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How the populist moment can become the liberty moment

Since the War of Independence, the American self-image has set individual liberty against oligarchic power. Abraham Lincoln encapsulated this when he described the American experiment as a government “of the people, by the people, for the people.” Perhaps it was inevitable that populism, in the form of the People’s Party, was born on U.S. soil – and that, as it experiences a modern-day resurgence, it begins in the United States.

The original Populists described themselves as “the plain people” fighting dark, malevolent forces seeking to “own the people.” However, their target was not the unaccountable power of absolute monarchy, but corporations. And their solution was not constitutionally limited government. Instead, their platform stated “that the power of government – in other words, of the people – should be expanded … as rapidly and as far as the good sense of an intelligent people and the teachings of experience shall justify, to the end that oppression, injustice, and poverty shall eventually cease in the land.” To that end they demanded a graduated income tax, nationalization of disfavored industries like banks, increased federal regulation of others, and an inflationary monetary system to water down their debts.

The platform was written in part by Ignatius Donnelly, who wrote extensive (to his mind) nonfiction about the history of Atlantis. Some 125 years later, while everyone has discarded Donnelly’s geographical musings, politicians continue to repeat his equally discredited economic and political prescriptions. The popularity of Bernie Sanders and the Democratic Party’s sentimental leader, Elizabeth Warren, shows the extent to which the party is captivated by left-wing populism.

Warren pledged allegiance to populism before the Campaign for America’s Future in 2014. “I’m told you’ve spent much of the day talking about populism – about the power of the people to make change in this country,” she told conference attendees. “This is something I believe in deeply.”

As an example of a grassroots policy, she touted her role in creating the Consumer Financial Protection Bureau (CFPB). Her choice was unintentionally revelatory.

The CFPB, which has vast powers over wide swaths of the U.S. economy, is one of the least responsive agencies of the federal government. Its director serves for a five-year term – deliberately longer than the president's four-year tenure – and can only be fired for cause. Since the CFPB receives its budget directly from the Federal Reserve, Congress holds no leverage over it. The CFPB has been accused of violating regulatory norms in order to punish the Left's political enemies. This unaccountable bureaucracy is a perfect exhibit of the “populist” Left’s policies: imperious, centralized, undemocratic cronyism.

The CFPB reveals a central fact of populism: Policies enacted to establish control by the government – in the name of “the people,” as Donnelly insisted – end up removing real decision-making ever-further out of reach of the average citizen. One individual may exert definitive influence at a school board meeting, slightly less sway with a state legislator, and virtually none over the president. But a CFPB that cannot be influenced by two of the three branches of government could hardly be less democratic. Perhaps it is no coincidence that Warren exhorts her fellow Democrats to focus on regulation instead of taxation in her recent book, This Fight is Our Fight.

As policy ascends the rungs of government, it becomes more swayed by the very corporate titans it was intended to rein in. Thus, the industry codes drawn up during the first widespread attempt at national regulation, the New Deal, were written by the largest – and most politically connected – corporations, and ruthlessly enforced to put their competitors out of business. “The teachings of experience” tell us these policies disenfranchise the consumer, who had been able to vote with his dollars, and empower politicians influenced by political contributions. Today’s populist Left promotes centralization and then wonders aloud about “regulatory capture.”

The regulatory state inevitably falls victim to what James Burnham called “the managerial revolution.” Populism is its mythos. A technocracy, Burnham wrote, cannot be “openly expressed [as a] function of keeping the ruling class in power over the rest of society. The ideology must ostensibly speak in the name of 'humanity,' 'the people,' the race,' 'the future,' 'God,' 'destiny,' and so on.”

Without favors, there is no favoritism.

Further, government patronage inevitably breeds contempt for its recipients among the ruling elites allegedly representing their interests. Senator Huey “Kingfish” Long of Louisiana, who likely would have run for president had he not been assassinated in 1935, used state largesse to corral independent-minded state legislators. After a meeting in which one lawmaker accepted graft in exchange voting against his constituents’ views, Long rebuffed his handshake. “I paid for you,” Long told the elected official. “I don’t have to shake your hand.” Multiply the amount of government largesse by a correlative level of contempt, and the result is Venezuela, where countless elections have been stolen and the government shoots citizens down in the streets, in the name of the people.

In the U.S. context, in time government regulations devolve into naked favoritism. Preferred labor unions and influential industries get guaranteed government loans or bailouts. This, in turn, sparks another populist revolt, demanding a new round of government regulations, starting the cycle afresh.

The good news is that the populist moment has the potential to become the liberty moment. The concerns that drive the populist impulse are legitimate – and give conservatives a chance to offer real solutions.

In her speech, Warren complained that “big banks … got bailed out” under the Bush administration. Conservatives also oppose bank bailouts, albeit from altogether different premises. We believe the government should not be in the business of bailing out failing businesses, that federal handouts encourage cronyism, and that the surest way to break the power of the regnant corporate-government-academic nexus is to strip the bureaucracy of its excess money and power.

Warren blasted “tax loopholes and subsidies that go to rich and profitable corporations.” We oppose subsidies of any kind, because we do not believe the government should be picking winners and losers. Generally, we support a lower, flatter, more uniform system of taxation free of carve-outs for special interests. Without favors, there is no favoritism.

The same issues impelling U.S. voters toward the populist Left are at work across the transatlantic sphere. Populism has displaced “liberalism” as the third most popular political ideology in free Europe, according to the 2017 “Authoritarian Populism Index,” a project of the Swedish think tank Timbro and the European Policy Information Center. The study used six markers to identify populists, including having “the self-image that they are in conflict with a corrupt and crony elite,” they are “highly critical of the EU,” and they make “promises of dramatic change.”

European conservatives battle an insular elite, largely based in Brussels. EU Structural and Cohesion Funds “have become the largest source of corruption in Central and Eastern Europe,” according to Slovakian MEP Richard Sulik. And while conservative principles demand prudent execution, a truly conservative government would be dramatically smaller (and less costly) than the lumbering behemoths stretching from Lisbon to Helsinki.

Conservatism is prepared to offer a compelling counter-narrative and proven solutions to these problems. Left-wing populism merely deepens them in its self-perpetuating cycle of centralization.

Like Atlantis, the economic planks of populism should be reclassified as mythology.

This article originally appeared in the November 2017 issue of Daniel Hannan’s magazine, The Conservative, and is reprinted with permission.

(Photo credit: David Shankbone. This photo has been cropped. CC BY 3.0.) 


Rev. Ben Johnson is a senior editor at the Acton Institute. His work focuses on the principles necessary to create a free and virtuous society in the transatlantic sphere (the U.S., Canada, and Europe). He earned his Bachelor of Arts in History summa cum laude from Ohio University and was inducted into Phi Beta Kappa.