Winner of the New Statesman SPERI Prize in Political Economy 2016

Monday 12 August 2013

The Centre Cannot Hold?

Everyone knows about the return of extremist politics as a result of austerity in Greece. (Paul Mason’s reporting has been particularly strong over the last few years.) The link between economic depression and far right extremism in the 1930s is also well documented. Yet I suspect there is a tendency to assume that this kind of thing only happens in ‘immature’ democracies.  This assumption is wrong, as both the Netherlands and the UK currently show.

The Netherlands has been run by a parliament since at least 1848. Coalitions are the norm rather than the exception, and there is a general desire to achieve consensus on important political issues. Before the formation of the Euro, the extreme right in the Netherlands could be described (pdf) as marginal, which was not the case in France for example. Yet recent opinion polls suggest that if elections were held now, the far right Freedom Party would become the largest party in parliament. The left wing Socialists have also been taking support away from the centre-left Labour Party. What the two extreme parties have in common compared to the mainstream is opposition to further fiscal austerity.

So far, there has been a depressing consensus among the more centrist political parties in the Netherlands that they need to follow the Eurozone’s fiscal rules.  The economy is in recession: GDP fell by 1% in 2012, and will probably fall by a similar amount this year.  Unemployment is rising: the Chart below shows OECD forecasts and also OECD estimates of the output gap. Of course this has increased the budget deficit, and so we have had a series of austerity measures in an attempt to keep the deficit at 3% of GDP to stay within the Eurozone’s fiscal rules. [1] When the Freedom Party, which was part of a right wing coalition, refused to support these cuts in 2012, they were passed by a coalition of the centre, egged on by the European Commission.

OECD Economic Outlook Estimates for the Netherlands

Of course the Netherlands, unlike Greece or Ireland or Portugal, has no problem funding its budget deficits, so here austerity is very much a political choice. Recent polls suggest the public has had enough, and that as a result support for the Euro itself is suffering. The union movement has been active in its opposition, but more recently prominent business organisations have also begun to question austerity, although predictably their opposition has focused on tax increases rather than cuts to welfare.  Coen Teulings, who departed as head of the highly respected CPB in April, was vocal in his opposition to recent cuts, but the central bank has been much more supportive of austerity.

The UK has also seen the emergence of a politically successful far-right party: UKIP. This is also unusual from a historical perspective: since Oswald Mosley the UK has a proud tradition of resisting parties of the far right. UKIP’s popularity is not normally linked directly to austerity, but instead to widespread hostility to both immigration and the European Union. As a result, the Conservative Party has taken economically damaging positions on both issues in an attempt to reduce UKIP’s appeal. Chris Bertram at Crooked Timber recounts in detail the sorry state of the UK ‘debate’ on immigration. Yet the link between concerns about immigration on the one hand and unemployment and low wages on the other is fairly obvious. Despite all the valiant attempts by Jonathan Portes and others to focus on the evidence, this is one of those cases where the combination of tabloid media hype, partisan political advantage and ‘common sense’ normally wins, and as a result the UK Labour Party seems to spend much of its time trying to ape the Conservatives.

Why has support for the far-right grown in the UK and the Netherlands, while in France for example the far-right did not make a breakthrough in 2012? No doubt a complete answer would be quite complex. However it is worth noting that the UK and the Netherlands have both experienced sharp falls in real wages in the recent past. The OECD expects real compensation per employee to have declined by a total of about 4.5% in the three years 2011-13 in the Netherlands, and by about 5% in the UK. The decline in the Euro area as a whole has been much smaller, at less than 2%. In France real wages have increased a little in all three years. Figures recently calculated by the House of Commons library show a similar picture, with only Greece and Portugal doing as badly as the UK and Netherlands since mid-2010. [2]

In both the UK and the Netherlands we have recession and fiscal austerity, where the recession has been associated with marked falls in real wages as well as increases in unemployment. In both cases I would argue that there has been no effective opposition to fiscal austerity from the political centre, which helps encourage support for the political extremes. But that is probably as far as the similarity goes, because the position of the centre-left Labour Party in the two countries is very different.

In the UK the Labour Party is in opposition. It seems their general tactic on issues like austerity or immigration is not to question the underlying assumptions on which government policy is based. Perhaps the idea is to avoid being branded as irresponsible (austerity) or out of touch (immigration), while hoping to retain the support of those who do strongly oppose government policy. This position has so far been tenable partly because there is no strong party to the left of Labour. We may have to wait until 2015 to see if this strategy is successful.

