Donald Trump's approval ratings are lower than  ever. Viktor Orban just suffered a landslide   defeat. Most Brits now think Brexit was a massive  mistake, and most Europeans trust EU bureaucrats   more than their own elected governments. So,  it kind of looks like right-wing populism is   collapsing, right? It seems that people are  finally realizing that random tariff barrages   won't fix the American economy and that populists  may promise to drain the swamp, but they really   mean replace the swamp and that leaving the EU  did not result in more money for healthcare. The   populist surge in the west is over. This is the  end. Or is it? Actually, the experience of early   adopter populist countries shows us that this  is extremely unlikely. For example, in Austria,   populism collapsed in the early 2000s after Jörg  Haider's freedom party government turned out to   be a chaotic mess. But once again, although not  in power, the Austrian Freedom Party got the most   votes in the last election. Similarly, in Italy,  the populist Berlusconi faced a crushing defeat   after it became clear his billionaire who will  rescue the economy narrative was not working. Yet,   Berlusconi always came back. And even when he  himself did not, Italy is now again ruled by a   populist right-wing president. In fact, looking at  these graphs, we can see that the dynamic is often   the same. Once right-wing populism emerges, yes,  it often suffers crushing setbacks due to chaotic   infighting, no economic progress, and the exposure  of massive corruption, but it never really goes   away. So, right-wing populists may suffer  crushing defeats and often embarrassing ones,   but eventually they always bounce back, which  raises the question, why does populism always keep   bouncing back? Why is it not going away after all  of those broken promises? As always on Money and   Macro, we've emerged ourselves into the relevant  scientific literature and selected the four most   prevalent explanations. Narrative number one, it's  the economy stupid? Ordinary people have been left   behind. Narrative number two, right-wing populists  have a point. Mainstream politicians themselves   are the problem. They've become out of touch  on cultural issues like immigration. Narrative   number three, people have just become more racist/  authoritarian. And last but not least, narrative   number four, it's actually social media that's  to blame. That is pushing people to political   extremes. In this video, we examine the evidence  and counter evidence for each theory to determine   which of them has the most convincing explanation  for why right-wing populism keeps bouncing back.   But before solving the puzzle, we first need to  make sure we are all talking about the same thing.   That is, what is right-wing populism actually?  And how is it different from left-wing populism?   Aren't these polar opposites? Why are we talking  about them in the same breath? Well, yes and no.   This is something people often get wrong. Populism  is not at all like socialism or like conservatism.   It's not an ideology. It's a way of talking about  politics a lens through which political conflict   is framed. At its core, both left and right-wing  populism divides society into two opposing groups.   On the one hand, the hardworking people and on  the other, the corrupt elites. Populism is pretty   easy to understand. Essentially, all problems in  society are the fault of these corrupt elites. The   difference between left and right-wing populism  then is which elite group they frame as the   problem. On the left, populists target economic  elites such as rich and the corporations, the   brolicharchy of tremendous wealth, a government  of the billionaire class by the billionaire class.   On the other hand, right-wing populists target  a different kind of elite group, the cultural   elites, such as "The Brussels bureaucrats, the  Amercian bureaucrats, and the Soros network..."  but also academics or mainstream politicians  accused of ignoring ordinary people's concerns   about immigration, crime, and cultural identity.  Different enemies, same narrative. The system   has been captured by elites which no longer  represent the people and simple narratives   often come with simple solutions. So if you  believe that moneyed elites cause most problems,   you should vote left-wing populists into power  so that they can tax their wealth away. And   if you believe immigration is damaging  the economy and eroding local culture,   you should back leaders who are not afraid to defy  cultural elites and take massive actions to close   the borders. Especially the right-wing populist  story convinced a lot of people in the West in   the last couple of decades. But okay, back to the  present. Trump's remanufacturing America story is   failing. Brexit is not making Britain rich and  Orban just lost in a landslide. So why again do   we say right-wing populism will bounce back soon  enough? Well, let's start with the economic story   that should in theory empower left-wing populists.  