At the 2017 EAEPE conference in Manchester last week the British "New Labour" politician Lord Peter Mandelson offered the participants to gather in a room and discuss the question of "becoming an economist in times of populism".
Lord Mandelson was very nice and we had a very good exchange of ideas, open enough that different positions were voiced and respected. It was not so clearcut what populism is in term of policy, and also in terms of politicians. Coincidentally, I had the last question to Lord Mandelson and I asked whether he thought that Franklin Delano Roosevelt (FDR), Democrat presidential candidate in 1932, was a populist? To get some idea of his policies, here is an excerpt form his first inaugural address:
Yet our distress comes from no failure of substance. We are stricken by no plague of locusts. Compared with the perils which our forefathers conquered because they believed and were not afraid, we have still much to be thankful for. Nature still offers her bounty and human efforts have multiplied it. Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply. Primarily this is because the rulers of the exchange of mankind's goods have failed, through their own stubbornness and their own incompetence, have admitted their failure, and abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.
True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish.
The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.
Happiness lies not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort. The joy and moral stimulation of work no longer must be forgotten in the mad chase of evanescent profits. These dark days will be worth all they cost us if they teach us that our true destiny is not to be ministered unto but to minister to ourselves and to our fellow men.
Recognition of the falsity of material wealth as the standard of success goes hand in hand with the abandonment of the false belief that public office and high political position are to be valued only by the standards of pride of place and personal profit; and there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing. Small wonder that confidence languishes, for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, on unselfish performance; without them it cannot live.
That, I think, was not a surprise speech that shocked voters, but rather a confirmation that FDR was serious about the economy and the unemployment problems. So, was FDR a populist? Lord Mandelson said no, because FDR listened to the right people when it mattered. I am not exactly happy with that answer. Instead of making my point by writing up my own ideas, let me just show you an excerpt of a 2001 speech by Tony Blair (New Labour):
But globalisation is a fact and, by and large, it is driven by people.
Not just in finance, but in communication, in technology, increasingly in culture, in recreation. In the world of the internet, information technology and TV, there will be globalisation. And in trade, the problem is not there's too much of it; on the contrary there's too little of it.
The issue is not how to stop globalisation.
The issue is how we use the power of community to combine it with justice. If globalisation works only for the benefit of the few, then it will fail and will deserve to fail.
But if we follow the principles that have served us so well at home - that power, wealth and opportunity must be in the hands of the many, not the few - if we make that our guiding light for the global economy, then it will be a force for good and an international movement that we should take pride in leading.
So, is this populism, then? Globalisation is a fact? It can't be stopped? There is no alternative? But if it can't be channeled into more benefits for everybody, it will fail? (And then...?)
I believe that the problem we face today is that we need to think very hard about who is populist and who isn't. We also need to think about whether change will come from the populists or the non-populists. Obviously, Germans elected a populist madman in 1933, but that was much clearer with hindsight than back then. If FDR is judged to have been a populist, then he was no a madman and probably a good choice. What we need now is more public debate about policies and parties, not only in the US, but also in Europe and elsewhere.
(This is not geared toward the US elections so that I've scheduled this article to appear after the election is over.)
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