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Global Inequality, Populism And The Future Of Democracy

The election of Donald Trump to the US Presidency as well as the seemingly inexorable ascendency of right-wing populism in Europe has raised troubling questions about the future of democracy. Which is the relationship between global inequality and the future of capitalism and democracy? www.socialeurope.eu

The election of Donald Trump to the US Presidency as well as the seemingly inexorable ascendency of right-wing populism in Europe has raised troubling questions about the future of democracy. In his new book, Branko Milanovic (BM) discusses the relationship between global inequality and the future of capitalism and democracy, respectively (a related interview has been published here). Whereas BM thinks that inequality and capitalism can co-exist, he is sceptical with respect to democracy. While he characterizes the American form of plutocracy as “maintaining globalization while sacrificing key elements of democracy” (p. 211), he sees European populism as “trying to preserve a simulacrum of democracy while reducing exposure to globalization” (ibid).

However, the Trump election teaches us that plutocracy and populism eventually go well together. With reference to Milanovic’s famous “elephant graph”, it is straightforward to see why this should happen. Three important observations can be inferred from the graph: firstly, very remarkable income gains in emerging economies, in particular China and India, have led to the emergence of a new middle class in the Global South. Second, income for the middle class in advanced Western countries has stagnated. Thirdly, the income of the Top 1 percentile, i.e. the global super rich, has also grown very substantially, while being still underestimated according to BM.

The elephant, Trump and the working class

Two political interpretations of these facts are obvious. A left narrative would draw the central political conflict line in the EU and US between the working population and the rich elite and call for redistribution from the rich to the middle and lower strata of the population. Clearly, such an interpretation constitutes a threat to the privileges of the plutocratic elites.

The populism of Donald Trump should thus be seen as a Gramscian hegemonic strategy based on an alternative reading of the elephant graph. His brand of populism combines two elements. First, by way of exploiting the correct fact that large segments of the US working class have indeed not benefitted from globalization, he is juxtaposing the US middle class against workers in emerging economies by invoking antagonisms such as “We Americans” against “Mexican immigrants” or “our jobs” against “cheap imports from China”. Thus he reframes an economic issue into one of identity and diverts attention away from class antagonisms between rich and poor. Second, upon that basis Trump has promoted a political project of “America First”, which reconstructs an imaginary community of “hard-working” Americans.

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