Populism and Neoliberalism

David Cayla

• Publisher: Routledge
• Year: 2021
• ISBN:
  9781000366778
• Edition: 1
• Topic: Economia
• Subtopic: Storia economica

Populism and Neoliberalism argues that the roots of populism lay in the contradiction between the democratic ideal, which implies that the people should decide, and neoliberal governance, which seeks to make markets and competition the arbiters of major social developments.

Neoliberalism is not the product of a clearly conceived ideology but rather a set of doctrines based on a few major principles which have been embraced by decision-makers of all kinds with little reassessment along the way. In practice, a certain art of governing that exploited an economic thinking insensitive to social complexity gradually imposed itself by being wrongly identified as the successor to liberalism. The rise of populist movements poses a significant challenge to liberal democracies, yet the causes of these movements remain beyond the understanding of experts. The explanation of populism is often limited to a mere political analysis. Contrary to that, this book investigates the economic and social dynamics of the free-market system and explains how populism emerges from its imbalances. It also aims to explain the emergence of the neoliberal doctrines during the 1930s and to characterise their common features. In light of this, it explores how the rise of inequality and social discontent create a pressing duty to develop another model, and argues that we must now rethink our policies in depth in order to respond to the challenge of authoritarian populism.

This book marks a significant intervention in the debate about the rise and fall of neoliberalism. Its analysis of the links between the failings of neoclassical economics and the failings of neoliberal politics provides essential reading for anyone interested in the damaging impact of neoliberalism, the failings of neoclassical economics, and explanations for the rise of populism.

1
The age of uprisings

The populist menace

Recently, a wealth of literature on the subject of populism has appeared in bookstores and university library shelves. Like any concept, populism has been forged to reflect a specific phenomenon: the sudden appearance of widespread revolt movements, in the polls or in the streets, that wish to overthrow the established order and put an end to a “system” of which the people consider themselves to be the victim.

The year 2016, marked by the victories of Brexit in the United Kingdom and Donald Trump in the United States, has raised awareness that populist phenomena are not reserved for emerging countries or those with fragile democratic institutions. It can just as easily affect old and stable democracies in rich and developed countries. Researchers in political science, sociology, and even economics have been looking at the roots of this new populism. All agree that it cannot be studied without its social context and that it is a symptom of a deeper democratic crisis. But what is the nature of this crisis? Here is where opinions diverge.

Many authors of books and articles on populism, especially economists, try to explain its resurgence on the basis of its most visible characteristics. Populism is not a constituted ideology. It can be left- or right-wing, defend public services, or demand fewer civil servants. What characterises populist movements is that they share a world view based on the opposition between the people and the elite. From this characteristic, it can be deduced that the emergence of neo-populism would be the consequence of growing inequality and economic stagnation of the middle classes.

The economist Dani Rodrik broadly adopts this vision. In an academic article (Rodrik 2018a), he argues that the populist dynamic is linked to the growing inequality and the economic and job transfers produced by the globalisation process. Moreover, the free movement of capital and the perpetual blackmail of offshoring have contributed to strengthening the bargaining power of capital to the detriment of employees. Admittedly, Rodrik acknowledges, technological progress also affects the distribution of income, and probably more significantly than free trade. But, from the citizens’ point of view, the negative consequences of globalisation are much less acceptable than those resulting from scientific progress since they emanate from political decisions.

What also contributes to populism, according to Rodrik, is that economists, and more broadly political elites, appear insensitive to the social consequences of globalisation. By overemphasising the overall benefits of free trade and forgetting to mention the fate of the losers and how to cope with it, they fuel mistrust and provide arguments of anti-systemic tendencies for the vindictive rhetoric. Moreover, academic economists tend to not show enough concern for the institutions that structure political and social life. In particular, the nation-state is perceived as “an archaic construct that is at odds with twenty-first-century realities” and generates “transaction costs that block fuller global economic integration” (Rodrik 2018b, pp. 16-18).

For non-economist researchers, while inequality undoubtedly contributes to populism, the existence of deeper dysfunctions in modern democracies must also be considered. Political scientist Yascha Mounk (2018) sees populism as a consequence of a contradiction that has recently arisen between liberal values and democratic principles. By favouring action over institutional checks and balances, populists threaten the principles of the rule of law and some civil liberties. An alternative approach is that of Ivan Krastev (2017), a Bulgarian political scientist, who explains that populism in Central and Eastern Europe is the consequence of identity insecurity linked to migratory tensions and the European Union’s institutional fragilities. Finally, the feeling of democratic powerlessness, generated by an economy governed on a global scale and over which politicians have little control, is also an advanced element in understanding democratic dysfunctions (Cox 2017).

