Distrustful voters threaten democracy, and new economic policies must address their problems. … [+]
The daily coverage of the election campaign (who's leading in the polls, what did the candidates say today) obscures a key underlying theme: voters deeply distrust their government. The Berlin-based New Economic Forum addressed how to tackle this crucial issue, stating that “the root causes of public resentment must be urgently addressed to avoid major damage to people and the planet,” or both democracy and economic prosperity will be undermined.
The Forum’s ambitious overarching mission is “to seek new solutions and a new inclusive paradigm for the grand challenges of climate change, inequality and globalization, and to redefine the role of the state.” It’s an ambitious agenda, but one that goes beyond old, outdated frameworks and appreciates these interconnected problems that require meaningful policy change to help people.
People's negative feelings run surprisingly deep: In a February YouGov survey of U.S. adults that asked respondents to rank a variety of factors from the “best” to “worst” decades since the 1930s, more people said the economy is worse now (32%) than it was during the Great Depression (23%).
And the negativity, while often inaccurate, is spread across a whole range of issues: Poll respondents said the 2020s was the worst decade for crime (wrong), happy families, morality, the number of scientific advances (completely wrong), and work-life balance. They also said the 2020s was the worst for fashion, movies, and popular music (what happened to Taylor Swift fans?).
Some of this negativity may have to do with what scientists call “recency bias,” which means we remember and are influenced by recent events. But these negative views of the past decade are still salient: Even with recency bias, people still wouldn't say that now is a good time.
European polls, while less extensive, show significantly more negative views of the economy and whether countries are moving in the right direction, and polls in both the U.S. and Europe reveal a wide gap between how positive people view their lives and how negatively they view their countries' trajectories.
These trends worry thinkers at the New Economics Forum (as they should worry us all). Like other analysts, they believe that an “excessive faith in market efficiency” over the past three decades is blinding policymakers to growing problems like climate change, inequality and political alienation.
These issues are especially pressing with 2024 “national elections in more than 50 countries, representing half the planet's population,” as well as European Parliament elections, where “the far right” is expected to “make significant gains.” Earlier this year, Associated Press reporter Jill Lawless wrote that these elections “will test even the strongest democracies” and could “empower leaders with authoritarian tendencies.”
To that end, the Forum recently brought together the world's leading experts in the fields of economics and politics to analyze interrelated issues and recommend productive future ways. The “Berlin Summit” examined the rise of political populism, whether Biden's economic policies can help regain the trust of alienated voters, and how industrial and climate policies can deliver shared economic benefits and increased political trust and cohesion.
The Summit's declaration, “Getting the People Back,” was signed by over 50 prominent experts with a wide range of analytical expertise and policy experience, including Mariana Mazzucato, Dani Rodrik, Adam Tooze, Laura Tyson, Thomas Piketty, and Olivier Blanchard. The Forum's work was supported by experts from the Institute for New Economic Thinking (INET), which works on research and policy analysis to promote greater shared prosperity while mitigating the market fundamentalism of mainstream economics. (I am a signatory of the Forum's declaration and previously worked at INET.)
Read the manifesto and watch the video online. The analysis finds that in many countries, “there is a widely shared experience of a real or perceived loss of control over the trajectory of life and social change.” This perceived loss of control has led to “a dangerous world of populist policies that exploit anger without addressing real risks.”
Many countries are seeing angry populist policies. Donald Trump has made angry statements about immigration, saying that if elected he would use the National Guard to circumvent legal due process and immediately deport millions of immigrants. In Germany, the far-right Alternative for Germany is coming in second to the Christian Democrats in election polls. And in India, the world's largest country, authoritarian Prime Minister Narendra Modi is stepping up his anti-Muslim rhetoric as national elections approach.
In the face of these powerful negative forces, the Forum wisely states that “we do not pretend to have definitive answers,” but they outline a forward-looking, multifaceted program that leverages industrial policy, implements new climate action, and downplays overreliance on markets as the default solution.
Most importantly, the Forum's manifesto calls on us to stand up to “populists who pretend to have simple answers.” Pointing to the compound threats of climate change, widespread inequality, and growing public distrust of government, the Forum says there is “no time to waste.” And they're right.
