The Growth of Populism, Polarisation and Nationalism: Causes and Consequences
The growth of populism, polarisation and nationalism has
On 17 May at 7 p.m., the Rafael del Pino Foundation organised the dialogue "The growth of populism, polarisation and nationalism: causes and consequences", with the participation of Jesús Fernández Villaverde, Luis Garicano and Tano Santos.
Jesús Fernández Villaverde has been Professor of Economics at the University of Pennsylvania since 2007 and is a member of the National Bureau of Economic Research (NBER), the "group of one hundred" and the editorial board of relevant national and international publications. He holds a degree in Law and Economics and Business Administration from ICADE and a PhD in Economics from the University of Minnesota.
Luis Garicano holds a degree in Economics and Law from the University of Valladolid, a Master's degree in European Economic Studies from the College of Europe in Bruges, a Master's degree in Economics and a PhD from the University of Chicago. In 2017 he joined IE as Professor of Strategy and Economics, where he directs the Center for the Digital Economy. Luis Garicano has developed his extensive teaching career at the University of Chicago and the London School of Economics, where he has served as a full professor and professor; he has also been a visiting professor at MIT and London Business School. He has also held positions as an economist at the European Commission and at McKinsey & Company. He was recently elected Vice-President of ALDE - Alliance of Liberals and Democrats for Europe, and is currently Head of Economics and Employment at Ciudadanos.
Tano Santos is co-director of the Heilbrunn Centre at Columbia University Business School. Professor Santos completed his PhD at the University of Chicago in 1996. From 1996 to 2003 he was a professor at the University of Chicago Business School, joining Columbia University Business School in 2003, where he currently holds the David and Elsie Dodd Chair in Finance. His research ranges from asset valuation to organisational theory. His publications include three articles in the Quarterly Journal of Economics, two in the American Economic Review and two in the Journal of Political Economy. Tano Santos reinforces CEMFI's academic team in the area of finance.
Summary:
On 17 May 2018, the Rafael del Pino Foundation hosted a dialogue on "The Growth of Populism, Polarisation and Nationalism: Causes and Consequences", with the participation of Jesús Fernández Villaverde, Professor of Economics at the University of Pennsylvania; Luis Garicano, Professor of Economics and Strategy and Director of the Center for Digital Economy at IE Business School; and Tano Santos, David L. and Elsie M. Dodd Professor of Finance and Co-Director of the Heilbrunn Center at Columbia University. Dodd Professor of Finance and Co-Director of the Heilbrunn Center at Columbia University. For Tano Santos, populism is a language, a form of communication, to form a majority that can then be given content. Its economic policy proposals are characterised by an emphasis on short-term measures, to the detriment of the long term, which is when the costs of these decisions emerge. The problem, in this respect, is that politicians tend to get sidetracked and think in the short term. Moreover, when rules are established, such as, for example, the independence of monetary policy, populism criticises them and says that these rules go against the will of the people, without talking about the consequences of abolishing them. Jesús Fernández Villaverde, for his part, stresses that populism has a well-structured discourse, in which it establishes a clear difference between the elites, whom it accuses of trying to extract rents, and the people, who are the ones who suffer. This vision of an alternative discourse is important because it explains the behaviour of populism. For example, if there is talk of financial and monetary regulation, populism will say that this is all for the benefit of the rich, thereby eliminating such regulation and the long-term goals it seeks to achieve. The problem with all this is that there are long-term challenges, such as demographics and climate change, where the populists' response to them constrains the way they address them. And that is an element of concern because the new normal in Europe over the next twenty years is that no party in any country is going to have an absolute majority. Luis Garicano added to the characteristics of populism the existence of a charismatic leader, a leader who claims to represent the will of the people. Garicano is also concerned that we are on the verge of things going wrong in the West because of populism. He is also concerned about the lack of reaction from the people who should be reacting to these phenomena, as in the cases of Catalonia or Donald Trump. All of this is a cause for concern because the barriers against this type of problem are much weaker than we think, especially when there are actors who deny the legitimacy of the system and who are disloyal to its constitution. In this sense, Tano Santos reminds us that institutions are designed to protect society against the arbitrariness of power. For this reason, the first thing populists want to do is to destroy these institutions, since the will of the maximum leader does not accept any restrictions. Jesús Fernández Villaverde distinguishes between two types of populism: those that have a strategy and those that lack one. Pro-independence supporters have a strategy, which articulates a course of action. Populisms such as Trump's do not, which makes them more unpredictable, but less dangerous, because they do not know very well what they want. Luis Garicano adds, in this respect, that in populism there are intellectuals who have a plan, against which there are elites who do not do what they have to do. As for the common factors that explain populism, Luis Garicano explains that many people think that what underlies populism is a cultural phenomenon. However, if populism appears everywhere, and while in some places it is left-wing in others it is right-wing, then the substratum must be economic, not so much cultural. Because of technological change and globalisation, there are segments of the middle class that are fearful of the future. In this context, the tribe makes a lot of sense when a common need is felt. Jesús Fernández Villaverde recognises the effect of technological change, but also in cultural elements, as social norms change. In addition, there is a very important common factor: immigration. When inequality grows, there are people who blame it on immigrants and want to return to previous situations in which immigrants were not there. Tano Santos points out that all these changes affect people very unequally. There are people who are favoured by technological change, because of their training and knowledge, while there is a percentage of the population who are anxious about the consequences of these changes and are demanding more security, in the form of more welfare state, more social policies, etc. This technological part is also important in forming identities. Polarisation is a consequence of this technological change, which makes people connect and polarise. Jesús Fernández Villaverde warns that these things may develop over twenty or thirty years, but the long-term consequences are not easy to see. For this reason, Luis Garicano believes that it is necessary to lead the future and protect citizens from this uncertainty. Polarisation coincides with social networks, but also with the new media, which do not have all the information. Tano Santos added that we must rethink the welfare state, which must be designed to deal with these things. Fernández Villaverde concluded that it was necessary to be alert to the deterioration of institutions: it was not a question of repressing populist discourse, but of protecting institutions.
The Rafael del Pino Foundation is not responsible for the comments, opinions or statements made by the people who participate in its activities and which are expressed as a result of their inalienable right to freedom of expression and under their sole responsibility. The contents included in the summary of this conference are the result of the debates held at the meeting held for this purpose at the Foundation and are the responsibility of their authors.
The Rafael del Pino Foundation is not responsible for any comments, opinions or statements made by third parties. In this respect, the FRP is not obliged to monitor the views expressed by such third parties who participate in its activities and which are expressed as a result of their inalienable right to freedom of expression and under their own responsibility. The contents included in the summary of this conference are the result of the discussions that took place during the conference organised for this purpose at the Foundation and are the sole responsibility of its authors.
