Populism: The Short Version

Populism is on the rise around the world. 

It disrupts established political systems, creates uncertainty, and deepens societal divisions. This fundamental crisis of governance and the social contract is Nate Hagens’ fourth horseman of the coming decade (Figure 1).

Climate change and the ecological crisis undoubtedly pose greater long-term threats to the planet compared to the four horsemen. However, in the immediate future, these environmental challenges are less likely to threaten human systems.

Although populism’s resurgence can be explained by worsening economic conditions for average people, its basis in psychology is equally compelling. This suggests that the horse is at least as important as the horsemen for understanding today’s human predicament.

The social contract is the implicit agreement between individuals and government. People collectively agree to surrender some of their freedoms in exchange for protection of their remaining rights and the maintenance of social order. 

Weak or failed government can lead to protests, and even violent uprisings if people lose faith in the system, and take matters into their own hands. Outcomes include financial turmoil, unemployment, inflation, and poverty. In extreme cases, failed governance may lead to mass migration, refugee crises, and environmental degradation.

The populist shift in Europe has been characterized by the electoral gains of parties such as Marine Le Pen’s National Rally in France, Matteo Salvini’s League in Italy, and the Alternative for Germany (AfD) party. These often advocate for nationalist and anti-immigration policies, as well as Euroscepticism. 

David Brooks’ recent opinion column, “My Unsettling Interview With Steve Bannon,” offers valuable insight into the essence of populism. Bannon is a political strategist, media executive, and former investment banker who played a significant role in Donald Trump’s rise to the presidency. 

He envisions a global populist movement capable of taking over the world. Bannon believes the ruling elites of the West have lost the confidence of their people, and he aims to empower the populist movement to replace them. In his view, immigration is the driving force behind the populist surge, as it contributes to declining jobs and opportunities for working people.

It would be one thing if Steve Bannon, Donald Trump and the MAGA Republicans were uniquely American phenomena but, of course, they’re not. In France, after the second round of voting for the National Assembly, Macron’s Renaissance (RE) government has collapsed. The Prime Minister has resigned, and the political landscape is dominated by Le Pen “of the far-right National Rally (RN) and Mélenchon of the far-left France Unbowed (La France Insoumise, LFI). This leaves France without a clear governing majority.

French philosopher Alain Finkelkraut has recently warned of the “Lebanonisation” of France—a society splintering into warring factions with no shared interests. He paints a picture of a nation fracturing, each group entrenched in its own grievances and ideologies, eroding any sense of collective identity. 

Many consider France ungovernable—Hagens’ fourth horseman.

Complexity scientist Peter Turchin argues that one of the critical factors of societal instability is what he calls elite overproduction. Intraelite competition, and economic inequality can lead to social disintegration. Turchin’s model seems overly simplistic but it provides a useful framework for understanding simplistic populist thinking. Get rid of the elites. Replace them with leaders who understand “the lived experience of their people,” and a much better world will result.

The Rational Narrative

A more straightforward explanation for populism is the worsening economic situation for average people. The 2023 report on the Economic Well-Being of U.S. Households revealed that 37 percent of Americans cannot cover a $400 emergency expense without borrowing money or selling something—roughly the same percentage of voters who support Donald Trump.

The same report found that inflation was the biggest economic concern, affecting over one-third of respondents. This was followed closely by worries about basic living expenses and housing. These responses underscore the ongoing struggles many face in maintaining financial stability amid rising costs and economic uncertainty.

Ray Dalio suggests that today’s surge in populism is related to the culmination of a long-term debt cycle. Over time, economies and financial systems accumulate debt. To encourage borrowing and spending, central banks lower interest rates, which can lead to even more debt and higher asset prices. Eventually, debt levels become unsustainable. Borrowers struggle to service their debts, reducing spending and investment, and slowing economic growth. This unsustainable debt often peaks in a financial crisis, as seen in the Great Depression and the 2008-2009 financial crisis.

Long-term debt cycles can aggravate income inequality. Wealthier people and corporations generally have better access to credit and can borrow at lower interest rates. They leverage this to invest in appreciating assets, further increasing their wealth. In contrast, those with lower incomes often face higher borrowing costs and may use credit for consumption rather than investment, resulting in a cycle of debt without wealth accumulation.

Figure 2 illustrates how the end of a debt cycle in the 1930s coincided with what Dalio calls an era of populists. As the next debt cycle began, conditions improved for the lower 90 percent of Americans into the 1980s and 1990s—a period that MAGA Republicans nostalgically reference in their call to “make America great again.”

Over the last three decades, the wealth of the lower 90 percent of Americans has deteriorated, while the upper 0.1 percent have flourished.

Another characteristic of debt cycles is that economic growth declines when debt levels become so high that they no longer contribute to productive capacity. Figure 3 illustrates how per-capita U.S. economic growth has decreased over the last 75 years, dropping from more than 2.5 percent of GDP in 1971 to less than 1.3 percent in 2023.

The Psychology of Populism

That’s the rational explanation for today’s populist upheavals, rooted in economic desperation and a longing for better times. But there’s also an irrational, psychological dimension that provides deeper insights into populism and broader aspects of the human predicament. This includes our distorted relationship with ourselves and the natural world, reflecting deeper existential and societal fractures.