The position of the Labour Party in the Netherlands is more immediately problematic. It is now part of the coalition enacting cuts.  The Socialist Party, which is to the left of Labour and which does not support austerity, has moved ahead of Labour in the polls. In April there was a ‘social accord’, where the unions and business groups signed up to the budget deal proposed by the government. Further cuts are now required beyond those agreed in April to meet the fiscal rules, and the unions (and perhaps business leaders) are now actively campaigning against austerity.  Yet it will be hard for the centre-right to ask Brussels for a reprieve, as their leader and Prime Minister, Mark Rutte, has followed Germany in taking a hard line on the 3% deficit limit and the Commission’s enforcement of it.  The reasons for Labour to back additional austerity are much less clear.

So in the Netherlands and elsewhere in Europe, on the issue of the stupidity of pro-cyclical fiscal policy, it is only the views of politicians on the far-left or far-right that matches those of the majority of macroeconomists.  Given the social, economic and political consequences of declining real wages and rising unemployment, which fiscal austerity only makes worse, this is both a very sad and rather dangerous state of affairs.

[1] Yes, this is the actual balance. The OECD estimate that the underlying primary deficit was 1.4% of GDP in 2012, will be 0.1% in 2013, and in surplus in 2014. I think those economists who suggested that the new Eurozone Fiscal Compact would be more enlightened than the old rules need to ask themselves why that has not happened. 

[2] Of course Germany has also avoided falls in real wages. In Germany there is a clear consensus among the parties of the centre for imposing austerity on others! While Merkel’s position is well known, Andrew Watt discusses here how the macroeconomic position of the centre-left SPD goes from bad to worse.


  1. David Art's 'The Politics of the Nazi Past in Germany and Austria (CUP, 2006) has a table (p6) of average far-right voting percentages in western Europe 1986-2002. The Netherlands is given as 4.6%, and the UK as 0.2%.

    The countries at the top of the table are Austria, Switzerland, Italy, Norway and France respectively.

  2. It's not often I break off your articles half way through, but some of this one is just silly. UKIP is not Golden Dawn, the Front National or even the Freedom Party. It's a single-issue Eurosceptic party that has adopted a set of other, Daily Mail policies in order to look like a proper party. Its core message is about Europe, and not unreasonable. The fact that some people throw up their hands in bien-pensant horror at its very existence, as if it were a Neo-Nazi organisation, does not mean that that is what it is.

    1. So why does a Eurosceptic party gain so much traction? I don't think it is because of worries about rules written in Brussels, or the Human Rights Act. I think it has a lot to do with immigration. And although concerns about migration are not just a function of economic conditions, they are clearly related.

      Now I agree that UKIP is much more gentlemanly than Golden Dawn or the Freedom Party, but are the reasons for its rise so very different from these others? The fact is that we have not had a major party to the right of the Conservatives since the war until now requires an explanation. Do you have a better one?

    2. It is true that UKIP's stance on immigration is probably part of the explanation for its rise. There is also the fact that Cameroon Conservatism paired with the Lib Dems does not seem intuitively appealing to some who normally vote Conservative.

      I agree with you that the Conservatives have allowed themselves to be pushed into an economically damaging stance on immigration. But that really happened before the last election, and before the recent rise of UKIP (hence the almost-immediate, and stupid, immigration cap).

      The real problem with your post is that you are trying to lump UKIP together with real, dangerous far-right parties in a single analysis. You even compare UKIP to the Blackshirts! Yet it is, as you say, "gentlemanly". Some of my friends vote UKIP and I am considering doing so, and I dislike the implication that it would make me a fascist to do so. What is happening in the UK is that a right-wing populist party is filling the void left by a centrist Conservative party and, yes, benefiting from some dissatisfaction over the weak economy, at a time when other countries are actually voting for racists and fascists. It seems to me that the rise of UKIP therefore shows that Britain is still a country that resists the far right.

      Incidentally, you may wonder why someone of my obvious charm and intelligence is thinking of voting for UKIP. Well, I am very much with you on fiscal stimulus, but all of our dimwit politicians are now on the wrong side of that debate, so I have nobody to vote for. I do think, however, that Britain ought to leave the EU. A vote for UKIP will maintain the pressure on the Conservatives to move in that direction.

    3. I deliberately avoided the F word, because I do not think that applies to UKIP, or the Freedom Party, and to be honest I'm not sure I know enough to apply that kind of label properly. The trouble is that all terms here can appear loaded, because everyone wants to appear moderate and centrist. So any description ('far-right','far-left','extreme') sounds loaded. But I did not compare UKIP to the Blackshirts (which would be really silly)! I just pointed out that the UK had not had a major party to the right of the Conservatives since then.

