Fiona Hill Explains the Worldwide Populist Backlash

For the American reader, her précis of the English class system is the traffic accident you can’t look away from. From puberty, lower-class Brits who encounter posh colleagues can expect a lifetime of this three-question metronome: Where are you from? Where did you go to school? What did your father do? One wrong answer will lead to a near-visceral reaction, labelled as “urine face” by one of Hill’s colleagues, a reaction she most notably elicited from former Prime Minister Tony Blair before he recovered and insisted on selfies.

Americans, though, should not feel too smug; it did not take her long to encounter our version of urine face – and mouth – which came from a pizza shop owner when she accompanied a black associate to pick up pies for a departmental event, and from campus police who falsely accused African American Harvard (her alma mater) students of stealing their own devices on the way to the computer lab. Hill’s elevation from pariah in England to aristocrat status among Americans, who did not know that back home her accent marked her as lower class, elated her – until she realized that her white skin was the prime driver of the promotion she received on this side of the pond.

There is Nothing for You Here is filled with compelling personal observations about the worlds of academia and politics, the most poignant of which revolve around her near invisibility as a woman in the corridors of power. As her career progressed, Hill regularly found herself mistaken as a note taker, departmental secretary, or tea lady when in fact she was a keynote speaker or meeting principal. In 2004, she wondered how she came to sit next to Vladimir Putin at dinner. Was she judged by his security detail least likely to stab him with her cutlery? Did he mistake her for an intriguing covert spy master? No such luck; the Russian woman on Putin’s other side informed her that they both had been chosen because of their non-descript middle-age plainness – not too beautiful, not too ugly, and not a man – any of which would have attracted comment. They served, in short, as the geopolitical equivalent of potted plants.

Viewed from the 30,000-foot height of modern human history, Schumpeterian creative destruction is a symphony of political economy, building vibrant new industries over the ruins of dying old ones. Alas, at ground level it’s a deadly, grinding business, and one that Hill saw up close and personal, which she describes in heart-rending detail as the coal-based economy of her northeast England hometown of Bishop Auckland imploded during the 1980s mine closures: “When a mine or factory closed, there was no work, nothing to do, nowhere to go. Thriving industry-built cities became shattered ghost towns. Everyone was stuck in place, trapped in a time that had passed.” (The book’s title comes from words spoken by her father as he implored her to seek her fortunes elsewhere.)

Hill makes clear that the catastrophe that befell her hometown played out around the developed world during the last third of the twentieth century, as factory work gave way to the service economy, an economic neutron bomb that destroyed the lifeblood of Youngstown in Ohio and Magnitogorsk in Russia as it had in Bishop Auckland in England.

This transformation cleaved the developed world into two halves: to one side, London, San Francisco, and even Moscow, recently transformed from the shabby, tumbledown city Hill first visited in the late 1980s into a glittering boom town. On the other side of this great economic divide lay the economically bombed-out hulks of rust belt towns around the globe.

The dearth of economic opportunity on the wrong side of the tracks in the United States is even worse than that in the UK, and more so still in today’s Russia: An American child from the bottom fifth of the economic ladder has less than an 8% chance of making it to the top fifth as an adult – in some states in the deep South, this is closer to 4%– versus 12-14%in the rest of the developed world. Hill compellingly ascribes this lack of opportunity to the disappearance of the “infrastructure of opportunity,” especially the well-funded schools and scholarships available to her in the 1970s and 1980s, which were drastically cut back under Thatcher, Reagan/Bush/Clinton, and Yeltsin; she is acutely aware that had she been born a mere decade later, she’d have found her path through Scotland’s St. Andrews University and Harvard to the White House blocked. Where this infrastructure is still available, the results can be dramatic, as it is in central London, where half of poor children go on to university, versus only a quarter in northern England, where well-funded schools and scholarships are scarce. Where it is not available, the absence can be as devastating as it is banal, as in Tobytown Maryland, an impoverished African-American suburb of Washington DC whose workers can find it nearly impossible, because of woefully inadequate public transportation, to get to work.

For Hill, the link between the erosion of this opportunity infrastructure and the rise of nationalist populism in all three countries is clear, particularly in the United States, where poor students lucky enough to graduate college often face a lifetime of crippling educational debt. Bishop Auckland, for example, voted in favor of Brexit by a 62-38 margin and recently elected a Conservative MP for the first time in a century; and Hill frequently heard pro-Trump sentiments from her husband’s rust-belt relatives: “Populists play in the gaps created by generational and demographic change, divergent economic circumstances, competing social and cultural identities, and along the seams of inequality.”

It’s not too much of an oversimplification, she notes, that all three nations have fissured into warring halves – the winning and losing sides in the new post-industrial world, that, because of their physical and social geography rarely come into meaningful contact with each other. One is reminded of film critic Pauline Kael’s supposed incredulousness at Ronald Reagan’s election, “No one I know voted for him.” (In other versions of this apocryphal quote, it’s Richard Nixon.)

Hill points out that just as Donald Trump masterfully exploited this fissure in the U.S., and as the Brexiteers did so in the U.K., so too did a particular Russian – Vladimir Putin – whose Internet Research Agency flooded both Democrats and Republicans disaffected by the nation’s neglect of its industrial heartland with misinformation during the 2016 campaign. Reasonable people can argue whether this affected the election, but what is not in doubt is that our adversaries in Russia, China, and elsewhere will continue to exploit these widening social and political cleavages.

While the author supplies a long list of praiseworthy public and private solutions to the opportunity infrastructure problem, she ignores the fact that such programs take on a self-perpetuating life of their own and so accrete layer upon layer, a sclerotic process so well described by the late American economist Mancur Olson. Nor does she prioritize her suggestions, which is a shame, since there is a burgeoning economic literature demonstrating that the earlier in life the intervention, the higher the payoff, a fact that collides with Olson’s dismal calculus: The recipients of Social Security and Medicare vote, while the beneficiaries of universal childcare and preschool do not.

Despite these flaws, Hill’s tour d’horizon of the worldwide populist backlash is an essential, and highly enjoyable, essential reading for anyone who cares about the health of our economy, our society, and our democracy.

William J. Bernstein is a neurologist, co-founder of Efficient Frontier Advisors, an investment management firm, and has written several titles on finance and economic history. He has contributed to the peer-reviewed finance literature and has written for several national publications, including Money Magazine and The Wall Street Journal. He has produced several finance titles, and four volumes of history, The Birth of Plenty, A Splendid Exchange, Masters of the Word, and The Delusions of Crowds about, respectively, the economic growth inflection of the early 19th century, the history of world trade, the effects of access to technology on human relations and politics, and financial and religious mass manias. He was also the 2017 winner of the James R. Vertin Award from CFA Institute.

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