If it gets into
power right wing populism typically does great damage to the economy. The
systematic
evidence is here, and we have too many recent examples: Brexit, Orbán in Hungary, or Trump and Israel’s war with
Iran. Which begs an obvious question. Why do right wing populists
seem to have so little trouble getting large amounts of funding? The
links between Trump and ‘Big Tech’ are well known, but even in
the UK a recent
league table of donations to political parties had
Reform at the top.
We could add to the
puzzle by noting that the distinctive policies pursued by right wing
populists, restrictions on the international movement of goods and
people, are also generally against the interests of large sections of
the business community. Look at the damage that Brexit
has done to the UK economy, and therefore to the firms
that make up that economy. By championing traditional energy sources
and opposing the green transition, right wing populists if they gain
power may mean their economies miss out on key future technologies such as electric vehicles. The antagonism that these populists have
for academia also makes future innovation that much more difficult.
The standard answer
to this puzzle is that right wing populists like Trump are very good
at giving large tax breaks to capital and the wealthy. In the short
term those tax cuts may more than offset the impact of reduced (or
negative) economic growth on profits and very high incomes. But
compensating for poor overall economic performance by redistributing
income in your direction is not a sustainable long term strategy.
A better answer in
my view is to stop thinking about business or capital as a monolithic
bloc, or as a unified class if you like. Many large firms are still
controlled by wealthy individuals, and some of those wealthy
individuals will have political views that align with right wing
populism. They may be very socially conservative, or even have racist
views. Racism is not something that the very wealthy
are immune to.
If you look at
donors to Reform, for example, what stands out are very large sums
donated by a small number of very wealthy individuals. The role
played by Elon Musk in financing Trump’s recent campaign is
well known. Sometimes this reflects the political
views of the individuals involved, but on other occasions it reflects
the particular business interests involved, and the role that the
government can potentially play in helping or hindering that
business. Individuals
pushing cryptocurrency are an obvious example.
Very wealthy
businessmen (is it invariably men?) using their money to further their
political views is nothing new, of course. In the US the Koch
brothers were at the forefront of pushing an anti-union,
pro-libertarian agenda. But the Koch brothers focused on issues that
could easily be described as furthering a pro-business, neoliberal agenda. What is
more unusual is the very wealthy using their money to support parties
advocating causes that appear to conflict with neoliberalism, like
restrictions on the international movement of goods and people. [1]
Three developments
have made the role played by the wealthy in pushing politicall
agendas more important than it used to be. First is that in some
countries, like the US for example, rules that used to limit the
amount that business and wealthy individuals could
give to political campaigns have been removed. Second, there is just
more extreme wealth around.
Third, just as the
fading
away of post-WWII norms against extreme right wing and racist views
have encouraged politicians to promote such views, so it has allowed
individuals like Elon Musk to give Nazi salutes in public, behaviour
that fifty or even twenty years ago would have led to social
ostracism.
An additional factor
may be that right wing populist parties and governments, that tend to
have top down authoritarian structures, are easier for businesses
with specific interests to influence. Of course industry is always
lobbying governments and opposition political parties to pursue
policies that help their particular business interests, but in
established parties that lobbying may often be opposed by other
groups. So while big
oil is pushing the Labour government to allow more
extraction from the North Sea, those efforts will be opposed by
groups within Labour concerned about climate change. It is far easier
for the oil lobby to influence Reform, for example. In addition, as corruption is
more endemic in right wing populism, it follows that it is easier
for business to buy influence. That observation may
be a factor in which parties big oil supports.
In this sense it is
not capital as a class that is enabling the rise of right wing
populism, but elements within that class, where for ideological or
particular business interests these elements are willing to ignore
the negative impact that right wing populism will have on the economy
as a whole. But a question remains why other business interests or
wealthy individuals which do not have these populist views or particular business interests, and
who will be concerned about the damage a right wing populist
government will do to the economy, don’t fight back. Why don’t they
provide larger financial donations to more mainstream parties, and
why don’t we see more of their leaders arguing against the policies
that right wing populism pursues?
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