      What I do not buy is the idea that the current Conservative Party has moved to the centre and that this has created UKIP as just a replacement. I see no evidence that the Conservative Party has moved to the centre.

    4. "So any description ('far-right','far-left','extreme') sounds loaded."

      OK, so why do you use the phrase 'far right' seven times in your posting. Can the reason really be "any description sounds loaded, so I can get away with using 'far-right'"?

      Seriously. Anyone who lives in the UK knows who the UKIP is and has a fair idea of their policies. Just what does the 'far right' epithet add to anything?

      As JB correctly points out above, by any reasonable interpretation, the UKIP isn't 'far right' at all. They are simply what you get when the main parties deprive the voters of a choice on an important issue, in this case the EU.

    5. Only about a third of the people who read my posts are from the UK, so I have to be careful not to presume UK knowledge.

      If UKIP is just an anti-EU party, why are most of its policy positions to the right of the Conservative Party? Like much larger cuts in public spending, except defense where spending would be much higher, a flat tax, more prison places, allow a voucher system to allow people to opt out of the NHS, child benefit for the first 3 children only, completely ignore climate change ...

      So in what sense am I being unreasonable?

    6. The central point being made by Simon is about the unprecedented extremism of the centre. The narratives of UKIP may be more extreme on immigration and Europe but the policy of entrenching the recession and increasing poverty levels is coming from the conservatives and Lib Dems. This policy is not being attacked by Labour.

      If the common ground in British politics only offers further immiseration and long term poverty we may see worse than UKIP before long.

      The UK and Europe have forged an extremist political consensus. Nobody should be surprised that they are being challenged by parties with platforms that are more outlandish and radical than we have been used to......

    7. UKIP are a protest party in transition and still unsure if they are a home for Old Labour and Tory voters or a Libertarian Party of sorts. Your belief they are "to the right of the Conservative Party" is predicated on the Conservative party being fixed on the right and an immovable fixture in UK politics. UIt is neitherof those things imho.

      With no actual choice presented at the ballot box apart from re-warmed political-corporatism presented as 'sensible' moderate' 'centrist' you will continue to see the decline of party memberships and alienation from the polical class amongst the electorate. Hence the ris eof UKIP as a wonderful stick to beat the complacent and corrupt in our public life.

    8. Simon,

      You write "I do not buy is the idea that the current Conservative Party has moved to the centre and that this has created UKIP as just a replacement. I see no evidence that the Conservative Party has moved to the centre."

      This is clearly nonsense. Cameron has moved heaven and earth to "detoxify" the conservative brand, which has been a march to the centre, particularly on social issues. This has opened up ground on the right for UKIP to outflank them. UKIP supporters are largely ex-Tories pushed by social issues or ex-Labour pushed by immigration. Key centrist policies:

      Gay marriage
      Overseas aid
      Climate change
      Prisons policy
      Reform of the police
      Defence cuts
      Reverence of the NHS
      Refusal to countenance grammar schools

    9. The fact that UKIP sympathizers resent the "far-right" label is interesting and symptomatic of "early years". In France, no-one resents the label anymore, whether it's FN (fascists and racists in disguise) or whether it's these other anti-immigration parties they have. There is currently an attempt by the far-right of the UMP ("conservatives" equivalent) to hijack the whole party line, much in the way that the Bushies and later tea-partyists have hijacked the Republican party in the US, they call it "la droite décomplexée" or "right-wing without a chip on your shoulder." And that's the second stage. In the third stage, the Reichstag is set on fire ...

      I left the UK twenty years ago: I have no idea what the UKIP stands for. Many people visit this blog from Paul Krugman's blog and other pointers like that, so a bit of UK background is actually very helpful. To call the UKIP "right-wing" was helpful to me, and the resentment it caused even more so.

    10. Whats allowing parties to shirk off the tag of far right as being of no weight is its over usage. These parties represent a demand in those societies to have a debate on certain issues and as long as that demand is ignored and anyone who says there should be a debate is labelled a far right extremist ready to burn the Reichstag or nearest parliament then the meaning of the word far right will continue to be debased with the effect being that they will continue not to care when called such. Meantime that need for a debate remains and is legitimate and not an indication of some insane desire to establish a reich in Surrey.

      I oppose the UKIP because they are a right wing neo-liberal party which makes Thatcher look like a trade unionist. Their role in engineering a debate on current UK immigration policy and the EU is perfectly valid and legitimate.

      Any resentment I see on this page comes from people who are annoyed but the tired old tactic of labelling opponents far right and hoping the debate goes away.

