, we have forgotten who is the author of the repeated assertion, and we finish by believing it,” he explained. The final ingredient in a populist’s discourse was contagion. “Ideas, sentiments, emotions, and beliefs possess in crowds a contagious power as intense as that of microbes. This phenomenon is very natural, since it is observed even in animals when they are together in number.” Mass media made this rhetorical trilogy much more effective and dangerous. Hitler added another powerful ingredient to the mix: negative emotions. Nothing stirs them more rapidly than the perception that one is being attacked or deprived of something rightfully owned. It is a natural self-defense reaction.
In Nazi rhetoric the Jews were the main enemy of the German people. In Latin America most populist leaders chose instead the landowning “oligarchy” allied to Yankee imperialism. In Trump’s narrative the Chinese, the Mexicans and Muslims are to blame for the end of the American dream. In Bernie Sanders’ view, the culprits were globalization, Wall Street and the top 1%.
The “narrative” is an essential element of a populist leader’s political strategy. It provides a simplistic and conspiratorial model to interpret reality that not only generates lasting negative emotions but also provides a moral justification to act against those responsible for the “expectations gap” (and if necessary, to infringe their rights).
Although populism comes in many ideological flavors, reflecting the zeitgeist of and values of a particular society, it always shares a common feature: it is self-destructive and extremely damaging. It is self-destructive because as Milton Friedman once said: “There is no such thing as a free lunch.” Eventually, the populist solution runs into trouble and the electoral alliance that brought populism to power unravels. Secondly, the longer populisms lasts in power, the deeper and more lasting is the damage inflicted upon society’s culture and institutions. Even Laclau once reluctantly admitted that populism could end “very badly” and he died without witnessing the disastrous effects it had in Argentina and Venezuela.
Trump’s powerful electoral slogan, “Make America great again”, clearly shows the root of the problem. His voters obviously believe that America is no longer great. It is not clear what is their, or Trump’s, point of comparison. However, we can easily identify certain cultural, economic and geopolitical trends that have undermined Americans´ confidence in their future, i.e., the source of their “frustration gap.”
First, after a couple of decades of undisputed military and diplomatic supremacy following the fall of the Berlin wall, the United States is being challenged by rival powers. In recent years, Russia and China have reasserted their military ambition more defiantly. In addition, Muslim radicalism has been an irritating and murderous nuisance. It also seems that many of Trump’s voters, both male and female, were prejudiced against Hillary because she is a woman. Besides the other failings they found in her as a presidential candidate, they did not believe that, as president of the United States, she could project an image of American strength and greatness in the international stage.
Second, right now the prospects for continued growth of the US economy don’t seem particularly bright. Since the 2008 crisis, many well-respected economists have raised the specter of secular stagnation. At the same time, the average American feels his or her income is lagging behind, while the top 1% becomes increasingly wealthier. They cannot fail to see that the beneficiaries of globalization have been the lower and middle classes in emerging market economies, particularly China, India and Mexico. This group of voters, which includes a big chunk of Bernie Sanders supporters, buys the idea that protectionism is the solution to their problem, i.e., repealing TPP and renegotiating NAFTA will give them back high paying jobs and make America great again.
Trump’s political base is not limited to the white, blue-collar, less educated Americans. It also includes affluent and well-educated Republicans. This elite also feels that America is no longer great. They are willing to forgo free trade if they can get lower taxes and right-wing Supreme Court appointees. In their mind, Clinton was set to impose the radical socialist agenda laid out by Obama. For these voters, growing levels of income inequality are not a concern. The fact that such trend exists is inconsistent with creeping socialism does not enter their mind either.
Declining productivity and growing inequality are America´s most serious structural problems. The former is the result of years of underinvestment in education and training and growing regulations. The skill level of the American workforce is lagging in the face of technological disruptions and automation. This contributed to wage stagnation and growing inequality, which in turn was exacerbated by crony capitalism and regulatory capture, particularly in the financial industry. Instead of solving the problem, protectionism will worsen it.
The “frustration gap” is not only economic and geopolitical. Another important group of Trump voters, the evangelicals, feel that America has lost its moral compass. For this group, abortion, equal rights for women, homosexual marriage and the theory of evolution are all anathema. Without any supporting evidence (in fact, despite contradictory evidence), they view Trump as their savior.
It is too early to make predictions about a Trump presidency. Making America great again will take time and require the adoption of policies that will show results in the medium and long term. It will also require preserving and strengthening certain values and institutions (independent judiciary and legislative branches, racial tolerance, press freedom, etc.) for which Trump has shown little respect.
Right now everything seems possible, including a sensible government. Trump’s speech last night was certainly a small step in that direction. However, he has so alienated the establishment of his own party during the campaign that it will be hard for him to surround himself with capable, honest and experienced public servants. His key cabinet appointments and his rhetoric in the coming weeks will provide some indication of what kind of administration he intends to lead. However, his character, his prejudices and his checkered career as a businessman don’t offer much hope.