Why Do Right Wing Populists Keep Coming Back

Donald Trump’s approval ratings are lower than ever. Viktor Orban just suffered a landslide
defeat. Most Brits now think Brexit was a massive mistake, and most Europeans trust EU bureaucrats
more than their own elected governments. So, it kind of looks like right-wing populism is
collapsing, right? It seems that people are finally realizing that random tariff barrages
won’t fix the American economy and that populists may promise to drain the swamp, but they really
mean replace the swamp and that leaving the EU did not result in more money for healthcare. The
populist surge in the west is over. This is the end. Or is it? Actually, the experience of early
adopter populist countries shows us that this is extremely unlikely. For example, in Austria,
populism collapsed in the early 2000s after Jörg Haider’s freedom party government turned out to
be a chaotic mess. But once again, although not in power, the Austrian Freedom Party got the most
votes in the last election. Similarly, in Italy, the populist Berlusconi faced a crushing defeat
after it became clear his billionaire who will rescue the economy narrative was not working. Yet,
Berlusconi always came back. And even when he himself did not, Italy is now again ruled by a
populist right-wing president. In fact, looking at these graphs, we can see that the dynamic is often
the same. Once right-wing populism emerges, yes, it often suffers crushing setbacks due to chaotic
infighting, no economic progress, and the exposure of massive corruption, but it never really goes
away. So, right-wing populists may suffer crushing defeats and often embarrassing ones,
but eventually they always bounce back, which raises the question, why does populism always keep
bouncing back? Why is it not going away after all of those broken promises? As always on Money and
Macro, we’ve emerged ourselves into the relevant scientific literature and selected the four most
prevalent explanations. Narrative number one, it’s the economy stupid? Ordinary people have been left
behind. Narrative number two, right-wing populists have a point. Mainstream politicians themselves
are the problem. They’ve become out of touch on cultural issues like immigration. Narrative
number three, people have just become more racist/ authoritarian. And last but not least, narrative
number four, it’s actually social media that’s to blame. That is pushing people to political
extremes. In this video, we examine the evidence and counter evidence for each theory to determine
which of them has the most convincing explanation for why right-wing populism keeps bouncing back.
But before solving the puzzle, we first need to make sure we are all talking about the same thing.
That is, what is right-wing populism actually? And how is it different from left-wing populism?
Aren’t these polar opposites? Why are we talking about them in the same breath? Well, yes and no.
This is something people often get wrong. Populism is not at all like socialism or like conservatism.
It’s not an ideology. It’s a way of talking about politics a lens through which political conflict
is framed. At its core, both left and right-wing populism divides society into two opposing groups.
On the one hand, the hardworking people and on the other, the corrupt elites. Populism is pretty
easy to understand. Essentially, all problems in society are the fault of these corrupt elites. The
difference between left and right-wing populism then is which elite group they frame as the
problem. On the left, populists target economic elites such as rich and the corporations, the
brolicharchy of tremendous wealth, a government of the billionaire class by the billionaire class.
