The People versus Themselves: Two Views on Populism

These are tough times for lovers of freedom and democracy. After a quarter-century of spectacular progress following the fall of the Berlin Wall, liberal democracy has yielded to autocracy in a variety of countries1. And, even in thriving democracies such as the United States, voters are embracing populism in reaction to perceived economic stagnation, widening income disparity, and disruption of traditional jobs and ways of life by new technology. Among the populist ideas that have gained currency are hostility to free trade, a sharp reduction in immigration, the redistribution of income, and nationalism bordering on jingoism.

Dambisa Moyo doesn’t like it, and neither does Ian Bremmer. Moyo is a Zambian-born development economist who has risen to the forefront of global policy discussions. She has recently published a book, Edge of Chaos, arguing that populism should be combated through a renewed commitment to economic growth and a radical set of reforms to voting institutions. A resolute capitalist, Moyo believes that “the imperative is growth” and that, with patience and good policies, prosperity (not equality!) can be had, to a greater or lesser degree, by all.

Ian Bremmer, an American professor and geopolitical consultant, adopts a slightly more pessimistic tone in Us vs. Them: The Failure of Globalism. He cautions that populism will impose substantial costs on society. Bremmer recommends very conventional remedies, addressing the root causes of populism, in his view the delivery of the benefits of globalism to some while leaving out others – “winners and losers.” These remedies approximate the platform of the Democratic Party, although Bremmer says he is “neither a Democrat nor a Republican.”

The world according to Dambisa Moyo

Capitalists tend to be optimists, and as such it’s out of character for Moyo to focus on the “hurricane headwinds” that she says are inhibiting growth and progress. (In a very necessary earlier chapter, “A Brief History of Growth,” Moyo recalls how the world came to be prosperous, albeit unequally.) Among the headwinds are excessive public and private debt, scarcity of natural resources, overpopulation, climate change, an aging society, slowing productivity growth, income inequality, competition from robots, and declining educational achievement. Oy!

She’s mostly right about debt; and the world’s educational systems are, on average, unimpressive. But some of Moyo’s other concerns are misplaced. For example, it’s hard to be seriously exercised about overpopulation and aging at the same time – the two forces work in opposite directions. The population explosion is now mostly confined to Moyo’s native Africa, so it is arguably still a problem there.

But fertility rates in most of the rest of the world are way down, in many cases to below replacement rate. This is true in surprising locations, such as Brazil and Iran, as well as in the better-known cases of Japan, China, and the European Union. As a result, the biggest demographic concern in most developed and many developing countries is a shortage of young, taxpaying workers and a surplus of tax-consuming older people. Moyo mentions the aging problem in passing but isn’t really focused on it.

Infected with the virus of gloom, Moyo makes some wrongheaded claims about economic decline that seem to emanate from Donald Trump’s rhetoric:

As real wages have declined over the past several decades across much of the developed world, and many metrics that measure living standards (for example, health care and education outcomes, quality, and access), the case for focusing on the absolute rather than the relative has mounted.2