A Spoonful of Populism is the Medicine We Need
A Discussion of “Is Populism Necessarily Bad Economics?”
Populism is on the rise. Is that good? Is that bad? What is it anyway?
Dani Rodrik (2018) has written a thoughtful article that helps us define what it is and when it can be a force for good.
First, he states there are 2 kinds of populism: political and economic. Political populism is dangerous but economic populism can go either way.
To define it, Rodrik states
“The distinctive trait of populism is that it claims to represent and speak for ‘the people,’ which is assumed to be unified by a common interest…’the popular will.’” (p. 196)
The reason he is against political populism is it removes checks on political power that have been built into the system. Without these checks, “democracy degenerates into tyranny.” (p. 196) However, a political populist would say these checks are just thwarting “the people.”
Similarly, economic populism seeks to overthrow existing external constraints on policies that are harming “the people.”
What policies? (p. 196)
- Autonomous regulatory agencies
- Independent central banks