On the other hand, right-wing populists target a different kind of elite group, the cultural
elites, such as “The Brussels bureaucrats, the Amercian bureaucrats, and the Soros network…” but also academics or mainstream politicians accused of ignoring ordinary people’s concerns
about immigration, crime, and cultural identity. Different enemies, same narrative. The system
has been captured by elites which no longer represent the people and simple narratives
often come with simple solutions. So if you believe that moneyed elites cause most problems,
you should vote left-wing populists into power so that they can tax their wealth away. And
if you believe immigration is damaging the economy and eroding local culture,
you should back leaders who are not afraid to defy cultural elites and take massive actions to close
the borders. Especially the right-wing populist story convinced a lot of people in the West in
the last couple of decades. But okay, back to the present. Trump’s remanufacturing America story is
failing. Brexit is not making Britain rich and Orban just lost in a landslide. So why again do
we say right-wing populism will bounce back soon enough? Well, let’s start with the economic story
that should in theory empower left-wing populists. But surprisingly in reality often empowers the
right. Narrative number one, people vote populist because they are economically left behind. Okay,
this map shows GDP per capita per German state. And this map shows where people mostly voted
for the right-wing populist party AFD. This is not a coincidence. When we look at leaders like
Marine Le Pen and Viktor Orban, we see that they often struggle to gain traction in thriving rich
urban centers, but they dominate the vote in rural and declining areas. By now, it’s
pretty well known that the hyper globalization period from the late 1970s to early 2000s created
winners and losers. Chinese workers were able to produce for the rest of the world,
massively improving their own living standards. Meanwhile, in the west, highly educated people
in big cities in rich countries were also able to export services to more and more people globally,
which translated into higher wages for them. But take a look at this graph. The hourly wage
corrected for inflation for a US worker without higher education is very similar today to what it
was in 1965. So while during the period of hyper globalization the US economy kept growing only
the well-educated cultural and moneyed elites have actually seen their purchasing power go up while
many ordinary people were indeed left behind. It’s not hard to see how this can translate
into politics. If you feel the system no longer works for you and the same political elites keep
defending it. Of course you will start looking for alternatives and that is exactly what we see in
the data. Regions more exposed to Chinese import competition were more likely to support Brexit,
Trump, and the AFD in Germany. Areas more exposed to automation tend to show stronger support for
populist parties. However, while this evidence looks convincing, it has three big problems.
First, if we look at people in countries that truly lost a lot of their income between 1985
and 2015, we would expect right-wing populism to have surged in countries
like Spain and Portugal. But actually, relatively fortunate and less unequal countries like Norway,
Finland, Switzerland, and Austria have seen far bigger right-wing populist surges.
The second problem with the explanation is once we move from regions to individuals,
the story weakens. As research by political science professor Larry Bartles shows, economic
disaection turns out to be a poor predictor of whether someone votes or identifies with
right-wing populism. It is far less informative than attitudes towards immigration, trust in
political institutions, or broader cultural values. In other words, yes, many people in left
behind areas vote for the populist right. But if you want to actually predict whether someone will
support the populist right, you get much closer by asking what they think about immigration or
whether they trust politicians than by asking them about what they think about the economy. The third
problem is if populism is about regular working folks wanting an equal share of the economic pie,
wouldn’t it make sense to vote for populists who want to redistribute wealth, so those on
the left? However, if we look at the data, we see the opposite. It’s especially right-wing
populism that is surging in the West as inequality increased. So, could it be that people are fooled
by the populist right to vote against their own interest? That’s a story that we hear a lot and it
could be true but actually and it may shock some of you hearing this from me in this case maybe
economics is not everything. So it’s time for this economist here to step outside of his comfort zone
with narrative number two. Right-wing populism is actually about out of touch cultural elites.
Okay. The argument goes a little bit like this. No voters are not confused. The real people who are
confused are the cultural elites. I really believe that Westminster, the intellectuals, the liberal
elites just don’t get it. Take a simple question. Should immigrants adapt to the customs of the
country that they move to? Large majorities of the public say yes. This holds all across Europe,
Britain, Denmark, Germany, and Sweden. But among political elites, only those in Denmark agree with
that view. On the other hand, in Germany, all politicians except for the populist right, and
yes, that even includes conservative politicians, are more liberal on immigration than the average
voter? Or take the question, should race be taken into account in college admissions? Only a third
of Americans agree with this view. Yet mainstream Democrat leaders from Hillary Clinton to Joe Biden
have consistently supported raceconscious policies and criticized court rulings against them. This
disconnect between what the public wants and what politicians want on the other hand is what
political scientists call a representation gap. As you can see here in this FT graph,
politicians and voters are roughly aligned when it comes to economic issues like redistribution
and capitalism. Left-wing politicians are close to leftwing voters and right-wing politicians
are close to right-wing voters. But when it comes to topics like immigration and crime,
politicians are on average far more to the left than the average voter. So when the political
debate is dominated by economic issues like taxes and redistribution, well in those cases,
mainstream parties are relatively safe because they champion what voters actually want. But
when cultural issues move to the center of the debate, the dynamics change. If voters feel that
their basic cultural preferences are ignored or even worse, dismissed or talked down upon,
that gap becomes a big opportunity for right-wing populists to emerge. The clearest example of this
is the 2015 European refugee crisis. As images of large numbers of asylum seekers and irregular
border crossings dominated the news, immigrations shot up the list of public concerns. People did
not necessarily purely react to immigration itself, but they did react strongly to the
perception of chaos and loss of control. And when that perception takes hold and politicians are not
reacting to it, then right-wing populists gain a big advantage. Research by James Denison and Andre
Fer Gues shows that as immigration becomes more salient, support for populist right-wing parties
rises right along with it. Not perfectly, not everywhere, but consistently enough to matter.
