by Andy Langenkamp
Langenkamp is a senior political analyst at ECR Research
and political commentator, who specializes in assessing
the repercussions for the financial markets of economic
and geopolitical events.
Leftists are revolting in the streets around the world
to protest any existing status quo, but as they
unwittingly merge with Technocracy that they could
conceivably hate just as much, they are fomenting the
rise of Technopopulism.
The world is
becoming more unstable
From developing nations to rich countries,
people are taking to the streets.
Protests are leading to
bloodshed from South America to Asia. The reasons for the protests
differ, but there are a number of underlying questions:
Why doesn't everyone
benefit in equal measure from greatly increased prosperity?
Why are our liberties
Why do the political
elites enrich themselves?
The demonstrations and
the deep-seated discontent can be traced back to the crisis of
neo-liberalism and the populist response to this.
The protests can
therefore be viewed as one side of the coin, with the other side
being the top of corporate America pleading for a focus beyond the
In August, the Business Roundtable (BR)
distanced itself from the adage
that the sole reason for existence of companies is to please their
shareholders, arguing that the interests of employees, customers and
society as a whole should also be given a prominent place in
BR's call comes as business elites fear that governments and
populations will take matters in their own hands, for example via
far higher taxes on profits, expropriations, the splitting up of
In essence, the most important contemporary political-economic issue
is how to bring together three objectives in the best possible
high economic growth
a more equitable
division of prosperity (it is of course possible to
endlessly debate what is fair)
the protection of
the earth, so that future generations will also be able to
lead good lives
Populism could offer
something good here, if it has indeed woken up the elite and
encourages reforms before the entire system threatens to be brought
U.S. history illustrates this...
At the end of the 19th
century, inequality had spun out of control. The transition from an
agricultural society to an industrial one ensured that
many farmers in particular ended up bankrupt.
A 10 year depression from
1873 onwards caused even more misery.
The government was fairly powerless and did little. The emerging
wave of populism found its expression in the
People's Party, also known as
the Populist Party, and its party program, the
Omaha Platform of 1892. It
included the following fragment:
We meet in the midst
of a nation brought to the verge of moral, political, and
dominates the ballot-box, the Legislatures, the Congress,
and touches even the ermine of the bench.
The people are
The establishment was
For a long time, it
looked as though the Populist Party was on a course to seize power,
but it fell apart.
It did, however, pave the
way for the reforms of political and economic institutions by
Presidents Roosevelt, Taft and Wilson, which
served to make capitalist democracy more rewarding for the
masses and to prevent the collapse of the entire system.
In this sense, populism is ingrained in democracy and
it is perhaps a necessary correction mechanism.
As Daron Acemoglu
and James A. Robinson
When the state and
elites become too powerful, it paves the way to despotism that
silences or coerces the others to go along with it (think
But… when non-elites
become too powerful, the result is not liberty but the disabling
of the state.
As they disobey and
dismantle state institutions, those institutions atrophy, laws
become ineffective, liberty gets eroded, and the key functions
of government fall by the wayside.
The pendulum is
constantly swinging back and forth between too much power of the
elite and rebellion by the masses.
It is important to steer
a middle course here - with the elite being seated securely enough
to facilitate the proper functioning of the institutions
of capitalist democracy, but not to
the extent where clientelism and corruption prevail.
At the same time, society
as a whole should benefit sufficiently from prosperity growth and be
sure in the knowledge that it can call
the elite to account when
Parties have strayed too much from
this middle course.
- On the one
hand, there is the camp with a TINA attitude:
there is no
alternative to liberal democracy.
They have sometimes
become blind to the shadow sides of liberal democracy, and this
has led to a technocracy that has spun out of control, with
politicians essentially being managers.
- On the other hand, you have the nationalists as a
countermovement, which are shifting to authoritarianism in many
places by forcing judges to retire, stifling the press, and
tilting the playing field permanently against opponents.
Many of the current
worldwide protests are the result of political systems that offer
inadequate answers to the excesses and unpleasant side effects of
globalization, the free market and stifling bureaucracies.
People are feverishly
looking into ways of reconciling growth, more equality and
an era of globalization, the
enormous power of multinationals and forms of corruption at the top
which are distinctly more visible thanks to the Internet and other
modern technology, while protests can also gain momentum more
A negative interaction arises between more unrest and persistent low
The IMF and other organizations
have continued to lower their growth forecasts. The dollar will
strengthen in the medium term, partly because of the safe-haven
status it still has. Commodity prices will also continue to be under
This is unfavorable for many emerging markets that are already being
affected by turbulence:
they are generally
dependent on commodity exports and have taken out massive
amounts of dollar loans, which makes their debts increasingly
difficult to bear.
This creates even more
dissatisfaction and threatens to trigger a vicious circle.
Also, because those emerging economies have very young
populations and young people are more likely to take to the streets.
In addition, frustration is likely to continue to increase, as the
democratic rise has come to a standstill worldwide, and protests
have admittedly increased, but their success rate has declined
Two decades ago,
seven out of 10 protests calling for major reforms led to
Since the middle of
the previous decade, this percentage has
fallen steadily toward 30
The worldwide instability
also creates even more uncertainty among multi-nationals in western
countries about the sustainability of international production
This forces them to
continue to reduce investment and hire fewer new staff.
Clearly, at this point, global political developments indicate a
reinforcement of the downward pressure on economic growth instead of
acting as triggers to address weak growth to a sufficient extent.