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The Divergence of US and British Populism

LONDON – Britain, France, the United States – which is the odd one out politically? The answer seems obvious. Last year’s Brexit referendum in the United Kingdom and the election of Donald Trump in the United States were the twin symbols of populist revolt against global elites. In Emmanuel Macron, France, by contrast, has just elected as its president the quintessential “Davos Man” – a proudly globalist technocrat identified with his country’s most elitist financial, administrative, and educational institutions.

But step back for a moment from these political clichés, as I did earlier this month when I fled the British election campaign to attend the Milken Institute Global Conference in Los Angeles. The Milken conference is the US equivalent of Davos, but with a more serious business focus and the strong US government representation that Davos has never achieved.

Listening there to Trump’s key economic officials – Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross – plus a galaxy of Congressional officials and business leaders, made clear that Trump’s election is only a temporary aberration. The US has taken a detour into a theme park of nationalist nostalgia, but it remains focused on the future and the benefits of globalization, not the costs.

It was clear from the Milken conference that Trump will not deliver most of his domestic agenda. The Rust Belt will not enjoy a surge of infrastructure spending. US relations with Mexico or China will not change much. Trump’s main tax proposals will not get through Congress. And Trump’s promise to “repeal and replace” Obamacare immediately after taking office is almost certain to give way, under public pressure, to “reform and repair.”

After this immersion in US pragmatism, my return to British politics was deeply depressing. Political paths that seemed parallel just a few months ago are now diverging. While the US has taken only 100 days to see through Trump’s “alternative reality” (though perhaps not through Trump himself), almost nobody in Britain is even questioning the alternative reality of Brexit, despite the unexpected opportunity afforded by the June 8 election to avoid a self-destructive rupture from Europe.

How might we explain the starkly different responses in American and British civil society to the dangerous flirtation with nationalist populism? In America, the immediate response to policies that were logically incoherent, economically dishonest, and diplomatically impossible to implement was an upsurge of opposition and debate. The Democrats showed unprecedented unity in Congress, television comedians provided even more effective opposition, millions of progressive voters took to the streets, media outlets launched relentless investigations, and the American Civil Liberties Union received $24 million within 24 hoursof the administration’s attempt to bar Muslims from entering the country.

Most important, US businesses started lobbying immediately to block any Trump policies that threatened their economic interests. As a top Senate staffer told the Milken conference, Walmart and other retailers “were extremely effective at educating our members” about the political costs of any new taxes on US imports. This removed Trump’s main protectionist threat and killed his hopes of financing big tax cuts with revenues from a “border adjustment” tax.

Now compare all this US opposition to the passivity in Britain after last year’s referendum. Leaving the EU represents a much greater political and economic upheaval than anything proposed by the Trump administration, yet Brexit has become an immovable dogma, immune to challenge or questioning of any kind. In contrast to the aggressive business lobbying against Trump’s election promises, no major British companies have tried to protect their interests by campaigning to reverse the Brexit decision. None has even publicly pointed out that the referendum gave Prime Minister Theresa May no mandate to rule out membership of the European single market and customs union after Britain leaves the EU.

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Worse still, the taboo against questioning Brexit has not been justified by appeals to reason, economics, or national interest. Instead the “will of the people” has been invoked. This chilling phrase, along with its even more sinister counterpart, “enemies of the people,” has become a rhetorical staple in the US as well as Britain. But there is a crucial difference: In the US, such proto-fascist language is heard on the extremist fringes; in Britain, even mainstream media and parliamentary debates routinely refer to opponents of Brexit as anti-democratic schemers and unpatriotic saboteurs.

Cultural factors may partly explain the contrast between US activism in response to Trump and British passivity in the face of Brexit. Americans confronting a challenge are expected to do something, even if the odds are against them. But Britons admire a hero who can face adversity by doing nothing, while “keeping a stiff upper lip.”

Perhaps more important, there was never any doubt about the democratic legitimacy of opposition in the US, where a clear majority of Americans voted against Trump. In fact, Trump lost the popular vote by 2% – the same margin by which Jimmy Carter and George W. Bush won in 1976 and 2004, respectively.

In Britain, by contrast, Brexit won a small but decisive majority of 52% to 48%. While many mature democracies would require some kind of super-majority to confirm an enormous constitutional change like Brexit, the UK has never seen the need for such checks and balances. In Britain’s unwritten constitution, there is only one limitation on the power of a prime minister with a parliamentary majority – the right of voters to change their minds. But what happens if anyone who tries to persuade voters to change their minds is delegitimized as a denier of democracy and an “enemy of the people”?

If encouraging voters to think again about the biggest political decision of their lifetimes continues to be treated as an affront to democracy, the UK will lose its only safeguard against permanent self-harm. And Britain will take a wrong turn onto the bumpy path of nostalgic nationalism, while the US rejoins Europe on the modern highway of multicultural globalization. Anatole Kaletsky is Chief Economist and Co-Chairman of GavekalDragonomics and the author of Capitalism 4.0, The Birth of a New Economy.

By Anatole Kaletsky

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