IREF - Institute for Research in Economic and Fiscal issues
Fiscal competition and economic freedom
In recent years, the word “populism” has been everywhere. The first figure shows the rising use of the term by considering the frequency with which it was googled over the 2004-2020 period. As one can see, the US Presidential elections raised considerable interest. Queries reached a peak at the beginning of 2017, when Donald Trump took office. A burst of interest in populism also went hand in hand with Jair Bolsonaro’s political fortunes in Brazil. He was indeed depicted by the International Press and by many neutral observers as an ultra-right-wing populist, who took the presidency of the world’s fourth-largest democracy by virtue of people’s frustration, disillusion and anger.
The data also suggest that interest in populism is a worldwide phenomenon. It has been particularly intense in North America and in some North European countries such as Sweden (Fig. 2), and has decreased in recent times. I suggest two reasons for this.
One relates to the abuse of the word, so that its meaning is now diluted. Scholars traditionally use the term to refer to a range of political positions pandering to the “people”. By “people”, they mean a homogeneous social aggregate, the exclusive depositary of positive, specific and permanent values. However, in recent years virtually everything that has emerged in the western political arena has been labelled as populist, so that the word has become all but an empty box. If everything is populist, there is nothing specific about populism that people should know.
A second explanation regards how Western democracies have reacted to the relative success of political parties that pretend to be the only true representative of ordinary people. In fact, political fragmentation in Western liberal democracies has shown that the West is perfectly able to provide room for the various categories of the “people”, following their ideas and interests. This is witnessed by the opposition Donald Trump has met when implementing his populistic “America first” policy, which means isolationism in foreign policy and “Donald first” in internal matters.
Although the populistic fad is currently losing part of its strength, some of its arguments against representative liberal democracies survive. One is the alleged superiority of direct (internet-centred) democracy over its representative (liberal) version. This proposal is actually one of the battle horses of populism. Since political representatives are mostly corrupt, one must get rid of representative democracy. In fact, this amounts to throwing the baby out with the bathwater.
The strong correlation between the interest in Populism and the interest in Direct democracy is no coincidence (see Fig 3).
In brief, populists believe that the internet makes direct democracy feasible and effective, and superior to politics through representation. Yet, I do not think that a system that gets rid of political representatives would be a desirable outcome. Certainly, it is nice to think that people can express their preferences while staring at their internet devices, so as to make the ideal of Athenian democracy come true. In fact, this sort of referenda-driven democracy would be a nightmare. Direct democracy would lead people to devote a considerable amount of time and energy to engaging in the game of politics. Although this was not a major problem for the Athenian aristocrats relying on slaves, one suspects that things would not be so easy for today’s workers. Moreover, will people acquire all the necessary information or will they rather decide not to vote? Behavioral economics has shown that when individuals are faced with very complex choices, they end up doing what most other people do (the so called “herd behaviour”). Is that desirable? Finally, one wonders who would select the issues on which people would express their preferences. This is not a minor question: setting the agenda is an important source of power.
To summarise, a system of internet centred direct democracy would be just a pale image of classical direct democracy. In contrast with the Athenian ideal, internet democracy rules out face-to-face interaction, mediation and mutually accepted compromises. While these aspects play an important role in reducing the radicalization of political conflict, resorting to the social media and to virtual debates are likely to stoke tensions and eventually weaken the very essence of democracy.