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The Politics of Resentment and Debt

Populism—the politics of resentment—is generally regarded as a right-wing phenomenon. Populists supposedly appeal to the lowest prejudices of the unintelligently disgruntled, such as unskilled workers who believe that the immigration of large numbers of people from poorer countries than theirs suppresses their wages or destroys their jobs altogether. Other beliefs ascribed to these workers are an aversion to how immigrants look, speak, smell and behave, and disgust at the food the immigrants eat. This, of course, contrasts very unfavorably with the attitudes of properly enlightened people.

But the negative connotations of the word “populism” ought to be associated with left-wing demagogues as well, though they rarely are. For example, in France, the leader of the Left opposition to President Macron, Jean-Luc Mélenchon, recently spoke to a crowd demonstrating against Macron’s proposed changes to France’s labor laws, and recited the fact (if it was indeed a fact) that France had more millionaires than any other country in Europe.

In the context, this was clearly an appeal to envy and hatred—the kind of envy and hatred that has provoked at least as much mass murder as racial hatred. (The two have often been closely associated, for what anti-Semite ever fails to draw attention to the economic success of Jews?)

The word “millionaire” as M. Mélanchon uttered it was supposed to conjure up within his hearers, by a kind of Pavlovian reflex, an exploitative, parasitic, fat, lazy, cynical, privileged, dishonest, heartless and undeservedly lucky person, possibly still wearing a black tail coat and silk top hat, with a cigar stuck firmly between his fat and sybaritic (or very thin and cruel) lips.

No doubt there are many unpleasant millionaires. (By some definitions, of course, M. Mélenchon is one himself.) There are unpleasant people in all human groups, however classified. Some millionaires will have made their money in a disreputable or extremely ruthless way, or by appeal to the low tastes of part of the general population; many others will have performed valuable services for mankind and have used much of their fortune for philanthropic purposes.

So Mélanchon’s rhetoric was every bit as crude as that of the populists who are deemed to be right-wing (though their economics are usually collectivist). Even so, his name will not come to the forefront of the minds of those who decry populism.

Across the Channel, things are even worse. The opposition Labor Party constantly appeals to those who want something for nothing, and want to believe six impossible things before breakfast. The latest scheme of the party, recently announced, is to cap the interest charged on credit-card debt.

It is true that in Britain interest on credit-card debt is eye-wateringly high, considering the rate of inflation and compared with other kinds of borrowing. No doubt part of the reason is that many cardholders now have so little sense of personal honor in paying their contracted debts that those who extend credit must seek compensation elsewhere. There has in my lifetime been a 180-degree change in popular attitudes to indebtedness. Credit, moreover, is often extended by banks and others to people who are not creditworthy and whose desire to spend is greater than their ability to earn.

One could not accuse lenders of hiding the conditions of their loans. In contrast to many contracts, the ones signed by credit-card customers state the conditions quite clearly, in particular with regard to the rates of interest that lenders are charging. They have at least the courage of their interest rates.

All the same, two arguments might be used to exculpate those who find themselves in what the Labor politicians call the debt trap. The first and better is that the people in the debt trap have so little money that they must resort to credit in order to keep body and soul together. The second and worse is that people are so ill-educated in modern Britain that they do not realize that compound interest at, say, 20 per cent a year soon exacerbates a debt.

No one could deny that being at the lower end of the economic spectrum in a modern society is discomfiting and even humiliating, especially if it is a permanent condition (which often it is not). But personal incompetence in managing finances, and a distorted sense of priorities and entitlements, combined with an intuition that, in the last resort, debts can be contracted with impunity—an intuition which the proposal to cap debt can only reinforce—must in modern circumstances explain much of the high rate of indebtedness. There is not much popularity to be gained, and few votes to be won, by pointing this out, though. Better to point the finger at the evil usurers.

As to the notion that people are too ill-educated to understand the natural consequences of high rates of compound interest, this does little honor to a state education system that spends at least $100,000 on each pupil during his compulsory schooling. The same goes for our representative democracy in general, for if people cannot understand that high rates of compound interest rapidly increase the amount owed, surely it is absurd for them to have a say in deciding who should govern them?