But what is crucial to understand is that populism is not simply an electoral phenomenon. It is a social trend before it reaches the polls. This multifactorial aspect implies that its roots are deep and embedded in social life. The Yellow Vests movement in France or the medical debate surrounding the use of hydroxychloroquine in the treatment of COVID-19 were indeed populist moments, even if they did not necessarily have electoral consequences. More fundamentally, the growth of distrust towards institutions, such as the press, political parties, the education system, or medical authorities, is an essential element in the populist dynamic.

My purpose in this chapter is to propose a global analysis of populist phenomena starting from the economic dimension, drawing the sociological identity, and finally political consequences. The idea defended here is that populism is not simply a matter of income or wealth inequality; nor is it the consequence of an inevitable phenomenon generated by modernity; it is more fundamentally the consequence of demographic and sociological transformations which are themselves the consequences of underlying economic dynamics. Yet the economy is a human construct, the product of an institutional framework, and the result of political choices. In this sense, populism is not inevitable.

The analysis of populism I wish to develop is based mainly on the European situation. The European Union is indeed a very interesting model, not only because it is the scene of a specific resurgence of populist movements, but also because it combines having a common institutional framework at the economic level with the fact that it brings together a highly diverse set of countries. This “unity in diversity” makes it a unique laboratory for studying the links among institutional changes, economic developments, and sociological transformations. It also helps to understand how the same institutional framework can give rise to different forms of populism. Nevertheless, most of the dynamics that emerge from this study can be applied to other world regions – especially, as we shall see, to the United States.

Who wants to gag Professor Raoult?

On February 25, 2020, just as the COVID-19 epidemic began to affect the European continent (eleven cities in northern Italy were placed under quarantine three days earlier), a less than two-minute video was released on the official website of the Institut Hospitalo-Universitaire (IHU), a research and hospital facility based in the city of Marseille and dedicated to the study of infectious diseases. Titled “Coronavirus: game over!”¹ the video defended the use of chloroquine medication usually used to treat malaria, to treat the disease. Standing in front of his desk, IHU president Didier Raoult, an internationally renowned French microbiologist, explained in a reassuring tone why the new virus should not worry anyone. At that time, several thousand deaths, most of them in the Hubei province in China, were already to be deplored. But Raoult appeared confident: “It’s probably the easiest respiratory infection to cure”, he said, promising clinical test results would come soon.

Indeed, clinical test results were not long to come. On March 16, 2020, a new twenty-minute video reported that the treatment with hydroxychloroquine and azithromycin (a broad-spectrum antibiotic) was able to eradicate the virus load of all the six patients following the treatment after six days.²

The idea of treating COVID-19 with chloroquine did not go unnoticed. In the Anglo-Saxon world, Gregory Rigano, a 34-year-old man, claimed on March 14 on Twitter that he had found a cure for the coronavirus by disclosing a scientific study he co-authored. Two days later, billionaire Elon Musk shared the paper on his account. Soon, Elon Musk’s tweet was relayed tens of thousands of times and attracted the attention of the conservative media. On March 19, Rigano was invited by the influential Tucker Carlson, a star presenter of Fox News. Rigano referred to the work of Professor Raoult’s Marseille team, whose results had just been made public, and said: “The president has the authority to authorize the use of hydroxychloroquine against the coronavirus immediately”. That message to the president was sharply noticed by Donald Trump, a regular viewer of the show. The same day, in a press conference, Trump stated that he was authorising the use of hydroxychloroquine, a remedy described as a “gift from God”, to fight the epidemic then raging in the United States.

Problem: As the Daily Mail revealed a few days later,³ Gregory Rigano was neither a doctor nor a scientist, but a lawyer with a passion for cryptocurrency. The study he posted online was fraudulent and had no scientific basis. Finally, it was discovered that Stanford University, of which he claimed to be an adviser, knew nothing about him and demanded that he remove all references to its name from the study. Eventually, Google removed the whole study from its servers.

