Winner of the New Statesman SPERI Prize in Political Economy 2016

Tuesday 24 October 2023

The extreme right and austerity


Brad DeLong’s invaluable Grasping Reality carries a section called ‘Very Briefly Noted’, and on 15/10/23 it had the following two items next to each other (headlines only):

Ricardo Duque Gabriel, Mathias Klein, & Ana Sofia Pessoa: The Political Costs of Austerity

Noah Berlatsly: The Economic Anxiety Explanation of Fascism Is Wrong

The first is a detailed study that shows across countries that periods of austerity are followed by increasing support for the political extremes, and particularly parties of the far right [1]. It’s a study I came across a few months ago and it was on my list of things to write about. The second argues: “There just is little to no evidence that economic hardship leads to fascism.” At first sight these two pieces seem to contradict each other.

This contradiction has also been on my ‘must write about’ list since 2016. With both the vote for Brexit and Trump, one favoured explanation was that this represented the disenchantment of parts of the working class that had been left behind by globalisation and the movement of ‘good manufacturing jobs’ overseas. Some of the swing states in Trump’s 2016 victory were part of the ‘rust belt’. In the 2019 general election Boris Johnson campaigned to get Brexit done, and won a landslide by winning the ‘red wall’: large numbers of predominantly working class North England constituencies that used to be Labour’s heartland.

However Noah Berlatsky writes:

“Study after study has shown that Trump’s voters were not particularly poor, but were very racist. Similarly, KKK members of the 20s were better educated and more likely to have professional jobs than most Americans.”

I would add that the Tory voting middle class voted predominantly for Brexit. Although media VoxPops invariably go to some northern, predominantly working class town if they want to hear negative views about immigration, they could just as well go to a middle class town in Gloucestershire and get similar reactions. Studies looking at the characteristics of those who voted for Brexit show two features dominate: Brexit voters tended to be older and to have less years in education. In geographical terms, the cities voted against and the towns or rural areas voted for Brexit, and much the same division applies between today’s Democrats and Republicans.

The way political scientists increasingly talk about these divisions is to think in terms not just of the familiar economic left and right, but also in terms of social conservatives and social liberals. In this two dimensional view, Brexit and Trump are primarily an expression of social conservatism rather than support for right wing economic views. Social conservatives can be working or middle class, but they do tend to be older and have less years in education than social liberals. Social liberals, often younger and/or university educated, tend to live where their jobs are in the cities, while social conservatives are more evenly spread, and so will tend to be a majority in towns and rural areas.

It is also the case that far right parties or candidates generally appeal to social conservatives, focusing particularly on immigration. This is why racist or xenophobic Trump voters could be rich or poor.  But given this, how do we account for the link between austerity (the government cutting public spending and social welfare) and the rise in voting for political extremes, particularly the far right?

The study by Gabriel, Klein, and Pessoa (2022 VoxEU summary here) looks at voting patterns and government spending in a large number of regions across Europe. They find

“both [left and right] extremes gain vote shares as a result of fiscal consolidations, [but] far-right parties experience a slightly stronger rise in voters’ support. We further test for potentially important state dependencies and find that the increase in extreme parties’ vote share is larger when the fiscal consolidation is implemented during a recession as opposed to a period of expansion. In addition, the effects are somewhat stronger in rural and poor regions.”

The authors of the study note austerity “leads to a significant fall in regional output, employment, investment, durable consumption, and wages.” Interestingly, they find that “austerity recessions lead to a significantly larger increase in the vote share for extreme parties than other recessions”, a point we return to below.

These results are consistent with another recent study, by Hübscher, Sattler and Wagner. They conclude: “Austerity is a substantial cause of political polarization and hence political instability in industrialized democracies.” Both studies note previous work by Theimo Fetzer, which I discussed in this post. [2] Fetzer presents evidence of a causal link between UKIP’s vote and austerity. Gabriel et al also note work by Galofre-Vila et al. [3] on the link between fiscal austerity and Nazi electoral success which found that areas more affected by austerity had relatively higher vote shares for the Nazi Party.