If there is any lack of understanding, I believe that it is an induced, or artificial, one in a situation where there is little motive to understand and every motive to misunderstand. Such people as indebt themselves on credit cards apply their intelligence (which is not lacking) in other ways and to other matters. Indeed, to indebt yourself when you know that, ultimately, you face no very severe consequence for doing so, other than intermittent anxiety, could be interpreted itself as a form of intelligence or rational calculation.

Everyone would like to have his debts cancelled at a stroke, and it is not in human nature to love one’s creditors. The proposal to cap credit-card debt is therefore likely to appeal to those who will profit by it, though it can lead only to further degeneration of their own character. What it will not do is attract any derogatory epithet such as “populist.” For some reason, left-wing hatred of usurers is never that.

Reader Discussion

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on October 16, 2017 at 09:44:26 am

Couldn't you find anyone less-qualified to comment? Was Chance the Gardener unavailable?

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Trevor Chase
on October 16, 2017 at 10:09:27 am

Well, Chauncey Gardiner was unavailable as he currently heads up the Labor Party!!!!!

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gabe
on October 16, 2017 at 10:13:37 am

In the meantime "Back in the USA", our *populist* bureaucrats are once again engaged in an effort to "make home ownership affordable". How one may ask? Simply by compelling credit/ mortgage agencies to offer home loans to those who would appear to fit the profile outlined by Dalrymple; implemented, of course, by Obama holdovers at CFPB (Richard Cordray) and JWatt.

Here we go again, boyos!

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gabe
on October 16, 2017 at 11:21:11 am

The roots of this problem can be traced to the West's reconciliation with the Soviet Union long ago. When the 1917 Revolution first happened, the US, Great Britain and others deemed it unacceptably evil, and of course they invaded. But by the mid-1920s (long after the Bolsheviks had executed Russia's royals), Britain had conferred diplomatic recognition on the USSR, thus normalizing relations. Ten years later, after the USSR had hosted one of the worst famines of the 20th century, a product of state socialist malevolence, America followed suit. Thus began a period of interaction between the West and the state socialist tyranny of the Soviet Union that, despite formal ideological differences, would be punctuated by both military alliance and detente.

The effect on both political and economic culture in the West of such normalization cannot be overstated. Soviet laws and social mores permeated the West in ways that were not always surreptitious or insidious, and in fact the apologists of Soviet-style state socialism in the West became legion. Today, cultural Marxism in academe is the norm. Teachers are not furtive or shy about their Marxism; they openly proclaim and disseminate it as an ideal in both politics and economics. As such, with the rise of state socialism in the West in the form of unreconstructed Marxists like Corbyn and McDonnell, the chickens are coming home to roost.

If we didn't want socialist tyranny in our countries and societies, we shouldn't have legitimized it decades ago. Dalrymple is trying to carry the torch of "decency" and the "free market" in an age when that ship long ago sailed. It's almost quaint the way he does it. The best we can hope for now is that a kind of "decent social democracy" will win out over those nostalgic for the totalitarian socialist tyranny of the past (e.g. Corbyn and McDonnell). As long as there remains some modicum of genuine democracy, perhaps there is hope.

The extreme "capitalist" vision is something along the lines of the dystopic world depicted in films such as Blade Runner, where corporations have dehumanized the planet and the quality of life is so low for everyone except those excelling in corrupt cronyism that there's little point in carrying on with the human enterprise at all. I'd rather plod toward pokey democratic socialism than have that.

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Bitterman
on October 16, 2017 at 16:22:51 pm

Bear with me for a brief anecdote (adaptable if not pertinent):

Back, a little over 65 years ago, when the I.R.C. of !953 was being created, Stanley Surrey gave a small group of us at U.Va. Law the following anecdote:

In the meetings with the members of the Joint Committee (Congressmen) a team of staff people, pushing for a certain wording of a provision or revision would refer to the pertinent wordings by sections, parts, subparts of subsection of particular wording. It could be impossible to follow accurately without extensive back and cross references. To counter that tactic, Surrey and his teams made all their references to the less commonly used (or known) statute designations; which might be something like Statute 52-107; or 38-93. That would send the other teams scurrying to find the wording so identifies.