At the same time, as citizens, we’re like, “Oh my goodness, look at what’s going on here. Our
societies are changing dramatically. We’re in the midst of this economic stagnation where, you know,
I feel like I have to compete for jobs. I have to compete for public goods.” And at the same time,
traditional establishment parties are inviting in tons of immigrants, allowing huge asylum flows,
telling me that if I worry about this or I’m concerned about this, I’m a racist or a xenophobe.
So, interestingly, when populist right-wingers say that cultural elites like mainstream politicians
are out of touch, data shows us that they are correct. Not when it comes to economics, but when
it comes to social issues like immigration and crime. Yes, the general public is significantly to
the right of most politicians. But as we’ve seen, there’s only one exception. In Denmark, the Social
Democrats adopted stricter immigration policies themselves, which coincided with a decline in
support for the populist right from over 20% to just below 10%. But okay, that’s still 10%. So,
there must be more going on. But this was still a crucial story. In many leftwing circles, though,
the diagnosis is very different. The problem they argue goes far beyond out of touch elites. No,
it points to the people. Narrative number three, people are simply becoming more
racist. And honestly, this is not super popular in academic circles. This explanation, it’s actually
an argument that I often hear from friends, so I thought it was important to address it here.
Nonetheless, many of them watch extreme takes from populist right-wingers and their supporters.
They scroll through online comment sections and come away thinking something genuinely dark is
happening. People are becoming evil. People are stigmatizing entire Muslim communities as violent.
Politicians are showing authoritarian tendencies. There are conspiracies about Brussels bureaucrates
or George Soros erasing Western civilization. It can feel like people are forgetting the lessons
of the past, growing tired of democracy and becoming more xenophobic and conspiratorial. But
is it actually true? Are people really becoming less satisfied with democracy and more hostile to
immigrants? Well, according to political scientist Larry Bartles, the answer to that question is
clear. No. Absolutely not. Based on survey responses from more than 300,000 Europeans, he
finds that they have not become significantly more illiberal or more hostile to immigration over the
past two decades. In fact, support for European integration has remained fairly stable throughout
the 21st century. Level of trust in parliament and politicians, satisfaction with democracy and even
attitudes towards immigration. They have remained broadly stable over time and have even improved a
little. Of course, there are some exceptions. For example, Spanish citizens became much more hostile
to democracy after the massive economic crisis in 2008. However, satisfaction with democracy
has been rising in Finland, Sweden, and Denmark at a time when the populist right became a major
player in those countries. So overall, no, it does not appear that people are becoming more racist or
authoritarian, but I do understand why more and more people feel this way. The YouTube shorts
algorithm sometimes recommends me these nice videos of how US presidents used to interact with
one each other. I think Mr. Nixon is an effective leader of his party. The question before us is
which point of view and which party do we want to leave the United States? I agree with Senator K.
And if we compare that to some of the stuff that Trump says these days, sleepy, crooked Joe Biden,
where I could stand in the middle of Fifth Avenue and shoot somebody and I wouldn’t lose any voters.
Okay, it’s like incredible. Then it’s clear that something has changed. The public is willing
to accept far more uncivilized language. And actually, this is not just an American phenomena.
