How is it that so many people voted for Donald Trump again in 2024? What makes so many people so susceptible to trusting authoritarians and populists? These questions stand at the beginning of the thinking Isabella Weber lays out in her book. After all, the stakes are nothing less than stopping a trend that threatens to lead toward a new kind of fascism. And since, at its core, this is also about economic factors, the argument goes, it must be tackled through economic policy as well – through an “antifascist economic policy,” as the title of the book with which the scholar is currently making waves puts it. It is time, she argues, for economic policy to stop focusing solely on growth and economic indicators, and instead ask what an economic policy would look like that actively promotes and protects democracy.
Isabella Weber begins her argument historically. As the economic historian Karl Polanyi showed, even the attempt to create a self-regulating market economy carries a danger for the social fabric and the ecological foundations of human life. In extreme cases, this can even lead to fascism.
As evidence, the economist cites, among other things, the austerity policy of the Weimar Republic, which relied heavily on the self-healing power of markets. At the time, attempts were made to balance state budgets through austerity measures. In the end, however, this led even more people to vote for the Nazis. In recent years, many European countries have suffered under a similar form of austerity, which has likewise strengthened the inclination to vote for authoritarians.
Like numerous populism researchers today, Isabella Weber sees heightened economic insecurity as a core cause of why people seek refuge in authoritarians. Shocks such as the financial crisis, the pandemic, and the inflation shocks of recent years have produced a sense of powerlessness – all the more so given the sharply rising profits and wealth of the richest at the same time. This in turn leaves people with a feeling of powerlessness. This in turn leaves people with a feeling of powerlessness. Governments, Weber argues, have repeatedly proven incapable of taking measures that “allow people to live with dignity.” That drives them into the arms of populists. According to the economist’s assessment, the perceived “loss of control” is not an illusion but an expression of a real shift in power.
All in all, Isabella Weber’s position lands fairly close to the consensus in modern populism research, as the Forum compiled it in its recently published “Reality Check.” Numerous empirical analyses find that people do, in fact, vote for right-wing populists in greater numbers following inflation shocks. There is also ample evidence regarding the effects of austerity on voting behavior.
Populism researchers such as Robert Gold, Thiemo Fetzer, and Andrei Guriev have found at least equally clear evidence in their empirical analyses that people vote for populists more often when they live in regions affected by economic upheaval. Here, too, a sense of lost control frequently follows. Strong immigration also contributes to populist voting, according to their findings – though the connection here is less clear-cut than is often assumed.
As a counter-model to austerity policy, Isabella Weber highlights in her book the New Deal of US President Roosevelt in the 1930s: Roosevelt kick-started public works and investment, strengthened unions, and made everyday goods more affordable. The United States was spared fascism during this period.
A great deal of the book, in fact, revolves around the question of how governments can ensure that life remains – or becomes – affordable for people. Isabella Weber proposes a model built on “floors and caps.” The floor principle is about making housing, food, energy, mobility, care, and health available to everyone. On the other side, “caps” are meant to prevent excessive price increases – for instance during crises – from being passed on to consumers. It is also necessary, she argues, to limit extreme concentrations of power – for example through competition law, higher inheritance taxes, or state competition with the private sector.
Among the concrete measures the economist lists are:
- Immediately effective price measures: as already practiced in Mexico, the state could agree with supermarkets to keep prices for around two dozen staple foods stable; in return, retailers would be given relief, for instance on import tariffs and fees.
- Buffer stocks: to prevent excessive price spikes resulting from events such as wars, the state could build strategic reserves to keep essential goods available at the national level. This is a kind of “economic disaster preparedness.”
- Protection against inflation in housing, transport, and energy: rent caps could help against excessively rising rents, as could incentives for private and public housing construction; local public transport prices could likewise be kept low; it would also be important to design climate policy so that it visibly improves everyday life instead of merely demanding sacrifice.
In her book, Isabella Weber also proposes measures that go beyond the question of prices – such as a green industrial policy that benefits workers; greater co-determination within companies; and investments in housing construction and public infrastructure.
According to Isabella Weber’s vision, state measures could be financed through windfall profit taxes as well as higher taxes on large fortunes and inheritances. She also argues that today the state must step in with social benefits whenever the economy drives up prices excessively. If the state were to curb price excesses, fewer social benefits would need to be financed as a result. Her approach, she argues, is therefore no more expensive than the status quo. It is more costly for the state to repair the damage after crises than to prevent the costs from arising in the first place through preventive intervention.
For proponents of conventional economics, the proposals are cause for alarm simply because Isabella Weber relies on price controls and other state interventions. This, they argue, creates misguided incentives and leads to shortages and evasive behavior. When Isabella Weber proposed selective price controls against inflation in late 2021, Paul Krugman called the idea “really stupid” – though he later apologized, since the arguments behind it were not so stupid after all. How delicate this terrain remains for politics is shown by the case of Kamala Harris: her announced ban on price gouging in groceries drew sharp criticism from mainstream economists in 2024. She subsequently softened the proposal.
What actually matters here is whether the market would really function efficiently without such interventions – something Isabella Weber, like many other economists, doubts in the cases described. The argument: when, say, speculation drives up gas prices excessively as a result of a war, this no longer has anything to do with meaningful price signals. The same applies when rents rise excessively.
Conversely, it is fair to ask whether the assumption holds that supposedly fascist trends can be stopped simply by making people’s lives more affordable. If, according to modern research, there are several additional factors that reinforce the sense of lost control and drive people to vote for populists, then efforts toward affordability alone will not have a decisive counteracting effect.
For that, far more would be needed – above all, ensuring that people can create and secure their own professional prospects. This would require, among other things, a policy that identifies structural disruptions in regions early on and creates new economic opportunities through an active industrial policy.