The populist temptation: economic grievance and political reaction in the modern era

The recent surge of populism is a relatively new occurrence in advanced economies. The question is whether this surge is directly correlated to wider income (and wealth) inequality, or if it is related to the austerity measures introduced as a result of the global financial crisis. Or, perhaps, is it in fact just a matter of identity and nativism? In The populist temptation, Barry Eichengreen argues that adverse economic conditions leverage grievances, foster intolerance and undermine the social fabric, resulting in a breeding ground for populism. Xenophobia and intolerance thrive in environments where people feel that their standard of living and economic security are under threat—and so they take this threat to apply to their identity. Inadequate responses from mainstream politics, coupled with weak institutions, open the door to anti-establishment movements that offer easy solutions to complex issues. The difficulties experienced by the UK government in negotiating an outcome that respects their voters' preference for leaving the European Union without undermining Britain's long-term growth or creating a short-term shock serves as a reminder of populism's intellectual and political shortfalls. It also reflects populism's dangerously manipulative influence on public opinion.