Right-wing populist leaders everywhere use increasingly inflammatory language. So why
does the public increasingly accept that type of behavior if they themselves did not become more
authoritarian? Well, this brings us to narrative number four. Blame social media. Social media is
polarizing us. And there’s really good evidence that this is actually happening in two ways.
First, as you can see here, traditional media like newspapers and radio, well, they gave a voice to
everyone, the hard left, the moderates, and the hard right. However, as you can see here, cable
TV is already quite a bit more biased towards both extremes. And on social media, well, oh boy,
the algorithms really love to serve us both hard left and hard right content, while the moderate,
nuanced, more boring voices are buried in the algorithms. To explain this, psychologist J.
Vanbo describes four dark laws that drive online engagement. Negativity, extremism, us versus
them thinking, and moral emotional language. In other words, content that is more negative, more
extreme, more tribal, and more emotionally charged is more likely to grab attention and spread. This
means that expressing outrage, attacking the other side, or using words like disgusting or unjust
or just super simple narratives will consistently outperform more balanced or nuanced views. So, if
you are on social media a lot, it makes sense that you will start believing that people are angrier,
more polarized, and more extreme than that they actually are. But it gets worse. The second way
that social media is polarizing us other than amplifying extreme voices is by connecting extreme
voices. You see, views that were once socially taboo like I could have done things to her that
would have made your head spin used to remain on the fringes. But nowadays, people holding these
views can find each other instantly. When they realize that they’re not alone, then they become
more confident to express those views in public. So the internet did not necessarily create these
attitudes, but it did make them more visible, more organized, and more politically relevant. And this
can explain why many of my friends that spend a lot of time online feel that people on average
have become more extreme, even though research shows us that they did not. However, again,
this is not the full story. You see, cable TV and social media spread pretty evenly worldwide. Yet,
right-wing populism patterns vary drastically across countries. Not every country has ended
up with Americanstyle media polarization. So this brings us to our conclusion. Which
narrative is the most convincing? Well, one thing it’s clear, it’s not narrative number
three. People are not becoming more racist or authoritarian over time. Anti-democratic
and anti-immigration sentiment did not just appear out of nowhere in the last decades.
There’s always been a slice of a population that feels this way, which means there’s always been
some baseline demand for right-wing populism. But for the other narratives, given that country
trajectories are so different, the different right-wing populist surges can probably best
be explained by combining these three other narratives. First, there was rising inequality,
austerity, the fallout from the financial crisis. All of that shook people’s trust in institutions.
This could explain populist surges in the American Midwest or Eastern Europe. On the other hand,
populist surges in relatively equal countries like Norway and Denmark probably have more to do with
a political disconnect on cultural issues. And finally, the rise of social media and cable TV
probably acted like an amplifier, giving populist parties that represent 10 to 30% of the population
the power to take over several countries. So yeah, all of these three explanations are supported by
the evidence. On their own though, there are too many contradictions to believe them. But
taken together, it becomes clear that right-wing populism will likely surge back again and again
as long as inequality remains high. Politicians do not listen to voter preferences on culture and
immigration. And number three, as long as social media gives populist an algorithmic edge. But
yeah, that’s my take. What do you think? Let me know in the comments below. And if you find this
topic as fascinating as I do, I highly recommend that you check out the excellent analysis by our
advertising sponsor, The Economists, which I always check out for the research process of
my videos. For this episode in particular, I learned a lot from their analysis on how
the Danish social democrats have shifted right on immigration to counter the far
right. Or if you also care about macroeconomic stability, I encourage you to take a look at
this article where they explore how efforts to be fiscally responsible and reduce budget
deficits can sometimes end up benefiting populist parties. And finally, for a broader overview, I’d
strongly strongly recommend this article on what populism actually means. As these examples show,
The Economist delivers insights that help you see the bigger picture and think for yourself.
This is why I almost always rely on their analysis for my research and it’s why I highly recommend
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