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IS CANADA DESCENDING INTO TRUMPISM?

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By Eric Protzer and Paul Summerville

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The Montréal Review, February 2022

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RECLAIMING POPULISM: HOW ECONOMIC FAIRNESS CAN WIN BACK DISENCHANTED VOTERS
By Eric Protzer and Paul Summerville (Polity Press, 2022)

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2016 left Canadians both aghast and smug. The summer delivered Brexit and the autumn delivered Trump, marking abrupt shifts in the national political histories of two of our closest allies. These events seemed alien not just due to the sudden break with the status quo temperaments of the UK and US, but because of the sense that they could never happen in Canada. Trump in particular fed the element of Canadian identity that is derived from doing things differently, and more sanely, than Americans.

Yet six years on, Canada faces an enormous ‘Freedom Convoy’ of truckers protesting against COVID-19 restrictions that the Ottawa Police Services Board has called an “insurrection” – conjuring comparisons to the January 6 2021 Capital Riot in the Washington DC. Nazi and confederate flags have appeared in these protests, and some talk about its goals in terms of “overthrowing” the federal government. This has all happened against the backdrop of rising support for Maxime Bernier’s immigration- and vaccine-skeptic People’s Party of Canada in the fall 2021 federal election.

Was Canada wrong to think it could avoid the same fate as its British and American cousins? Does the Freedom Convoy mark the start of a new, populist chapter in Canada’s political trajectory? What can policymakers practically do to guard against this eventuality?

Our new book Reclaiming Populism: How Economic Fairness Can Win Back Disenchanted Voters leverages original research – cited by the European Union, United Nations, and International Monetary Fund – to show that the ultimate result will not be simply left to chance. In fact, a critical factor will shape the future of Canadian populism: how fair the broader economy is, beyond isolated issues like COVID-19 restrictions on truckers.

...a critical factor will shape the future of Canadian populism: how fair the broader economy is, beyond isolated issues like COVID-19 restrictions on truckers.

When voters feel like economic success unfairly depends on family wealth and elite corruption, disgruntlement with specific socioeconomic issues can easily spill over into wider frustration – with severe populist results. But when most people instead feel that success results fairly from talent and effort, anti-establishment moments are less likely to explode into mass upheaval.

This pattern has played out before in some of Canada’s closest friends and allies. Consider the way the UK slid into Brexit after a spate of Eastern European countries joined the EU in the early 2000s, leading to increased migration flows to Britain.

The political discussion started as a specific reaction to increased immigration. But it quickly got caught up in the UK’s rock-bottom social mobility, feeding a sense that those outside London had been left behind in favour of newcomers. As a consequence support for Nigel Farage’s United Kingdom Independence Party escalated, and eventually David Cameron was pressured into the Brexit referendum that would leave the country forever changed. The Leave slogan “take back control” encapsulated the associated frustration; voters felt abandoned and ignored on many fronts.

When voters feel like economic success unfairly depends on family wealth and elite corruption, disgruntlement with specific socioeconomic issues can easily spill over into wider frustration – with severe populist results. But when most people instead feel that success results fairly from talent and effort, anti-establishment moments are less likely to explode into mass upheaval.

In contrast, consider the way the Scandinavian countries handled the 2015 European Migrant Crisis. Enormous streams of refugees came into Northern Europe, and the governments of Denmark, Sweden, Norway, and Finland struggled to respond. This created a definite populist moment. The anti-immigrant Sweden Democrats were, for example, buoyed to as much as 20% of the vote in national elections.

Yet the Scandinavian countries also famously enjoy the highest rates of social mobility in the world. Many citizens can get ahead on talent and effort regardless of their family background, and so they feel the system is broadly fair. This made it very difficult for Nordic populists to connect with a wider sense of a rigged system. Ultimately, the Nordics voted for populists at rates around just 13% in the 2019 European Parliament Election – three to five times lower than France, Italy, and the UK. And they never devolved into something as disruptive as Trump or Brexit.

This kind of pattern is, in fact, not just anecdotal. It’s systematic. Reclaiming Populism quantitatively proves that low social mobility is consistently associated with worse populism – and alternative factors like income inequality, immigration, and social media are not.

...low social mobility is consistently associated with worse populism – and alternative factors like income inequality, immigration, and social media are not. Canadians concerned about the possible aftermath of the Freedom Convoy thus need to take a hard look at how fair our economy is.

Canadians concerned about the possible aftermath of the Freedom Convoy thus need to take a hard look at how fair our economy is. And for the moment, Canada does quite well in this regard. Its social mobility is nearly as high as in Scandinavia, and far above many of its other peers. This creates a firewall that protects Canada against the kinds of populist outbursts that have fundamentally altered the national characters of countries like the US, UK, Italy, and France.

It is natural that after a two-year pandemic, with associated restrictions that push against personal freedoms, there will be acute expressions of political anger. But what Canada is experiencing today is not the same as the decades-long ascent to profound economic unfairness that has driven phenomena like Trump, Brexit, and Marine Le Pen. It is unlikely that the Freedom Convoy is the future of Canadian politics because it does not rest on structurally-entrenched unfairness that durably holds back wide swathes of citizens from what they deserve.