    11. So wait, does everyone just think their personal political position is "the center." Makes as much sense as anything, I suppose. . .

    12. One can dispute as to whether or not UKIP is far right. But are they important ? OK, they have done well in elections for the European Parliament but like other British fringe parties -and unlike many Far Right parties in Europe - they have made no progress in parliamentary elections.

    13. It's ridiculous to call UKIP "far-right". The normal usage of that term means racist, authoritarian, anti-democratic, and socialist. UKIP are non of those things. They are mainly concerned with leaving the EU, which is an entirely sensible and respectable position held by people such as Tony Benn. They are also Thatcherite conservatives who disagree with the high-levels of immigration since the late '90s. So they are no more far-right than Margaret Thatcher and the millions of people who voted for her.

      I think many voters have turned to UKIP because they think the Tories have moved to the left since Cameron took over, and because they feel strongly about the EU. If those who are against unlimited immigration are voting UKIP rather than turning to the BNP (who are far-right) that's surely the sign of a healthy democracy.

    14. "It's ridiculous to call UKIP "far-right". The normal usage of that term means racist, authoritarian, anti-democratic, and socialist."
      Wow, you must be a teabagger! Only moronic Americans aka teabaggers, try to paint socialists as fascists.
      Actual Europeans, even those from the British subsubsub-contintent-let, know that fascists are extreme right wingers, and socialists are leftwing.

      Oh well. UKIP is morally MORE despicable than FN or "Freedom" Party, because it's a racist/fascist as they are, but, tries to hide it. They have a number of oratorically gifted leaders. If anything, that makes them MORE hitler-like, not less.

      And no, Obama is NOT a gifted speaker, gimme a break, he stutters and uh's WAY too much, he mumbles his "You know" into "Yo", which sounds really inept.

  3. Prof Simon,

    Your support for Portes and disapproval of the tabloids misses one point. I think Portes has concentrated on immigrants AS A WHOLE, and ignored the economic contribution of particular groups of immigrants (though I might be wrong there).

    The evidence is that immigrants from English speaking countries (Ireland, Canada, etc) are the most productive, with immigrants from Muslim countries being the least productive.

    And since the tabloids are much more opposed to migration from Muslim or African countries than from Ireland, Canada, etc, the tabloids have a point.

    I’m fairly sure there is evidence on the performance of different immigrant groups here:

    1. You should probably read that paper you linked to. I found this interesting, the entrepreneurship rates for people from Turkey, Pakistan, Iran are triple those for native-born Englanders. I wonder if they're having trouble accessing the local labor market? I wonder if racism has anything to do with that?

  4. Ralph, with the possible exception of Ireland, is there any significant immigration from English speaking countries? (And i think you mean white English speaking countries as you don't mention Ghana or Nigeria.) Are Americans flocking here for our high wages and large cheap houses? Canadians? Strines and Kiwis are temporary.

    And plenty of people do object to Eastern European immigrants, which is where the numbers are. They believe Poles etc have pushed down wages and employment. Portes has just about convinced me that belief is mistaken, but the immigration debate is about Eastern Europe.

    You obsess about a tiny number of white commonwealth immigrants and Muslims, ignoring the vast majority of immigrants.

    1. Since you brought up numbers, without citing any, you might this interesting. There is a table on page 11 of the paper Ralph linked to. I tallied up the total eastern Europeans, and I got 545000 from USSR, Poland, and Czechoslovakia. I got 710500 from Pakistan, Bangladesh, Turkey, other Middle east, and Iran. The total from all countries is 4738950, those two groups are only 11.5& and 15% of all immigrants, respectively.

    2. The actual number of people in different groups (from Muslim countries, English speaking countries, etc) is not important. My basic point, to repeat, is this. Portes argues (I think) that immigration is good because output per head of immigrants is higher than natives. My answer is that that logic can be taken further: why not (using Portes logic) accept productive groups of immigrants and reject the unproductive ones. Or take it even further still: accept productive INDIVIDUALS and reject unproductive ones (a policy that I think Australia is keener on than most countries).

    3. Ralph, just because someone is unproductive now, doesn't mean they won't become more productive someday, or that their children will never be an asset to your country. There's no easy way to determine "the right kind" of immigrant. Maybe the kid of one of the current "undesirables" will be a tremendously successful surgeon. Australia was started as a penal colony, after all, and they seemed to turn out alright.

    4. My own country, the US, was founded by religious nuts, vagabonds, fourth sons, and various other shady characters from the dregs of "proper" European society. Overall I think America turned out alright as well, despite the lasting influence of those religious nuts.