That tactic finally got all concerned to discuss items by what they were discussing and not by labels, numeric or codified.

So that seems, as the opening and close of this essay indicate.

"Populism—the politics of resentment . . ."

Of course such politics can be so labeled. But it is far clearer to describe (or define where possible) what is being discussed (resentments and their "causes") than to slap on a label , whether it be Populism. Nationalism, Jingoism [ah ha], or Democratic, or whatever.

If we were to look at the efforts to find or coalesce those commonalities which constitute the demotic of a society we might find that the most apparent or "successful" center around dissatisfactions, rather than objectives. So, we more often encounter the "Populism" label as identifying efforts to coalesce dissatisfactions -rather than as identifying efforts to finds means for coalescence of objectives; despite the demotic nature of both.

In For a, such as this, we might be well served to identify, rather than label(even numerically or by code) what we a intend by our discussion.

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R Richard Schweitzer
on October 16, 2017 at 17:56:04 pm

As to the notion that people are too ill-educated to understand the natural consequences of high rates of compound interest, this does little honor to a state education system that spends at least $100,000 on each pupil during his compulsory schooling. The same goes for our representative democracy in general, for if people cannot understand that high rates of compound interest rapidly increase the amount owed, surely it is absurd for them to have a say in deciding who should govern them?

If there is any lack of understanding, I believe that it is an induced, or artificial, one in a situation where there is little motive to understand and every motive to misunderstand.

As Upton Sinclair commented, "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"

That said, I wonder about the state of “financial literacy.” Sure, there are plenty of tests demonstrating that people lack a basic understanding of finances. But I suspect this was always true. That is, I suspect that how people manage finances has mostly been a matter of culture, not reasoning.

Should I go to college? Well, if you come from a social class that goes to college, you don’t sit down and do a pen-and-paper calculation; you simply apply. And if you come from a social class that aspires to be like the class that goes to college, you do the same thing. After all, you’ve always heard about the wonders of higher education. Thus we have legions of working-class people going to Trump University, etc. If you’re the first person in your family to go to college, how are you supposed to know that you’re being shafted? If it has a letter head that looks like a college, then it’s a college to you.

Should I get married? If I come from a social class in which people get married, then I probably will. Otherwise, it’s more iffy. Should I have kids? Likewise. Should I get a job? Likewise.

How much should I spend on a house? A car? Etc? People look to their parents, or to the lifestyles they see on TV, and emulate that. Alas, they don’t necessarily appreciate that their parents earned lots of money during an era with more stable employment for working-class people—union protections, pensions, etc. So what seemed like reasonable expenditures for their parents are no longer reasonable expenditures for the kids.

Again, people may not regard themselves as being extravagant. They regard themselves as conforming to social norms. It’s just that the economy in which they now live no longer supports those norms.

Or consider the Saving & Loan scandals/MCI/Enron/the housing collapse/the Wells Fargo banking scandal/The Wolf of Wall Street: The US housing market is based on a huge number of actors engaging in traditional behavior—apprising properties, assessing borrowers’ credit-worthiness, holding debts. And stock brokers were trained to engage in a modicum of substantive analysis, and to trade on their firm’s reputation. But more recent participants have learned that they can achieve greater gains by cutting corners and quickly shifting the resulting risks to the next person in line. Etc. Etc.

Yes, in theory, every actor should be reading every document’s fine print and calculating every result of every contingency. But in practice, we know people don’t do that. Rather, people act on the basis of trust. And con men have learned to exploit that trust.

In sum: We are naïve to imagine that we navigate the world on the basis of our wits. Rather, we navigate it on the basis of received wisdom in the form of culture. We use our wits to make relatively small deviations from the social patterns that our culture tells us to follow, and congratulate ourselves on our cleverness when our deviations turn out well. But just as we all see the same optical illusions, we are also prone to the same confidence traps. When such a huge percentage of people get trapped, this stops looking like a lot of individual problems and more like a human nature problem.

