En 1952, Juan Peron, Argentine president, wrote to his newly elected Chilean counterpart: “My dear friend, give the people, especially the workers, everything that is possible. If you feel like you’re already giving them too much, give them even more. We will try to frighten you by raising the specter of economic collapse. But this is all a lie. There is nothing more elastic than the economy. »
Populism ignores all constraints, even if it means creating chaos. Argentina’s modern history is thus punctuated by periods of excessive spending and hyperinflation. Javier Milei proposes an opposite policy, but just as outrageous. Libertarian, he wants to abolish the central bank and the national currency.
The real novelty is that populist victories are no longer reserved for South America, but also affect Western democracies. The right-wing populists stand out on the cultural axis rather than the economic one. They redefine the national community and reaffirm its borders. In Italy, Giorgia Meloni stigmatizes immigrants and sexual minorities while pursuing a conservative economic policy. In the Netherlands, Geert Wilders came out on top by promising to push back asylum seekers and talking about leaving the European Union.
A profound change is needed
One trait unites populists of all stripes: hatred of the cosmopolitan elite, who defend their interests at the expense of the people, a homogeneous and virtuous entity. To counter this discourse, moderate parties know that they must start by removing political leaders convinced of corruption.
But the technocratic and intellectual elite should also question themselves. Seduced by their models of international trade, economists have, for example, long exaggerated the benefits of economic globalization. Populist parties have been able to attract the losers of international competition and owe a good part of their rise to them.
Today, economic science is more attentive to the facts and has equipped itself with effective tools to evaluate public policies. But a deeper change is needed. Economists can no longer be content with a normative stance, advising the prince the reforms they deem optimal. They should spend at least as much time studying the roots of the ambient anger and identifying the conditions under which new policies can be accepted, and, who knows, break the populist wave.
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