  5. In France, there's definitely been gains by less centrist left and right.

    The 2002 National Front getting into the presidential 2nd round was mostly a fluke of especially poor coordination on the left. The NF did better in the presidential 1st round in 2012 than their "high water mark" of 2002.

    Also, the French Socialists have lost some of their left flank to the former communists. A bit like in the Netherlands, it's been masked by gains over the centre-right (UMP in France, CDA in Netherlands).

    The discontent is showing up much more at the ballot box in France than in the UK. France is not the best comparator for a more stable centrist consensus.

  6. 1. On France
    Btw LePen got the highest percentage in a recent poll (president). Caused by Hollande being utterly crap and the centre right split basically in two but nevertheless.
    It is not only The Netherlands and the UK.

    2. On the Hols.
    Traditional parties seem not to have any answers. They simply looked to be found out. The present leaders of VVD and Dutch Labour being the last ones (and imho not without reason).
    Similar btw with the UK.
    Add populist parties together in the land of the Hols (all 8478319 of them) and they now in polls have roughly 50% (and likely would get 50% of the seats as well). Btw they are also nearly all Eurosceptic.
    Anyway the populist are doing it mainly for electoral reasons and because it is different from the traditionals. But it is clear that on this they have huge support.

    3. In Holland imho next to a failed economic policy and being EZ also the bursting RE bubble is a huge problem.
    Please note that eg France and Belgium with considerably weaker economic fundamentals still have a similar bubble (intact). If those one go (with rising interest rates probably a good bet)their economy (and banking sector) will tank. And harder than Holland now.

    4. The EU as before is messing policies and PR as well up (and big time).
    It should like any assistant accountant can tell you focus control on the danger points (like Italy and Greece and Eastern Europe). The inefficiencies and corruption is mainly there. However they spread it more or less equally over the whole EU. With also the North effectively better audited because it is more modern and has better controlable systems than the South. That is going to be a stinker. Huge transfers to the South from a non-growing and aging North are not politically sellable when there is every week a scandal in the media about Berlusconi and Co. The link between the Northern Wallet and Bunga Bunga is not really made yet but just a matter of time.
    Next to that it is the one size fits all policies that are doing a lot of harm here. As Simon says Holland has room to borrow. And closing wholes with 2/3 or more taxrises (aka Dutch style government austerity) hardly will do much good for consumption and confidence in general. And so is kicking deliberately the bottom out of the own RRE market. However to set an example it still goes for the 3%.
    Btw in earlier versions of Maastrigt (a Madrid version) there is also a spread criterion iso only the 3 and 60. It is taken out to make Southern memebership easier.
    Summarised policies should leave more room if they donot harm others.

    PR this and similar things is killing the image of the EU in countries like Hol- and England (and several others). Simple as that.
    The strange duckling is Germany and not the other way around. It still has no major populist party. But if they have a GrillHorst or a Wilder Gert they are likely toast as well. EU views are not that much different there and now completely unrepresented in parliament. Simply will at one point create political pressure.

  7. Part2

    5. I donot take any views on immigration serious that doesnot split immigration into two parts. Which are very easily identifiable. Semi or un-educated from poor countries (be they in EU or outsede) and the rest. The rest works fine. Hardly any press items, all the problems economically and socially are in the first group.
    It is imho the only long term sustainable solution re immigration is keeping the uneducated poor country origin immigrants out. It is as simple as that. Now it is moving into a direction that all immigration is likely to suffer (also the emigration as a lot with prosperous countries it is reciprocal, don't let Japanese or Singaporeans in your people will not get in there as well).

    6. These populist parties are nearly impossible to place in the standard spectrum. They are usually called ultra-right by the locals (as not very successful framing). But we would call them (as mainly focussed on the bacon) as socialists. In the North Of Europe they are basically social conservatives (eg like to keep the welfarestate in tact but not for Johny Foreigners). In the South their basis is more modernisation. However you cannot vote for a party that donot exist.

    7. Donot know if I look more forward to see Simon closing all his future posts with vote UKIP as supposed to be the morus in those circles or Geert Wilders growing a beard.

  8. Whether austerity is good or bad is moot. Fact is, that the financial markets required it with that sovereign debt crisis thing.

    1. Aaaaggghhhhhh

      No they didn't . Look at UK gilt yields. Look at NL gilt yields. Look at Belgian gilt yields, who did no austerity at all. Just look at any facts at all.

  9. I think you also miss the subtleties of what is happening in the Netherlands.

    The painting of the Freedom party or as they are known in Holland the PVV as far right is not quite accurate. The gay friendly pro-Jewish pension right defending far right seems a bit unusual.