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nobody.really
on October 17, 2017 at 00:23:19 am

Populism—the politics of resentment—is generally regarded as a right-wing phenomenon. Populists supposedly appeal to the lowest prejudices of the unintelligently disgruntled, such as unskilled workers who believe that the immigration of large numbers of people from poorer countries than theirs suppresses their wages or destroys their jobs….

But the negative connotations of the word “populism” ought to be associated with left-wing demagogues as well….

“Upswingers believe in progress and feel that society is still fitfully moving upward. Downswingers have lost faith in progress and feel everything is broken.

Both right and left are dividing into upswinger and downswinger camps. Among Republicans the upswingers embrace capitalist dynamism, global engagement and the open movement of people and ideas. The downswingers embrace ethnic and national cohesion and closed borders.

On the left it’s between those who believe the only realistic path is to reform existing structures and those who think they are so broken we need to start over.

The downswinger mind-set is similar across left and right. Because of the loss of faith in progress downswingers have a baseline mood of pessimism, protest and anger. They are marked by a deep social distrust and a bent toward conspiracy thinking. They disrespect codes of etiquette that traditionally regulate public life….

Politics gets nasty … because downswingers have a tropism toward ethnic and identity politics. If you’ve lost faith in universal progress, if you think everything is a zero-sum scramble for slices of a stagnant or shrinking pie, then of course you are going to see your ethnic identity marker as essential and all defining. You are going to embrace a sense of victimhood and feel that the great parade of historic wrongs is going to determine what comes next. History controls the future.

Politics also gets nasty in these periods because personal grievance gets intermingled with social grievance. If you feel aggrieved about your own personal status in society then political life is not just a disagreement about means, it’s perceived as a status war against those who seem to think they are better than you. Downswinging populists are taking over the Republican Party. Regular Republicans like Ed Gillespie in Virginia have to adopt the tone and poses of the downswingers to try to win votes.

The Democrats are a bit behind. But the center-left parties have collapsed all over Europe. There’s no reason to think that won’t happen in the U.S.

In 1994, 65 percent of Democrats believed “most people who want to get ahead can make it if they’re willing to work hard.” Now only 49 percent of Democrats believe that. That’s a 16 point shift from an optimistic, progress-embracing view toward a pessimistic, system-doubting view.”

David Brooks

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nobody.really
on October 17, 2017 at 12:28:37 pm

"Politics gets nasty … because downswingers have a tropism toward ethnic and identity politics"

AND

"Downswinging populists are taking over the Republican Party"

Oh, really?

This, of course, would be to deny that it is the Democrat Party that has a tropism toward identity politics - indeed, it may be said that there need to garner votes has made this an obsession for them.

What world are you living in? and what world are to attempting to foist on us?

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gabe
on October 18, 2017 at 11:19:20 am

Of course, Brooks is speaking to and for his audience, the parasitic rentier class. Populism is ever and always the reaction to uncontrolled economic parasitism. That was true in England in the 1640s, in the US in 1776, in France in 1789 and in Russia in 1917.

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EK
on October 18, 2017 at 12:36:08 pm

Populism is ever and always the reaction to uncontrolled economic parasitism.

Thoughtful!

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nobody.really
on October 18, 2017 at 16:04:35 pm

Agreed - but would you consider that the current "populism" may in part be a reaction to non-economic factors and that certain cultural excesses also have played a part in the rise of the "populists."

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gabe
on October 19, 2017 at 09:41:17 am

The recent Maoist cultural excesses are certainly sharpening the debate and hardening people's resolve on all sides of the issues but they are quite recent. Economic parasitism became flagrant in the US in 1970s with emergence of vulture capitalism. First, they sold-off the factories and machine shops then they off-shored production and finally started importing replacement labor. The globalist and racist rhetoric of the Progressives are all aimed at justifying the plundering of our collective wealth that began with Nixon's trip to China.

As Jefferson said, the people are slow to act and ". . . are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the Forms to which they are accustomed."

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EK
on October 23, 2017 at 19:03:53 pm

One does not need to be a rocket scientist to understand that when one spends more money than he has, and keeps on doing that, he will, eventually, fail. So, maybe it is our congresses that do not understand finance .

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Marilyn

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