In one sense these results are not surprising. Austerity is normally enacted by centre right or left parties, rather than parties of the far left or right. Austerity is also unpopular with many voters. Parties at the extreme can normally oppose austerity, without too much scrutiny placed on the credibility of their proposed alternatives. It almost follows automatically that under austerity votes will shift away from centre parties.

However we might expect that parties on the far left would benefit rather more than parties on the far right. This is because far left parties focus on economic injustice, whereas parties of the far right focus on issues designed to appeal to social conservatives, like immigration or nationalism. As Hübscher et al note:

“Among the different types of non-mainstream parties, radical-left parties, for instance, Die Linke in Germany, the Dutch Socialist Party or France Insoumise, seem an obvious choice for voters who disapprove of fiscal cutbacks. Such parties take a clear stance against austerity and have strongly opposed interference by international actors promoting fiscal adjustments, such as the IMF or the European Union (EU). Some radical-left parties even emerged from anti-austerity movements, for instance, Podemos in Spain.”

However some of the issues that far right parties focus on also have an important economic component, which apply particularly at times of austerity. Again to quote from Hübscher et al (references excluded):

“Many parties, such as Lega or the Golden Dawn, also reframe austerity politics as a migration-related, cultural issue by promoting ‘welfare chauvinism’. This shifts attention to issues where the radical right takes particularly clear positions, such as immigration and the EU.”

The most obvious example is immigration. High immigration is often claimed by parties of the right to reduce real wages or increase unemployment, claims that work because many voters take the demand for labour as given. [4] Perhaps more importantly in the context of austerity, reduced access to public services, welfare or housing, can also be blamed on immigration. In the UK, the Conservative government led by Cameron that embarked on extensive austerity from 2010 often used to excuse deteriorating access to public services by citing high immigration, a theme that the more far right UKIP party made its own when the government failed to meet its targets for net immigration.

Another example would be the right’s focus on the ‘undeserving poor’. As I noted here, left leaning social conservatives might be content with taking income from the very wealthy, but they tend to care much more about those they see as free-riding a social welfare system. Associating the undeserving poor with particular ‘outside groups’ (e.g. ethnic minorities) would also appeal to social conservative voters.

Both aspects of how far right parties campaign may help explain the finding noted above that recessions caused by austerity have a more powerful effect on shifting voters to the far right than recessions caused by other factors. When public services or welfare is under pressure because of austerity, social conservatives will feel more aggrieved by ‘outsiders’ or the ‘undeserving’ accessing those services.

The tentative conclusion I would draw is that economic bad times, and particularly bad times involving poorer access to public services and welfare, will tend to increase support for the far right (or any party pushing anti-immigrant policies) among voters who are socially conservative. However you can be socially conservative and poor or socially conservative and better off, and there is no reason to believe that this effect only applies to the former rather than the latter.

The apparent contradiction I alluded to at the start of the post is unravelled by noting that economic bad times, particularly brought on by austerity, will increase support for parties of the far right, some of which may act in ways that have connections to fascism. However the reason for this is not economic anxiety per se, but instead these parties using bad times to focus the minds of socially conservative voters on ‘outsiders’ who they allege are in some way responsible for the impact of these bad times on voters. When the size of the pie shrinks, that will inevitably lead some to question whether everyone deserves a share of that pie.

[1] I will use the labels ‘far right’ or ‘far left’ simply to denote further right/left than centre right/left parties. It is intended to have no pejorative implications whatsoever.

[2] Fetzer, T. (2019). Did austerity cause Brexit? American Economic Review 109(11), 3849–86.

[3] Galofre-Vila, G., C. M. Meissner, M. McKee, and D. Stuckler (2021). Austerity and the rise of the nazi party. The Journal of Economic History 81(1), 81–113.

[4] In reality immigration also increases aggregate demand, and therefore increases the demand for labour.

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