From Project Syndicate
In the Middle Ages, Italian city-states led the European “commercial revolution” with innovations in finance, trade, and technology. Then something strange happened. In 1264, to take one example, the people of Ferrara decreed that, “The magnificent and illustrious Lord Obizzo … is to be Governor and Ruler and General and permanent Lord of the City.” Suddenly, a democratic republic had voted itself out of existence.
In fact, this was not an uncommon occurrence in Northern Italy at the time. As Niccolo Machiavelli explains in The Prince, the people, seeing that they cannot resist the nobility, give their support to one man, in order to be defended by his authority. The lesson is that people will abandon democracy if they are worried that an elite has captured its institutions.
Medieval Italy’s democratic institutions succumbed to what we might now call populism: an anti-elitist, anti-pluralistic, and exclusionary strategy for building a coalition of the discontented. The method is exclusionary because it relies on a specific definition of “the people,” whose interests must be defended against not just elites, but all others. Hence, in the United Kingdom, the Brexit leader Nigel Farage promised that a vote for “Leave” in 2016 would be a victory for the “real people.” As Donald Trump told a campaign rally the same year, “the other people don’t mean anything.” Likewise, former Colombian President Álvaro Uribe often speaks of the “gente de bien” (the “good people”).
There are two obvious reasons why such populism is bad. First, its anti-pluralistic and exclusionary elements undermine basic democratic institutions and rights; second, it favors an excessive concentration of political power and de-institutionalization, leading to poor provision of public goods and subpar economic performance.
Nonetheless, populism can become an attractive political strategy when three conditions obtain. First, claims about elite dominance must be plausible enough that people believe them. Second, in order for people to support radical alternatives, existing institutions need to have lost their legitimacy or failed to cope with some new challenge. And third, a populist strategy must seem feasible, despite its exclusionary nature.
All three conditions can be found in today’s world. The increase in inequality over the past 30 years means that economic growth has disproportionately benefited a small elite. But the problem is not just inequality of income and wealth: there is also a growing suspicion that the social distance between the elite and everyone else has widened.
Read the full post at Project Syndicate.
Daron Acemoglu is the Elizabeth and James Killian Professor of Economics at MIT.
James A. Robinson is Professor of Global Conflict at the University of Chicago.