But Donald Trump’s intervention had been heard all over the world, particularly in France. Since March 16 2020, the information that the research centre in Marseille may have found the solution to stop the epidemic had been circulating at full speed. While residential lockdown had just been imposed in France, Professor Raoult’s videos had been being widely shared on social networks. Trump’s statement accelerated the phenomenon. Many people began to wonder why that essential information was hidden by the press. Why the French government and medical authorities refused to use the treatment protocol that was advocated by the Marseille institute and approved by the American President in person? Conspiracy theories flourished. Didier Raoult was seen as a maverick. At age 68, he looked like a rebellious rock star, thanks to his long hair. He was reported to be in a conflict with the husband of Agnès Buzyn, the former health minister who implemented the anti-pandemic plan before she resigned in order to run for mayor of Paris. Was the French scientific establishment trying to marginalise that great iconoclastic scientist, whose work was quoted as a reference throughout the world?

The reality was rather simpler. If Didier Raoult’s work on chloroquine was in dispute, it was only because the clinical experiment carried out in Marseille was deemed insufficient to decide on the effectiveness of the remedy. The sample size was small and scientific protocols were not scrupulously respected. However, the damage was done. When the government announced the strengthening of the lockdown measures, Raoult, who disagreed with the strategy, announced that he would no longer take part in the Scientific Council in charge of informing governmental decisions. He demanded a lifting of the ban on the use of chloroquine and, without even waiting for an answer from the Ministry of Health, launched a vast study within his institute, promising to test and treat all patients who presented themselves. Soon, hundreds of people began flocking to the institute. To prevent the spread of contagion in the waiting lines, the police asked those crowding in front of the sorting tent to move more than a yard away from each other. Behind the tent, supporters of the “Olympique de Marseille” soccer team erected a banner that proclaimed: “Marseille and the world with Professor Raoult!!!”.

Everything about this affair is fascinating, in particular what it reveals about French society at the beginning of 2020. The COVID-19 outbreak surprised everyone, especially the French government. In March 2020, while the number of COVID-19 cases was exponentially increasing every day, France was running out of masks for its medical staff. The requisitioning of stocks and the emergency purchase orders made to China, the only country able to produce a quantity adequate to the needs, were too late. Despite the reassuring speeches of the authorities, orders were not always honoured because of the fierce competition among countries all over the world.⁴ Finally, France suffered a shortage of hydroalcoholic gel and could only test a very small proportion of suspected cases.

Officially, masks were declared “useless” for uninfected people. It was therefore recommended that masks should not be worn in order to leave the small stocks for hospital staff and those who had to continue working in essential areas. Government guidelines varied from day to day. On March 12, in a solemn address to the Nation, President Emmanuel Macron declared that schools and universities must be closed, but that borders must be kept open because “the virus has no passport”. On March 14, the French Prime Minister announced the closure of all bars, restaurants, and non-essential shops that evening, but invited all voters to go to the polls the next day for the first round of the municipal elections. On March 16, a new presidential allocution announced that the entire population would be confined to their homes. In a state of panic, those who were able to do so abandoned the cities and the Paris region and moved to rural residences, at the risk of spreading the virus. A few days later, air, rail, and road passenger traffic came to an almost complete halt. The country froze under lockdown. Yet, the government called for manufacturing and construction activities to continue despite the acute shortage of protective equipment.⁵

These hesitations, the apparent lack of preparation, and the contradictory instructions addressed to the population in a context of great anxiety came together in an explosive mixture, causing a growing distrust towards the government. In this context, the question of Professor Raoult’s work emerged and provided the basis for the most far-fetched conspiracy theories. “The problem with chloroquine is that it doesn’t cost enough for the pharmaceutical lobby”, read one comment on social networks. “It would kill any profitability for the future vaccine”. Sensing the movement’s popularity, many politicians in the Marseille region publicly showed their support for Didier Raoult, such as Christian Estrosi, the mayor of Nice, who claimed to have “the feeling of being cured” thanks to the professor’s remedy.

But in the medical profession, many doctors and experts were sceptical of the relevance of generalising the use of hy...

Table of contents

• Cover
• Half-Title
• Title
• Copyright
• Contents
• List of figures
• List of tables
• About the Author
• Acknowledgements
• Introduction: What’s next?
• 1 The age of uprisings
• 2 Fifty shades of liberalism
• 3 Neoliberalism: Repair it or leave it?
• Conclusion: “Is there life on Mars?”
• Index