We’re seeing right now just how chaotic things can get—and not just in the results of German state elections. There’s the Trump-style rollback of government services, paired with rampant protectionism, and a chainsaw-wielding Argentine—or a chancellor who, in an effort to attract investors to Germany this week, tried to tout German virtues in a somewhat surprising way, such as the fact that we Germans get up early (which was, at best, meant to be slightly ironic). The Chinese are sure to be deeply impressed.
Almost at the same time, ideas are sparking a great deal of support (and opposition), such as those Isabella Weber outlines in her book on anti-fascist economic policy—ideas that could hardly stand in sharper contrast to Merz’s belief in success through hard work. The point is that the market simply doesn’t work sometimes. And that in such cases, government intervention would be necessary—for example, to make housing affordable again or to cushion new inflationary shocks early on, rather than letting them run their course in the belief that the market can be controlled—even though everything suggests that this primarily benefits authoritarian forces.
There’s certainly a lot to suggest that this isn’t just about (a lack of) affordability, of course. In our Reality Check, we empirically analyzed the various reasons why people vote for authoritarians and populists. But here’s the thing: when even the diagnoses of today’s problems diverge as widely as they do right now, that’s pretty much the opposite of a socially unifying paradigm. This is no longer a matter of nuances and political variations, but of perceptions—now barely reconcilable—of what drives the majority of people. There is, after all, considerable empirical evidence suggesting that economic uncertainty, for example, is a major factor in the election of populists—and that this uncertainty has also arisen from an excessive reliance on the market. There is a problem when mainstream economics, despite all the drama, fails to recognize this as an issue to which economics can and should contribute a solution—a solution that goes beyond simply counting on economic growth rates.
Irreconcilable? Perhaps. But it’s also possible that this resistance is part of a typical shift from an old paradigm to a new one—in which some cling all the more stoically to old market-liberal dogmas, while the new paradigm gradually gains traction. That could very well be the case now. Not because Isabella Weber is right per se, but because what she describes has been contemplated for years by new thinkers and is maturing into a widely accepted insight—and because it resonates more convincingly with people than the stoic call for the market.
Evidence of this could include phenomena such as the disappearance of the overly technocratic and economically liberal FDP; or the record-low popularity of a chancellor who stands for the old ways—or the downfall of Donald Trump. Similarly, on the positive side, the new mayor of New York enjoys such widespread support for his plans to make life more affordable; much like Andy Burnham, the new British prime minister, who took office with a comparable agenda—as a result of which his Labour Party has overtaken the nationalists in the polls. Even if none of this proves success yet: perhaps the paradigm shift is just entering a new phase.
Credit Picture: (c) Christian Charisius/dpa