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Understanding Populism

Back in 2008, at the time of the financial crisis, I published a book about the history of populism called Fixing the System: A History of Populism, Ancient & Modern. It didn’t make me famous, but it did claim some understanding of the rising political phenomenon of populism–something which since has morphed into a global tidal wave.

Since 2016 we’ve had an explosion of political upheavals around the world–all widely described as populist: the Brexit vote in Britain, Trump’s election, and the rise of separatist and nationalist parties in Europe and beyond. We can add to the mix the ‘yellow vests’ in France, and movements in places like Brazil, Venezuela, Mexico, and the Philippines.

Populism is widely misunderstood. It can be found on both the left and right of the political spectrum. It’s not about how liberal or conservative you are. It’s about the failure of the system to provide economic and social security for a large part of the population.

Populists today object to the status quo, to being ruled by elites, to what they see as a rogue establishment, whether left-leaning or right-leaning, that’s no longer accountable to the general public. They’re right about that, but otherwise they have little understanding of how this came to be, how political and economic power came to be concentrated, at their expense, in very few, mostly unaccountable, hands.

American populists are largely reactive and somewhat confused. They don’t know what hit them. And they don’t know their own, often forgotten, history. Nineteenth-century American populists were not socialists, but small-scale capitalists. They were farmers, artisans, and professionals. Private enterprise was central to their values, and they wanted to preserve it for ordinary citizens like themselves. The ideal was to own your own business, not to work for a corporation. Populists fought to keep private enterprise widely distributed among many small, independent producers, as it still was in their day, and to resist the emergence of dominating monopolies which threatened their economic security.

In mainstream American media today, however, this history is ignored, and ‘populism’ is mostly a dirty word. The media paints a picture of populists as angry malcontents responding to their problems out of emotion rather than reason. They are said to be easily seduced by demagogues, like Trump, who play on their fears rather than their hopes, on their economic and social insecurities, and who find scapegoats for them to blame.

There’s a lot of truth in this. Trump has indeed whipped up a frenzy, particularly among white, working men, richer as well as poorer–his so-called ‘core’ supporters. He’s fed their resentments and fears by telling them that immigrants are taking away their jobs, gender acrivists are taking away their masculinity, politicians are taking away their freedoms, and secularists are taking away their religious values.

Real populism, however, isn’t (and wasn’t) so easily fooled by demagogues. In the heyday of American populism–in the nineteenth century–the movements led by farmers, artisans, and other small business people recognized that growing corporate power, particularly among railroads and banks, was destroying the free enterprise system of small, independent producers. They organized democratically, founded political parties, drafted platforms, and demanded accountability from their representatives.

They mounted a serious, nationwide political and cultural movement against the corporate and government powers of the day. They organized a series of parties–the Greenback Party, the Farmers Alliance, the People’s Party–the last of which which between 1890 and 1900 elected 11 governors and 45 members of Congress, including 6 United States Senators. The People’s Party candidate for president in 1892, James B. Weaver, got over a million popular ballots cast in his favor, and 22 electoral votes.

These old-time American populists were battling the powerful trusts, or monopolies, that came to dominate the United States economy after the Civil War. In key infrastructure areas like transportation and energy the monopolies were able to set exorbitant rates for services and products, including access to resources and credit. Small businesses were hamstrung and ultimately marginalized in favor of large enterprises which were able to make the rules for economic success, to their own benefit.

To remedy this sad state of affairs, the populists demanded the conversion of key infrastructural sectors into public utilities repurposed to facilitate rather than exploit small producers. Railroads, they argued, should be run on a regulated, non-profit basis to ensure low-cost access to markets by their customers. Similarly, banks should be run on a non-profit basis as to ensure low-cost credit to borrowers. Populists also called for the federal government to directly issue currency to pay for its expenses (instead of borrowing to do so).

The basic idea was to turn enterprises with too much monopoly power into accountable public utilities, but otherwise to allow the free market to run its course. The aim was to save free enterprise. If many independent producers have to use the same infrastructure (like railroads or the internet), or rely on a common provider of essential products or services (like energy companies or banks), those businesses, populists said, ought to be transformed into public utilities under public control.

Populist demands for public control of monopolies were thwarted by the robber barons of the day, who made sure that lucrative monopolistic choke-points of the economy in transportation and finance and beyond remained in private hands. They managed a corporate takeover of state and federal governments through gerrymandering, campaign financing, perks, ‘revolving door’ jobs, and outright bribery. Progressives and New Dealers for a time pushed back on corporate power, but didn’t go as far as the populists thought necessary.

So it’s no surprise that monopoly power has never gone away, along with the economic and social disparities it exacerbates. Today it’s back stronger than ever. And that means Populism is back too. The original populist agenda of public control of monopolies combined with widespread capitalist enterprise may yet turn out to the best way to provide economic security, opportunity, and responsibility for the greatest number. And to the extent it fosters economic independence, it would also preserve liberty, or political independence–for there can be no political independence without economic independence.

But we’re far from such a happy outcome. The reborn populism of today is the cry of the wounded and the cynical, of a fraying middle class composed not of small producers (as in the nineteenth century), but of salaried workers who’ve lost the corporate security they once enjoyed.

Classic American populists understood capitalism because almost all of them were capitalists themselves, that is, small business people: farmers, artisans, professionals, traders, shopkeepers. They labored to provide a product or service at the local market price. Employees were relatively few, and worked closely with owners. Capitalism as a commercial enterprise was widely understood, even taken for granted, largely because it was so pervasive and transparent.

Modern American populists do not understand capitalism since so few of of them are capitalists themselves. Most people today work for a paycheck and–except for the vanishing species of small business owners–have little understanding of capitalism and free enterprise. The small business person has been largely squeezed out of existence. Most people are employed, directly or indirectly, by increasingly impersonal and bureaucratic corporate entities–a total inversion of the situation in the heyday of nineteenth century populism.

What, then, is the future of populism today? The huge corporate-dependent middle class which came into being in the twentieth century has little resilience in the face of economic insecurity. Old time populists, once they were politically defeated, could at least hunker down on their farms and shops and hope for the best. Ultimately, most of them ended up working for ‘the man,’ one way or another.

Today there is nowhere to go for an increasingly redundant working middle class. There is also less and less for it to do economically. Relentless automation and robotics are eating their way into most economic sectors, even the professions, putting sustained downward pressure on human employment, which has less and less value.

The problem for the emerging technical elite is what to do with everybody who’s left over, which may end up being the bulk of the population. A large consuming population has to be sustained to avoid economic collapse, even though it no longer meaningfully contributes to the production of goods and services. To stave off chaos and revolution the digitally-driven elites who run things will have to share the wealth in some way. The main option currently in vogue, at least on the left, seems to be a basic universal income of some sort, with added benefits such as universal health care, free education, etc.

The difficulty, from the populist point of view, is that this will result in a vast, dependent class of atomized consumers beholden to the central authority dispensing the largess. It will allow a small number of people to keep most of the wealth and power they already have. The populists insisted that social justice and genuine democracy necessarily go hand in hand with widely distributed ownership and control of productive resources–something they felt to be demonstrated in the small-scale capitalism of their day. That world now seems increasingly remote. But, if they are right about the connection between ownership and democracy, then the current idea of buying off the middle class–whatever its virtues–is bound to leave us with neither much ownership nor much democracy.

More articles by:

Adrian Kuzminski is a scholar, writer and citizen activist who has written a wide variety of books on economics, politics, and democracy. 

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