The political future of advanced nations is more uncertain than ever

8 Dec 2016 Ryan Miller    Last updated: 8 Dec 2016

2016 has been a remarkable year for politics but don’t draw a line under anything as we approach the new year – now, as much as ever, it is destination unknown.

It has been another big week for the western political establishment.

PM Theresa May has signalled her intention to have MPs vote for an amendment securing explicit backing for the government’s plans to knock down the first formal domino of Brexit before April next year.

Italian Prime Minister Matteo Renzi has resigned after losing a referendum by 20 percentage points, while in Austria the Eurosceptic Norbert Hofer lost by a comfortable (but not too comfortable, for those seeking to strengthen the European Union) 7% margin to pro-EU Alexander Van der Bellen.

In the case of Renzi, there are numerous reasons why people might have voted against him. Italy has seen slow economic growth, there are grumbles about membership of the EU, calls for withdrawal from the Euro, and immigration is a live issue.

The country is also home to the same anti-establishment populism that has grown throughout the west – in significant part due to the issues above – while Renzi himself had already promised to resign if the referendum was defeated, making it a de facto poll on his own premiership, for anyone who wanted to see it that way.

Many reasons why someone might have voted against the now-former PM’s vision of change, and none of those reasons even directly reflect what was on the ballot – which was not about Europe, not immigration, not free markets, but reform of the Italian constitution to rebalance power towards government and away from the Senate.

This anti-establishment wave has huge power and, for now, this incoherence is its strength. It represents change, and people want change.

But that is also its weakness. There is an absence of any truly specific vision. Power brings scrutiny, responsibility, and expectations. However, it is very difficult to identify a single narrative that brings all these voters seeking change together.

What happens if people do not get the change they want? What happens if nothing really changes?

Behind the votes

Plenty has been written about the definitive reasons behind the many votes for change taken throughout 2016. This requires some moderation.

It is fair enough to identify some strands of thinking behind the upheaval but we are talking about tens of millions of people casting votes; their motivations will be diverse.

Within the EU especially (although in the US both Congress and the two main presidential candidates this year are held in historic disdain) some of the rising nationalist and Eurosceptic blocs are based in part on a desire for greater national sovereignty. Critics might say this is a nonsense and that Europe could hardly be more democratic.

Perhaps they have a point but it is also true that, unlike many other civil matters, when it comes to democracy perception is reality. If individuals feel like they have no say and that they are removed from the democratic process then this is necessarily true, to some extent. Democracy has to be understood by voters, and has to be seen to be done, to function properly.

The problem for this new wave is what will happen if they take power and that feeling does not go away.

The main issue, however, is probably immigration. But this is not straightforward. Broadly, it comes in two parts.

Cultural fears – real or perceived - relate to the pace of change of local society and also worries about the acute malignancy that is terrorism. Will this be assuaged at a local level by, for example, the UK leaving the European Union? The answer is not clear.

Then there are economic fears. These, too, might be real or perceived – but they undeniably form part of a general stagnation and a struggle for the majority that is a deep cause of dissatisfaction

Behind the numbers

Wage growth for low and middle earners has been flat for years, while high earners have seen good growth. Many, if not most, throughout the west feel increasingly economically insecure, with little hope on the horizon.

Globalisation has been identified as a major cause of this – whether that means inward migration putting pressure on public services, and flooding the jobs market making work more scarce and causing a decrease in wages; or open trade borders that has seen work, such as manufacturing, move overseas.

But economics is not a zero sum game and most of these arguments either do not stand up to scrutiny, are overstated, or fail to take into account the benefits that free markets have brought.

For instance, in the USA manufacturing, even when adjusted for inflation, is the highest it has ever been.

However, jobs in this sector have been falling – with 85% of losses attributable to automation (robots, basically) rather than trade leading to jobs moving elsewhere.

The Joseph Rowntree Foundation has just released a new report into poverty in the UK, finding that there are record numbers of people experiencing in-work poverty, and that there is growing insecurity underneath a moderately positive general economic picture.

The most striking intervention made on this galling trend was made by Mark Carney, the Governor of the Bank of England, who said globalisation is not working because lower earners in rich countries are being left behind, free markets do not work on their own, and there have been uneven gains from developments in trade and technology.

He has called for greater government interventions to stem this tide of growing struggle amongst an enormous number of people both within the UK and other advanced nations.

Globalisation has done plenty of good but it is also leaving a huge number of people behind.

It is impossible to know how significant a driver this has been in the political upheaval of 2016, but if the trend is not dealt with by whoever is in power – be they the new populists or the same old, same old – there will be further upheaval to come.

People want change because they think established politics is not doing well enough (although this sentiment means many different things to many different people). If the populist backlash also fails then the future is impossible to predict.

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