Nevertheless, there are definite risks to Canadian social mobility going into the future. Technological, environmental, economic, political, social, and cultural change can all create big winners and losers, and thereby embed economic unfairness if improperly managed. For example, novel technological innovations or deepening globalization could undermine economic fairness in unanticipated ways. There is evidence, in fact, that social mobility is getting worse not only in the US but even in Norway – so perhaps Canada could be vulnerable too.

It is natural that after a two-year pandemic, with associated restrictions that push against personal freedoms, there will be acute expressions of political anger. But what Canada is experiencing today is not the same as the decades-long ascent to profound economic unfairness that has driven phenomena like Trump, Brexit, and Marine Le Pen.

What, then, can Canadian policymakers do to reinforce a meritocratic economy? To begin, it is important to delineate what not to do – and chief among the flawed ideas bandied about today is aggressive redistribution. Plenty of politicians on the global stage call for billionaire taxes or a universal basic income, purportedly to support a more just economy. But all the evidence is that enforced equalization cannot protect Canada, or any other country, against populism.

For one, our research statistically demonstrates there is simply no relationship between inequalities of income or wealth and populism. In fact, plenty of high-income countries with fairly low rates of income inequality have proven susceptible to populism, like France, Poland, and Hungary. 

The reason why is because, as the behavioral sciences prove, “there is no evidence that people are bothered by economic inequality itself. Rather, they are bothered by something that is often confounded with inequality: economic unfairness.” That is, people generally prefer when opportunity is equal and when those who work harder in more useful ways get a higher reward. They also can’t stand it if someone gets rich by ‘cheating’ in a way that takes away opportunities from others. But after taking this preference into account, people are not at all bothered by unequal economic outcomes.

...people generally prefer when opportunity is equal and when those who work harder in more useful ways get a higher reward. They also can’t stand it if someone gets rich by ‘cheating’ in a way that takes away opportunities from others.

You can think about how a person could get rich either by inventing a marvelous new technology that makes everyone more productive, or through corrupt financing that crashes the whole economy. These two paths can lead to the same levels of wealth, so the resultant inequality they produce would be the same. Yet the latter scenario is clearly far worse, and far likelier to induce populism, because the wealth was acquired in an unfair way.

That is the core problem with looking at income inequality. Inequalities can in fact be, and very often are, perfectly fair and tremendously beneficial. Fair inequalities reward people who make society a better place. Yet if you simply look at how unequal society is, you can’t tell these fair inequalities apart from those that are unfair.

Hence why social mobility is a far better predictor of populism that income or wealth inequality. Low social mobility focuses specifically on a vital question of economic fairness – are your chances of success limited by how wealthy your parents were?

What’s more, aggressive redistribution can actually undermine social mobility. France, for example, has some of the highest tax and social security levies of any rich country. But these arguably hinder the working class. Some barbers in Paris have to complete two hundred haircuts a month to pay their charges to the government, before they earn any take-home pay. It is unsurprising that France’s social mobility is low, not despite but because of its large government.

Protecting Canada against populism will thus not be nearly as easy as simply soaking the rich. Building social mobility and economic fairness means creating the state-sponsored public goods that citizens need to become productive and access opportunity – ranging from education to transport infrastructure to healthcare. Yet it also requires a commitment to a competitive market economy, so that citizens can use the private sector to translate opportunity to tangible success.

A very large array of different policy inputs support equal opportunity and a competitive market. That is part of the reason why so few countries enjoy high social mobility today – it requires getting so many things right. In turn, Canadians ought to think carefully on a wide variety of policy issues and whether they could hold someone back from fair success.

One important problem that could derail social mobility in Canada, and thus lead to populism, is the increasing unaffordability of the housing market. Canada is notorious for having some of the world’s most unaffordable cities, and yet most people view this as a significant inconvenience rather than an actual threat.

One important problem that could derail social mobility in Canada, and thus lead to populism, is the increasing unaffordability of the housing market...

But housing is not some nice-to-have asset, only useful for raising a family. Canada’s cities are at the heart of its economic engine, and a future in which some Canadians are priced out of living in them is very much possible. If real estate prices continue to rise beyond the growth of real income, housing could become a hereditary asset such that those born into the right families can afford to live decently in an urban center – while everyone else largely cannot.

Sadly, many illiberal populists link the legitimate complaint of low social mobility with immigration to amplify their support. For an immigration-dependent country like Canada, it doesn’t take much imagination to see how the problem of unaffordable housing could be powerfully twinned with xenophobic rhetoric.

The showdown in Ottawa should remind us that Canadians must guard against rising economic unfairness in every respect. By striving to ensure citizens feel like they can succeed through talent and hard work, Canada can help support a politically stable future.

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Eric Protzer is a Research Fellow at Harvard University’s Growth Lab. Paul Summerville is an Adjunct Professor at the University of Victoria’s Gustavson School of Business. They are the co-authors of Reclaiming Populism: How Economic Fairness Can Win Back Disenchanted Voters.

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