Daily reporting on election campaigns (who’s up or down in polls, what did a candidate say today), is obscuring an underlying important theme : voters are very distrustful of government. The Berlin-based Forum for a New Economy has just addressed how to attack this critical problem, saying “to avert major damages to humanity and the planet, we must urgently get to the root causes of people’s resentment” or both democracy and also economic well-being will suffer.
The Forum’s formidable overall mission is “seeking new solutions and a new overarching paradigm for the major challenges of climate change, inequality and globalization, as well as redefining the role of the state.” An ambitious agenda, but one that correctly sees these interlinked problems requiring meaningful policy changes that help people, not being stuck in old and outdated frameworks.
People are feeling a striking depth of negativity. A February YouGov survey of U.S. adults asking respondents to rank the “best” and “worst” decades since the 1930s on a variety of dimensions found more people thought the economy is worse now (32%) than it was during the Great Depression (23%).
And the negativity runs, often inaccurately, across issues. Poll respondents said the 2020s are the worst decade for crime (wrong), happy families, morals, number of scientific breakthroughs (definitely wrong), and work-life balance. They even said the 2020s have the worst fashion, movies, and popular music (what happened to all those Taylor Swift fans?)
Some of this negativity may be tied to what scientists call “recency bias,” where we remember and are influenced by more recent events. But these negative views on the current decade are still striking—even if there’s recency bias, people are not saying current times are good.
European polls, while not as sweeping, also show a high degree of negativity about the economy and whether individual countries are on the right track. And polls in both America and Europe find a substantial gap between people’s positive assessments of their own lives and negative views on their country’s trajectory.
These trends worry the thinkers at the Forum for a New Economy (as they should worry all of us.) Like other analysts, they see an “exaggerated faith in the efficiency of markets” over the past three decades as blinding policy makers to growing problems of climate change, inequality, and political alienation.
These problems are especially pressing in 2024, when “more than 50 countries that are home to half the planet’s population are due to hold national elections,” along with elections for the European Parliament, where observers expect “the far-right” to “make significant gains.” Earlier this year, the Associated Press’ Jill Lawless said these upcoming votes would “test even the most robust democracies” and could “strengthen the hands of leaders with authoritarian leanings.”
That’s why the Forum recently brought together some of the world’s leading experts on economics and politics to analyze our interlinked problems and recommend a productive future course. Their “Berlin Summit” looked at growing political populism, whether Biden’s economic policies could help regain trust from alienated voters, and how industrial policy and climate policy might provide shared economic benefits and increased political trust and cohesion.
Over 50 notable experts with a wide range of analytic expertise and policy experience signed the Summit’s declaration, “Winning Back the People,” including Mariana Mazzucato, Dani Rodrik, Adam Tooze, Laura Tyson, Thomas Piketty, and Olivier Blanchard. The Forum’s work was assisted by experts at the Institute for New Economic Thinking (INET), which seeks to reduce the market fundamentalism of mainstream economics while engaging in research and policy analysis to foster greater shared prosperity. (I am a signer of the Forum’s declaration, and formerly worked at INET.)
You should read the declaration, and watch videos of it online. The analysis says in many countries there is a “widely shared experience of a real or perceived loss of control over one’s livelihood and the trajectory of social changes.” This perceived loss of control is leading to “a world of dangerous populist policies exploiting the anger without addressing the real risks.”
We see those angry populist policies in many nations. Donald Trump makes angry claims about immigration and says if elected he’ll immediately deport millions of immigrants, using the National Guard and avoiding legal due process. In Germany, the hard-right Alternative for Germany is second in the election polls, trailing only the Christian Democrats. And in India, the world’s largest nation, authoritarian prime minister Narendra Modi is increasing anti-Muslim rhetoric as a national election approaches.
Faced with such powerful negative forces, the Forum wisely says “we do not pretend to have definitive answers.” But they outline a positive, multifaceted program using industrial policy, implementing new climate actions, and downplaying overreliance on markets as the default solution.
Most importantly, the Forum’s declaration calls us to action against “populists who pretend to have simple answers.” Noting the combined threats from climate change, rampant inequality, and growing mistrust of governments by their own citizens, the Forum says “there is no time to waste.” They’re right.
Read the full article here
