Governments must regain voters’ trust with new economic policies

Daily reports on election campaigns (who is ahead and who is in the polls, what a given candidate said today) obscure an important topic: voters are very distrustful of the government. The Berlin-based New Economy Forum has addressed precisely how to attack this critical issue, stating that “to prevent serious harm to humanity and the planet, we must urgently get to the root causes of people’s reluctance” – both democracy and economic welfare – the being will suffer.

The Forum’s grand overall mission is “to seek new solutions and a new overarching paradigm for the major challenges of climate change, inequality and globalization, and to redefine the role of the state.” An ambitious agenda, but one that correctly recognizes these interconnected issues and requires significant policy changes that help people rather than getting stuck in old and outdated frameworks.

People feel a striking depth of negativity. A February YouGov survey of American adults, which asked respondents to rank the “best” and “worst” decades since the 1930s along various dimensions, found that more people think the economy is worse now (32%) than during the Great Depression (23). %).

And negativity runs, often inaccurately, across issues. Survey respondents said the 2020s were the worst decade for crime (false), happy families, morality, number of scientific breakthroughs (definitely wrong), and work-life balance. They even said that the 2020s were the worst for fashion, movies and popular music (what happened to all those Taylor Swift fans?)

Some of this negativity may be related to what scientists call “recency bias,” the fact that we remember and are influenced by more recent events. However, these negative views about the current decade are still striking – even if there is a “recent” bias, people do not argue that these are good times.

European polls, although not as broad, also show a high degree of negative attitudes about the economy and whether individual countries are on the right track. Polls in both America and Europe show a wide discrepancy between people’s positive evaluations of their lives and their negative views of their country’s trajectory.

These trends worry the thinkers of the New Economy Forum (as they should worry us all). Like other analysts, they see the “exaggerated faith in the efficiency of markets” over the past three decades as blinding policymakers to the growing problems of climate change, inequality and political alienation.

These problems are particularly pressing in 2024, when “more than 50 countries, accounting for half of the planet’s population, will hold national elections” as well as elections to the European Parliament, during which observers expect that the “far right” will “make that significant profits.” Earlier this year, Jill Lawless of the Associated Press said the upcoming votes “will test even the strongest democracies” and could “strengthen the hands of leaders with authoritarian tendencies.”

That’s why the Forum recently brought together some of the world’s leading experts in economics and politics to analyze our interconnected problems and recommend a productive course for the future. Their “Berlin summit” focused on rising political populism, whether Biden’s economic policies can help regain the trust of alienated voters, and how industrial and climate policies can deliver shared economic benefits and increased trust and political cohesion.

The summit declaration “Reclaiming the People” was signed by over 50 distinguished experts with extensive analytical knowledge and political experience, including Mariana Mazzucato, Dani Rodrik, Adam Tooze, Laura Tyson, Thomas Piketty and Olivier Blanchard. The Forum was assisted by experts from the Institute for New Economic Thought (INET), which aims to reduce market fundamentalism in mainstream economics while engaging in research and policy analysis to support greater shared prosperity. (I am a signatory of the Forum declaration and previously worked at INET.)

You should read the declaration and watch a video of it on the Internet. The analysis shows that there is a “widely shared experience of real or perceived loss of control over livelihoods and the trajectory of social change” in many countries. This perceived loss of control is leading to “a world of dangerous populist politics that exploits anger without considering the real risks.”

We see this angry populist politics in many countries. Donald Trump makes furious claims about immigration and claims that if elected, he will immediately deport millions of immigrants, using the National Guard and avoiding due process of law. In Germany, the radical right-wing Alternative for Germany is in second place in election polls, behind only the Christian Democrats. And in India, the world’s largest country, authoritarian Prime Minister Narendra Modi is increasing anti-Muslim rhetoric as national elections approach.

In the face of such powerful negative forces, the Forum wisely states that “we do not pretend to have definitive answers.” However, they present a positive, multi-faceted agenda that leverages industrial policy, implements new climate action, and downplays overreliance on markets as the default solution.

Most importantly, the Forum’s declaration calls on us to take action against “populists who pretend to have simple answers.” Noting the combined threats of climate change, rising inequality and growing distrust of governments by its own citizens, the Forum says there is “no time to waste”. They are right.