Economics Can’t Explain All Voter Anger

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With the exception of the most boring pedants, who celebrated the millennium on January 1, 2001 instead of the year 2000, we are approaching the quarter century of our century. What are the surprises so far? What would have been hard for people to believe 25 years ago? That Russia, which at that time was struggling to pay its pensioners, would become a revanchist war machine. That Islamist terrorism would announce itself one September morning as a force that would haunt the rest of our lives and then, largely, not do so.

Here’s another one. The United States would surpass Europe in economic growth and would not be happier for it. If people ultimately vote based on their material experience (which is common sense), the United States should have a much more stable polity than Europe, including Britain. Instead, it has about the same amount of anti-establishment populism, if not more.

How strange. Perhaps what voters are doing is comparing their economic experience with that of their own ancestors, not with that of their contemporaries in other countries. The data that matters is, then, longitudinal, not latitudinal. But this doesn’t make the argument that economics is political seem much stronger. Let’s think about Ireland or Poland. Each nation has seen its influence in non-traditional parties grow in recent decades. And each has done so despite becoming unrecognizably richer.

In the 1980s, Sinn Féin won 1 or 2 percent of the vote in the Irish general elections. In the 2000s, this figure rose to around 6. Although it failed to break through, the party won 19 percent in last month’s election. During the same period, the Irish economy flourished, from one of the poorest in Europe to one of the richest, from a place of emigration to one where people flock. How does an economic determinist explain this? What is the materialist explanation here?

Let me anticipate one: that general enrichment can mask, or even create, particular difficulties. Higher housing costs for young people, for example. But this is nothing more than a statistical selection. In all economies, at all times, there are sectoral problems to mention. For economic determinism to be serious, it has to be falsifiable. It has to take into account the fact that Ireland, despite a savage crisis in 2008, is richer than it was a couple of generations ago, and with little obvious glory to the established political order that oversaw most of that success.

Other facts must be faced. Donald Trump was elected in a context of high inflation (2024). But also in one of low inflation (2016). Populists thrive in free markets with huge income disparities (United States). But also in social democracies (France). In the Britain of 2016, dispossessed young people voted for the Remain status quo, while older asset owners opted to break with Brexit. Greece, which had a devastating economic experience in the last decade and an excuse to turn to the margins, has a prime minister who is the center of attention of international moderates. Italy, which experienced fewer structural reforms, has a populist. Not only is there no faithful correlation between economic circumstances and political choices, but there is not even a useful line of best fit.

So if it’s not just the economy, what’s bothering voters? Immigration, largely. But even this is not a decisive factor. Why hasn’t populism taken off in Australia, a country with high immigration? (There, perhaps, economics explains a lot.) The strength of the far right in France seems out of step with the size of the foreign-born population there, which is not exceptional by Western European standards.

Another explanation for what is happening is “hedonic adjustment.” As income increases, so do expectations. Voters rebel more quickly. In other words, economics is decisive, but not in the way you imagine.

Either way, American history in this century should be a punishment for those who see politics as coming after economics. Clearly, it is possible to grow at fantastic speed, build the most powerful companies on Earth from the ground up, and have Tulsi Gabbard poised for important public office. Economic determinism is reassuring because there is a textbook answer to every problem: grow out of it. Invest. This was Joe Bidenism. In fact, it’s a big part of Western liberalism. There is impeccable common sense in this, but also an intellectual heaviness. Conservatives have been quicker to sense that forces stranger than material interest are at work in the world, and to dominate them.

It’s hard to write this column without being mistaken for an outspoken growth skeptic, prone to quoting Robert Kennedy’s high school valedictory speech about all the things GDP doesn’t measure. (“The strength of our marriages.”) So, just to make it clear that I am a growth fanatic. I want 20 million Londoners, not 10 million. But the argument for growth must be that it is good in itself, that more things for more people are intrinsically worthwhile, that romanticizing the pre-industrial world is imbecilic stupidity. The argument is No that growth leads to healthier politics. If the evidence once supported that axiom, it is now more confusing.

In fact, the causal link between economic performance and political outcomes has been broken in both directions. Not only can a nation have a prosperous economy without any obvious benefit to its policy, but it can also sustain a terrible policy without incurring economic damage. This time of year, we are asked to reflect on all the things in life that money can’t buy. For “love” and “class,” add civic sanity.

janan.ganesh@ft.com