The best response to populism is active government policy. We need more and better smart liberalism.
The current wave of right-wing populism is best understood as nostalgia for a romanticized past, combined with xenophobia.
Same old song
In a couple of generations, most of today’s jobs will be gone. Labor as we know it will hardly exist. We must begin now to share the few jobs that remain by moving people out of the labor force through a restricted work week and early retirement. Scarce employment opportunities must be rationed.
We can (implausibly) imagine this conversation on either side of the North Atlantic in the year 1700. As the industrial revolution approached, more than two-thirds of the labor force worked in agriculture. Many of the remaining workers provided blacksmithing, cart-making or other work closely related to growing food and fibers.
The warning of disappearing jobs would have been correct. Today, fewer than one in ten workers is employed in agriculture in every advanced economy on earth. But the radical reduction in the importance of jobs in agriculture did not end job opportunities more broadly.
Restructuring of the labor force came about, of course, through the growth of factory jobs and other work only nascent in 1700, along with migration and urbanization.
Nor did technological change in manufacturing kill employment, as workers predicted when mechanization replaced skilled work in the English textile industry.
The Luddites of the early 19th century were right about the loss of many of their jobs, but they were wrong about the long run prospects of workers in the increasingly dynamic industrial economy.
These historical facts are common knowledge. Yet, the “nostalgic xenophobia” (right-wing populism) that currently is sweeping the advanced world both nurtures and feeds on many of the same hopes and fears as earlier reactions to economic and demographic change.
The challenge confronting western democracies is how to meet the needs of distressed families who look backward to find their romanticized model for the future.
Brave new world of personal trainers
Nobody in 1700 would have believed that in 2014 there would be more jobs, in the biggest economy in the world, in “computer software development and design of computer programs” than in “agricultural labor” (1.1 million vs. 0.8 million).
Nobody in 1700 would have had a clue what those 1.1 million people were doing. The vocabulary, to say nothing of the jobs, would not yet have been invented.
Indeed, the United States Bureau of Labor Statistics predicts that between 2014 and 2024, total U.S. employment in jobs described as “Agricultural workers” plus “Logging workers” will decline by 50,000, while jobs described as “Software developers design(ing) computer programs” plus “Fitness trainers and instructors” will grow by more than 200,000.
Having passed the point where there are more software designers than agricultural workers, we are well on our way to becoming an economy with more personal trainers than agricultural workers.
The almost continuous development of new economic activities and associated jobs is unlikely to stop. While it is possible that working men will follow working horses to the margins of economic activity, it is more likely that in the future, as in the past, most people who look for work will find a job.
So how can the distress of those caught in ebbing parts of the economy and declining regions be ameliorated before it turns to attacks on minorities and enthusiasm for fantasies of a return to the future?
Give us the old time religion
The best response to populism is active government policy. We need more and better liberalism.
1. Respect real problems
The jobs of the parents often no longer exist for the children. Income is becoming more and more concentrated at the very top of the income distribution. Entire regions decline with their economic bases. These real phenomena create real hardship.
And while it may be true that tribalism or racism is the natural state of the human soul, there are myriad examples of cultural, ethnic and genetic mixes that have thrived and enriched the world. So when people get nasty, we should assume that they have real grievances, even if they lack useful prescriptions.
2. Look forward
Policy should support new “human capital formation” over preservation of historical activities. Heath and education are essential for adaptation to challenges. People’s flexible adjustment to change should be the goal of policy, not resistance to change.
3. Support people as they age
As life expectancy and years in education increase, support of individuals and families must be available to people who are older than in the past.
4. Prepare for change and diversity
General education and training must prepare workers more for social challenges (such as how to interact with people in a diverse society) and less for physical challenges (specific crafts and skills) than in the past.
5. Pay from the winnings
Education, training, counseling, family leave, health care and other essential services, which must be expanded, should be financed by progressive taxes that fall most heavily on those who benefit most from economic trends.
Today, these are the very rich.
**Bernard Wasow is an economist who has been a member of the faculties at the University of British Columbia, the University of Nairobi and New York University. He has been a visiting professor at Columbia University, Monash University and the Central European University, in Prague.
Mr. Wasow has also worked in the research department of the Federal Reserve Bank of New York and as a program officer at the Ford Foundation. He has also been a senior fellow at the Century Foundation.
Beyond teaching, his extensive overseas experience includes a year each in Puerto Rico, with the Committee to Study Puerto Rico’s Finances, and in Bangladesh, with the Harvard Institute for International Development. He also participated in World Bank missions to Kenya, Mongolia and Indonesia.
Mr. Wasow received his B.A. degree from Reed College and a Ph.D. in economics from Stanford University. He spent a year as a DAAD Fellow at the Free University of Berlin. His publications are primarily in the fields of international economics and development.