Epley sees immigration and inequality as two of many factors that feed into identity politics. “It isn’t inequality per se, so much as the divide it creates between ‘us’ and ‘them,’” he says. Epley notes there are other sources of division, citing research led by Jacob Westfall, now a data scientist at Home Depot’s data-driven pricing group BlackLocus, which finds that Americans consistently overestimate the extent of political polarization. “Partisanship can be driven by beliefs about partisanship—believing that the other side is more extreme than it actually is,” Epley says, “and it’s not obvious to me that that has anything to do with inequality.”
Epley notes that economic trends can fuel identity-based behavior, such as attacks on minorities and newcomers. University of Georgia’s E. M. Beck and Stewart E. Tolnay of the University of Washington analyzed lynchings of African Americans in the Deep South between 1882 and 1930, and find racial mob violence was more common at times when cotton prices were low and inflation was rising. You might well expect economic stress to lead to violence, but the fact that it led to racial violence suggests it has something to do with identity, Epley says.
In The Third Pillar, Rajan indicates how technology and globalization could fuel the assertion of identity, acting as “centrifugal disorientating tendencies” for those in communities that have been left behind. As well as turning people in these communities against out-groups, this disorientation provokes a nostalgia for a perceived glorious past. “When the proximate community is dysfunctional, alienated individuals need some other way to channel their need to belong,” Rajan writes. “Populist nationalism offers one such appealing vision of a larger purposeful imagined community.”
Identity politics reflect political rather than economic factors, says Howell. “There is a reasonably well-defined group of people—predominantly white, Christian, working-class Americans who mainly live in Red [Republican-voting] America—who constitute Trump’s base, who imagine themselves as true, real Americans,” he says. “Populism is a form of identity politics, but it’s not exclusively about identity. It’s in the aftermath of political failure that these appeals take on an identity characteristic. It’s the sense that you were right to expect the government to do something on your behalf, because you are quintessentially what it means to be American.”
Booth’s Reid Hastie—whose 2014 book Wiser: Getting Beyond Groupthink to Make Groups Smarter, coauthored with Harvard’s Cass R. Sunstein, analyzes the mechanisms of phenomena such as polarization—says the psychological explanation for populism should look beyond identity. There are three big psychological factors whose interaction with macroeconomic forces help explain political populism, he says: instrumental politics, when people vote according to rational self-interest; symbolic politics, when people support candidates who speak to their personal values; and partisan politics, when voters rely on cues such as party affiliation. “I see all three factors in play,” Hastie says. “Noncollege-educated white men might be mostly driven by symbolic factors, but college-aged populists might be mostly driven by instrumental factors. Anti-immigrant sentiment might be mostly an identity issue linked to symbolic politics, but views about taxing the rich might be mostly instrumental.”
Hastie speculates that one response to the “why now?” question relates to the growth in social media, and he notes that polarization and groupthink can amplify causal forces. “If there is a tendency for electronic media to create partisan echo chambers, populist tendencies can be amplified for individuals who start out oriented in the populist direction.”
What should be done?
For some scholars, populism is a scourge that needs to be defeated. For others, it is a wake-up call. Some think populism can be harnessed for good. Others are pessimistic about where it is taking us.
Yet many economists agree that redistribution is critical to any response. “The textbook perspective is that globalization is good because it makes the pie bigger. Then we can always redistribute [wealth] and make everybody better off,” Pastor says. “The problem is that this latter part is not happening. People talk about how [wealth] could be redistributed, but it’s not actually getting redistributed. And that’s where populism is coming from.”
Given their focus on consumption inequality, Pastor and Veronesi posit that an appropriate response would be a form of progressive consumption tax, such as a very high value-added-tax rate on luxury goods, accompanied by negative taxes on consumption for the poorest, a solution Pastor admits is unrealistic.
Rajan, while not opposed to redistributive taxes, says those alone won’t address the concerns of communities that have lost their economic infrastructure. He prefers localism—policies that devolve power to local communities yet prevent them from becoming insular. These policies could include reforming zoning laws, encouraging affordable housing, and creating tax incentives for people to stay in poor neighborhoods.
Howell agrees there is work to be done in restoring local communities but argues that the most serious challenges will only be solved by national governments. “When you think about global immigration patterns, climate change, or structural changes to the economy or globalization, it’s hard to see how, community by community, we’re going to make headway on this.” His preferred response is to reform and strengthen national political institutions.
Bertrand wants to see redistribution used for policies that help support displaced workers, whether with economic benefits or education and retraining. But echoing Rodrik’s trilemma, she is pessimistic that politicians are capable of addressing some of the serious challenges. “So many issues that we face cross border lines—such as climate change and immigration—that it’s hard to imagine how we’re going to deal with them with national governments,” Bertrand says.
Robinson and Zingales both see populism as a movement that could be used for positive ends. And both cite the US populist movement of the 1890s, which emerged at a time of rapid technological change, economic growth punctured by financial crisis, rising inequality, anti-immigrant sentiment, declining trust in institutions, and a process of globalization whose benefits were not felt by many Americans. That movement evolved into the progressive politics of presidents including Theodore Roosevelt, William Howard Taft, and Woodrow Wilson, who set about reforming political and economic institutions, ultimately making them stronger and more inclusive.
Robinson notes that progressives achieved this by building a coalition that included, for example, people advocating for stricter immigration controls. In an article in Foreign Policy, Robinson and Acemoglu argue that a 21st-century coalition could focus on the shared priorities of both sides, such as improving access to health care, raising the quality of education, and updating infrastructure. Constructing such a coalition might require agreeing to tighten immigration, they note, pointing to Denmark, where the Social Democrats adopted more restrictive controls, but also cut the vote share of the right-wing populist Danish People’s Party by more than half in the 2019 election.
Zingales supports the idea of trying to make politics more inclusive, although he focuses more on changing public decision-making to introduce more direct democracy. But these days, he is less troubled by the challenge posed on behalf of the have-nots than by the response of the haves. “The problem these days isn’t populism; it’s elitism,” he says.
What really caused populism, in his view, may be secondary to what populism may cause. While social scientists debate the populism puzzle, a new, bigger challenge may emerge. Zingales worries that elites could conclude that liberal democracy is too precious to be left to voters. “We are heading toward a battle between democracy and, for lack of a better term, technocratic authoritarianism. And whether it’s the Chinese form or some elite of the US Democratic party, it doesn’t matter—it’s very dangerous.”