The politics of anger will get worse

24 March 2016 11:03 am

The only surprising thing about the politics of anger that’s left Western democracies convulsing is that people are surprised. For sure voters everywhere are angry, from the supporters of Donald Trump to people protesting in the streets of Athens to right wing anti-immigrant politicians in Germany with neo-Nazi agendas. Inequality, immigration and the indifference of political elites are firing up people in ways we haven’t seen in recent years.

Then again, there’s nothing new in it. We saw this after the First World War when Socialists and communists pushing social reform, and the fascists were advocating national assertion, both in a pitch to give voice to the voiceless, much like now. And while everyone is focused on Donald Trump and Martine Le Pen, we should remember their predecessors in Ross Perot, Governor George Wallace, a Democrat who broke with the party to champion segregation, Enoch Powell and of course Le Pen’s father.

But there is a sense now that it’s not going to let up. As these charts from Bloomberg, the share of wealth owned by the middle class has declined in every part of the world on a relative basis, US workers’ share of income has dropped to the lowest level since World War Two, the rich have got richer over the past century, incomes in Europe’s southern crisis countries has fallen since 2009 while it’s risen everywhere else, in Spain and Greece unemployment for under 25 year olds is around 40 per cent, European countries are seeing unprecedented flows of refugees and they’re powerless to stop it, as Syria’s implosion sends boatloads of refugees to Europe, more voters are identifying immigration as a top issue and last year only 19 per cent of Americans trusted their government, down from 54 per cent after 9/11. As a result, political outsiders, non-politicians as it were like Trump, have been getting a greater share of the vote. While Asia has not had this level of discontent because of rising incomes, it can’t last forever because China is slowing down.
But there are other factors.

As Harvard University professor Dani Rodrik argues in his book Has Globalisation Gone Too Far, the unfettered world market has created "winners"—and those without. These apparent "losers" are increasingly anxious about their standards of living and their precarious place in an integrated world economy. The result: severe tension between the market and broad sectors of society. And governments are caught in the middle. It has seen right-wing populists such as Trump engaging in identity politics while left-wing populists such as Bernie Sanders emphasize the gulf between the rich and the poor. And all that feeds the anger.

Mark Kramer in the Harvard Business Review says big business is making it worse with their tax dodges and stock repurchases and cash reserves nudging earnings per share and stock prices higher but doing nothing to create jobs and more wealth lower down the food chain.

The appeal of populists lies in the way they give voice to the anger of the excluded. They offer grand narratives as well as concrete, if misleading and often dangerous, solutions. Moderate politicians and voters who care about society take note.