    Whats driving the growth of the Freedom party is the idea that there also exists negative externalities to immigration.

    I cannot abide the UKIP with their neo-liberal policies but referencing them in this manner: 'This is also unusual from a historical perspective: since Oswald Mosley the UK has a proud tradition of resisting parties of the far right.' was poorly done Simon.

    Its very tempting to daub all these parties as being each and everyone the equivalent of Golden Dawn but that's to fundamentally miss whats happening. In general there is a lot of group think analysis in relation to those parties.

    Without the crisis the Freedom party would still be quite high in the polls. Why is missed when the analysis includes references to the 30s and hints of the spectre of the moustachioed lunatic.

  10. Strikes me that this is an essentially economic explanation of what is, at least in large part, a political problem, and not just in Netherlands.

    Firstly, the rise in populist parties has been going on across Europe for more than 20 years - with parties like Front National (FR), Dansk Folkeparti (DK) and Fremskrittspartiet (NO) being some of the earliest to make breakthroughs. Others succeeded in the 1990s and early 2000s, before the financial crisis - do not forget Wilders's predecessor Pim Fortuyn, and Haider and the FPÖ in Austria. Yes, in Netherlands and the UK populism has risen since 2008 but it's not adequate and complete as an explanatory factor. And by this I do not mean to say that UKIP is like the PVV, or Dansk Folkeparti is like the FPÖ - I mean that all of these parties are insurgents, shaking the status quo and playing the politics of anti-politics in their different ways.

    Classical mainstream political parties of centre left and centre right have been declining in strength and significance, even when - as in the UK - the effects have been masked by the election system. The vast majority of mainstream parties across Europe have suffered declines in membership since the 1970s onwards, and throughout the 1990s and 2000s declines in levels of trust and, marginally, in terms of election turnout.

    In addition the plight of the mainstream left in both Netherlands and Greece has been important. The PvdA suffered through the times of Balkenende's administrations, not knowing whether to move towards the centre or towards the left, and lacked compelling leadership. In Greece, PASOK was decimated as a result of Papandreou and the the crisis, as they were in power at the height of the problems and had to clean up some of what New Democracy had caused, and Golden Dawn partially profited.

    I'm aware that my explanations are also not complete, but this picture is far, far more complicated than the original post makes out.

  11. What you call center-right and center-left (I don't know why you even bother to make a difference) seems to hold pretty extremist views about economic policy, don't they ?

  12. Sorry, this is all too easy. What is currently labelled far right or left in The Netherlands is not comparable with what happened in the 30s, their rise does not have it's origin in the current economic crisis and I find it insulting to say their popularity would suggest Netherlands is an immature democracy.
    The only thing that is true is that the far right and left in The Netherlands are against the austerity policy, but so say that this is the reason why they became so popular is not correct. They have been popular political parties with good election results for more than a decade (if you include the Fortuyn party, before the PVV), far before the current economic crisis, because of a variety of political issues ignored by the mainstream parties.
    What I find much more interesting than this austerity debate is that the reason all these countries in the EU are in trouble is a housing bubble, which has proven to be devastating for their economies. How in earth have all these politicians and economists missed this? Or more importantly: how are we finally going to prevent these devastating boom bust cycles from happening again?

  13. The PVV was perfectly capable of rising through the good years of the Euro. Their biggest gains were in 2010, before the austerity package, and its origins are less in euroskepticism and more in racism. A story of the Dutch far right's rise has to at least mention Pim Fortuyn and his assassination. Throughout the mid-2000s, the Dutch Very Serious People's position on immigration, i.e. that immigrants are a serious problem to be solved, disintegrated, and the growing voices were the integrationists who treated immigrants as people (e.g. Job Cohen) and the fascists (i.e. the PVV).

    But a complete story of the rise of the far right in Europe has to include parties in other countries, too. And in Switzerland, Belgium, and Austria at least, the far right grew in the 1990s and not just recently.

    1. Calling the PVV fascists is a great allows me to safely assume that you missed the point by a wide margin.

      It is irrelevant wether or not they are, technically, fascists or not. The point is that they try to put topics on the political agenda that policor people would rather sweep under the rug in an ironic attempt to maintain their own superior position by putting the immigrant de facto in a position of someone who "needs their help". Granted, is it a sad state of affairs that it befalls on someone like Geert Wilders and his band of semi braindead demagogues to carry this torch, and not someone as intelligent and eloquent as Pim Fortuyn, but the topics háve to be pushed because the tide of Policor thinking in the Netherlands is just so very powerfully rooted in the upper classes.