In 1951, Eric Hoffer published The True Believer, a groundbreaking study on the psychology and dynamics of mass movements. Although he focused on Communism, Nazism, and Fascism, these were essentially populist phenomena, driven by the same currents of collective discontent and the quest for identity and purpose.

Hoffer suggested that people who join mass movements often seek to escape their own ineffectual lives. By becoming part of a larger cause, they find meaning and a sense of importance that their personal lives lack.  The leaders of these causes are skilled at articulating the grievances and aspirations of their followers, often exhibiting charisma and the ability to inspire and mobilize the masses.

Several decades before Hoffer, Carl Jung revolutionized psychology by introducing the concept of the collective unconscious. Itis a deeper layer of the psyche that is shared by all humans. It functions as the human operating system, encompassing the accumulated experiences and knowledge of our species. 

Jung believed that modern technology has increasingly disconnected large numbers of people from functional contact with the collective unconscious, causing it to atrophy. As a result, many live in a perpetual state of neurosis—a mental disorder marked by emotional distress and difficulties in managing everyday life. Neurotic symptoms include anxiety, depression, obsessive thoughts, and compulsive behaviors.

Iain McGilchrist’s ongoing neuroscience research into brain hemisphere specialization builds upon Carl Jung’s earlier work. McGilchrist’s findings indicate that the two hemispheres of the brain, while interconnected, process information differently and have distinct but complimentary functions. 

The right hemisphere is responsible for holistic thinking, context, and integrating information, enabling us to perceive the world in a connected and meaningful way. The left hemisphere focuses on analytical thinking, language, details, and sequential processes, excelling in abstraction, categorization, and systematic analysis. Table 1 summarizes some of the key functional differences between left and right hemisphere thinking and processing.

The left hemisphere drives actions and tasks with a narrow focus, often missing the broader context and failing to anticipate or notice the negative effects of its actions. It jumps to conclusions quickly and then believes its own narrative. The right hemisphere serves as the left’s “bullshit detector,” providing context and real-world experience to balance the left’s preference for action. McGilchrist uses this analogy to illustrate the dynamic between the two hemispheres.

McGilchrist argues that modern civilization has increasingly favored left-hemisphere thinking, leading to a fragmented, overly rational approach to life. The shift has come largely at the expense of community, creativity, spirituality, and a sense of connection with the natural world.

“Our intelligent capacity to make sense of the world is in decline because…the right hemisphere’s understanding is being elbowed out by the left hemisphere’s insistence that we see the world its way, even though this way is less intelligent.”

Ian McGilchrist

When the truth-testing, modulating effect of right hemisphere processing is weakened, people are more prone to blowing things out of proportion. The rise in conspiracy theories supports this idea.

“We are part of the most ridiculous era of humanity in which completely improbable and very stupid things are said by highly intelligent people. And if they had any contact at all with their intuitions, they would guide them to a much, much wiser place.”

Ian McGilchrist

David Bohm, through his work in quantum physics, arrived at similar conclusions. He believed that the most serious problem for society was the  fragmentation of consciousness. From an early age, people are taught to analyze and solve problems by breaking them down into discrete parts, rather than seeing them as interconnected wholes. While useful in many contexts, this method of thinking limits our ability to see the bigger picture.

This mindset has led to widespread pollution, ecological imbalance, overpopulation, and global economic and political chaos. As a result, it has created an environment that is detrimental to both the physical and mental well-being of most people.

It’s a Predicament, Not a Problem

Populism arises when groups feel ignored by their government and the system, believing their interests are not represented. It’s more than just a call for regime change; it is a reactionary revolt against the status quo, a denial of reality, and a need to blame political leadership. Populism often lacks a Plan B, a “then what?” It reflects a deeper psychological predicament.

Problems may have solutions; predicaments arise when multiple interrelated problems compound each other. Solving one issue may only shift the problem somewhere else or make things collectively worse. Predicaments may be manageable, but they rarely have clear solutions.

Society’s predicament is the aggregate of the problems of its individuals, suggesting that changing the tide of populism might not be possible. At the same time, understanding its nature allows for different approaches to managing it. Since reason, logic, facts, and criticism are largely ineffective, we should abandon those methods. Instead, we should address the core issues: feeling ignored, disrespected, and unrepresented.

In the broader context, populism, governance, and the social contract represent just one of the four immediate threats facing humanity in the coming decade. The four horsemen do not encompass the ongoing destruction of ecosystems, loss of biodiversity, and climate change, which jeopardize the planet’s capacity to support human life.

Human behavior is the horse on which populism and other horsemen ride. 

A fundamental shift in our understanding and interaction with the world is essential, emphasizing the need for systemic change, and a deeper awareness of balancing human needs with planetary limits. This shift is unlikely to happen without a world-changing catastrophe that forces behavioral change upon us.

Many accuse their opponents of being threats to democracy, forgetting that dismissing the will of half the populace spells the end of democracy.

In the meantime, let’s stop wasting time treating the human predicament as a mechanical problem solvable by replacing parts and adjusting settings. We should acknowledge that human behavior is the core issue. Addressing the root cause rather than just the symptoms would be a significant step in the right direction.