      Calling them fascists is immediately killing any debate about wether or not they might actually raise some valid concerns -which they do-. Because who would willingly agree with fascists right? That is the political and social equivalent of hugging a lepper.

    2. The main topics they're putting on the political agenda are hatred of Muslims and immigrants. Those supposedly valid concerns are the same standard racist FUD that their brethren in segments of the US Republican Party raise about blacks and Hispanics.

      And yeah, the Very Serious People in the Netherlands don't have a clue, either. That center collapsed in 2005 and it was about time that it did. The rise of the PVV is their legacy. But it's a negative effect, same way that (for example) if second-generation immigrants don't learn the local language then it's usually a negative effect of poor educational opportunities.

    3. Alon,

      Who are the very serious people in the Netherlands?

      Are you writing from an American perspective. I see mention of the US Republican party and it is a struggle to understand what you see them having common with the PVV.

      PVV is Israeli friendly so the same, but gay-friendly, so no, and also a defender of pension rights, so no, and pro-affordable health care.

      It is very easy to call out fascist this and that but it misses the reality of why the PVV are there.

  14. I think the rise of UKIP parallels the rise of nationalist politics across Europe and it predates the economic collapse. It has had a great boost for sure as a result but these forces have been at work for a long time.
    As someone said these parties often favor welfare for specific groups but oppose its extension to the other. Selective socialism. UKIP is big on pensions for example.
    Most left wing educated people schooled in anti fascism are repelled by the blood or soil argument. Yet if one looks at UKIP, a chunk of their voters are left wing working class who want state spending on things they approve of. This is also true in France, the NF is by no means an economically liberal outfit.
    Populist is when you think about it really a middle class way of saying 'People with less intelligence than me are gulled into voting for these party's unrealistic / distasteful policies which if implemented will be bad for these very voters' Alternatively as UKIP never tire of saying, populist means its what the ordinary voter wants but never gets.
    Scotland, Sin Fein and Catalan are examples of left nationalist parties with a spectrum of soil and blood beliefs. Perhaps a real, perceived or self belief in historic oppression allows one to cast the other as the stronger, thus avoiding picking on the vulnerable and leads to left wing nationalism? However if you are in England or Netherlands and belong to the dominant group, your other is inevitably the weaker more vulnerable segment (immediately then we are trained to shout fascist).
    As to austerity, everyone is in favour of it being done to someone else, much like taxes. So a policy which identifies a suitable group of others who need to go on a diet (bankers, fat cat bosses, high paid expenses troughing civil servants, the feckless 20 kids on welfare sponger, the military, pick your victim) is likely to garner votes. Whereas a reasoned argument for fiscal stimulus is by and large a vote loser, because in general people compare themselves to others rather than themselves. Doing better than someone else (or doing less badly than them) seems preferred to us all advancing together.

    1. good analysis. And the ''blood and soil'' argument that made populist parties popular, is not just about the fear having to pay for national immigration, in the EU it's also about the fear of some Northern countries having to pay for Southern countries. Hence the rise of euro-skepticism.
      EU countries have made the error of never having had a good political debate with their voters about immigration, because it was a taboo subject. Questions that should have been discussed are: do we want immigration? What kind of immigration? Does it benefit the economy or not? Does it help coping with aging societies or not? What are the disadvantages? etc.
      Countries like Australia are much more clear about their immigration objectives, and what kind of immigrants they want, and they use selection criteria. In EU countries this was seen as politically incorrect, as every poor soul on this earth should have a chance in life. As a result many of the countries had a large inflow with poor, unskilled, even illiterate immigrants from North Africa or beyond, who now are seen as a burden on the welfare state and are causing culture clashes
      You can't have a welfare state and uncontrolled immigration, that's the huge mistake European politicians made. The anti immigration sentiment was already there with working class voters before the economic crisis, but as now there is not enough money anymore to keep the welfare state on the same level, the issue is becoming even more urgent.
      As long as this is issue is not sufficiently tackled by mainstream parties, the right or left populist parties will keep growing with ordinary voters.

    2. All well and good and very reasoned but if you say Europe's policy should be the same as Australia and focussed then be prepared for some level of abuse.

      'You can't have a welfare state and uncontrolled immigration, that's the huge mistake European politicians made'

      Peter Sutherland is writing in the Social Europe journal again commenting on the desirability of immigration. Peter Sutherland is the chairman of Goldman Sachs. Do you think he made a mistake when he and his establishment buddies designed the policy.

      Ending the welfare state isnt a mistake to those people. They will oppose a practical system like one for Australia and they'll happily have their opponents slandered with every insult.

  15. Dear Simon, probably way too late to get a response and is marginal to your post which I mostly agree with heartily. This is a genuine inquiry not an angry pushing of my per-established point of view. I am, I think considerably to the left of you, against austerity,have a girlfriend who is non-EU and am very much against intolerance. I can see that the major causes of this are not immigrants but crap economic policies that kill demand and fetishise inflation over jobs. But all the economic analysis that proports to be pro immigration - Portes etc - in fact what I read them as saying (I am an amateur at the economic stuff) is that immigration makes no difference to economic growth as a whole. They concede, often sotto voce, that it may well make things worse for those at the bottom. Do I have this wrong? I may well. Also if there is no overall benefit in economic terms people who don't like immigration for other reasons (and they are many legion) are at least semi reasonable to say, well if it is economically neutral then I don't want any. All this is merely to ask if the liberal left is making the wrong case on immigration. Rather than try and say that it is somehow beneficial, when the evidence indicates that it may be mildly negative for the worst off (?), would we not do better to argue very strongly against market fundamentalism, and to replace immigrants with plutocrats as the villan in the narrative?

  16. The idea that UKIP are "far right" is ludicrous. They have made their success predominantly on two policies - the EU and immigration - in which they represent more mainstream public opinions than the other parties.

  17. Simon,
    You wrote the following in comments which completely contradicts your article
    "If UKIP is just an anti-EU party, why are most of its policy positions to the right of the Conservative Party? Like much larger cuts in public spending"
    So according to you the public dislike austerity so they are voting for a party which advocates even greater spending cuts! I'm afraid its back to the drawing board for you and your theories. People in the UK are voting UKIP because they want to leave the EU, its as simple as that, no ivory tower explanation necessary.

  18. There are a troubling number of pro-UKIP posts from "Anonymous" commenters. I wonder if they're all the same person.

    1. Its just that the analysis in the OP and some posts have really missed whats going on with the UKIP's rise. Easy to then see people will protest that.

      I dont think you fully appreciate whats driving the UKIPs growth. The problem with shouting fascist at everyone is the facts get lost.

  19. I think you'd have to be deluded not to see that the Farage agenda is one of boozy, xenophobic, extreme right-wing crackpottery - to the degree that Farage ever says anything other than to blame "Romanians" or "Bulgarians" for the largely self-inflicted woes of the British people. The sad truth is that neither Thatcher nor Blair were up to the job of creating a strong economy for the UK - and both offered a diet of poisonous nonsense and pre-election bribery(tax-cuts! preciousss! tax-cuts!!! yessss, precious, we loves them!!!!) which achieved nothing except to put off the day or reckoning, damage the public finances and enrich the corrupt and dishonest. Thatcher served up a diet of dishonest and harmful privatizations, Blair frittered away money on PFIs. Both relied on the chronic ignorance and short-sighted greed of the British people, urged on by a despicable media. Cameron is simply the sorceror's apprentice who, assisted by his witless crony Osborne, has made a complete hash of the promising economic recovery he inherited from Labour - and has achieved nothing in terms of strengthening the public finances. As for the notion that the UK would gain by leaving the EU, this is simply the final delusion of the same self-blinded people who want quick fixes without doing any real work to strengthen the economy. By all means, chase that particular pied piper down the road as hard as you like. Just don't delude yourself that this latest desperate attempt to blame other people for Britain's woes is going to be more than a quick hit of unjustified xenophobic self-esteem.

  20. Thank you for your posts Simon, I find them invaluable. Z

  21. This post pretends that the extreme right possesses any sort of wisdom because they want the same thing as the majority of economists: no more austerity.

    Not sure about that, because consider the source, at least in the Netherlands, the Freedom party doesn't take that position because they've thought about it, but because they're populists, who saw opportunity knocking.

    Mr. Wilders was rightly mocked when, in the midst of his anti-immigrant campaign in 2010, he all of a sudden declared that EVERYTHING was now negotiable, except ... raising the pension age from 65 to 67.
    Upon which a columnist mocked him: "For years Wilder's been preaching about the rising Muslim hordes bringing about the end Civilisation, but now, that's NEGOTIABLE? as long as mr. Wilders can retire at 65? WHAT??? Yah, gimme a break ...."

    To make a long story short:
    Motivation for far right opposition to austerity is anti-immigration, since they hope to gain the poor white vote.
    But they're not actually committed to the poor.
    Unlike the real socialists, who are populist but are too, actually committed to helping the poor and who are consistent on that.

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