But surprisingly in reality often empowers the   right. Narrative number one, people vote populist  because they are economically left behind. Okay,   this map shows GDP per capita per German state.  And this map shows where people mostly voted   for the right-wing populist party AFD. This is  not a coincidence. When we look at leaders like   Marine Le Pen and Viktor Orban, we see that they  often struggle to gain traction in thriving rich   urban centers, but they dominate the vote  in rural and declining areas. By now, it's   pretty well known that the hyper globalization  period from the late 1970s to early 2000s created   winners and losers. Chinese workers were  able to produce for the rest of the world,   massively improving their own living standards.  Meanwhile, in the west, highly educated people   in big cities in rich countries were also able to  export services to more and more people globally,   which translated into higher wages for them.  But take a look at this graph. The hourly wage   corrected for inflation for a US worker without  higher education is very similar today to what it   was in 1965. So while during the period of hyper  globalization the US economy kept growing only   the well-educated cultural and moneyed elites have  actually seen their purchasing power go up while   many ordinary people were indeed left behind.  It's not hard to see how this can translate   into politics. If you feel the system no longer  works for you and the same political elites keep   defending it. Of course you will start looking for  alternatives and that is exactly what we see in   the data. Regions more exposed to Chinese import  competition were more likely to support Brexit,   Trump, and the AFD in Germany. Areas more exposed  to automation tend to show stronger support for   populist parties. However, while this evidence  looks convincing, it has three big problems.   First, if we look at people in countries that  truly lost a lot of their income between 1985   and 2015, we would expect right-wing  populism to have surged in countries   like Spain and Portugal. But actually, relatively  fortunate and less unequal countries like Norway,   Finland, Switzerland, and Austria have  seen far bigger right-wing populist surges.   The second problem with the explanation is  once we move from regions to individuals,   the story weakens. As research by political  science professor Larry Bartles shows, economic   disaection turns out to be a poor predictor  of whether someone votes or identifies with   right-wing populism. It is far less informative  than attitudes towards immigration, trust in   political institutions, or broader cultural  values. In other words, yes, many people in left   behind areas vote for the populist right. But if  you want to actually predict whether someone will   support the populist right, you get much closer  by asking what they think about immigration or   whether they trust politicians than by asking them  about what they think about the economy. The third   problem is if populism is about regular working  folks wanting an equal share of the economic pie,   wouldn't it make sense to vote for populists  who want to redistribute wealth, so those on   the left? However, if we look at the data, we  see the opposite. It's especially right-wing   populism that is surging in the West as inequality  increased. So, could it be that people are fooled   by the populist right to vote against their own  interest? That's a story that we hear a lot and it   could be true but actually and it may shock some  of you hearing this from me in this case maybe   economics is not everything. So it's time for this  economist here to step outside of his comfort zone   with narrative number two. Right-wing populism  is actually about out of touch cultural elites.   Okay. The argument goes a little bit like this. No  voters are not confused. The real people who are   confused are the cultural elites. I really believe  that Westminster, the intellectuals, the liberal   elites just don't get it. Take a simple question.  Should immigrants adapt to the customs of the   country that they move to? Large majorities of  the public say yes. This holds all across Europe,   Britain, Denmark, Germany, and Sweden. But among  political elites, only those in Denmark agree with   that view. On the other hand, in Germany, all  politicians except for the populist right, and   yes, that even includes conservative politicians,  are more liberal on immigration than the average   voter? Or take the question, should race be taken  into account in college admissions? Only a third   of Americans agree with this view. Yet mainstream  Democrat leaders from Hillary Clinton to Joe Biden   have consistently supported raceconscious policies  and criticized court rulings against them. This   disconnect between what the public wants and  what politicians want on the other hand is what   political scientists call a representation  gap. As you can see here in this FT graph,   politicians and voters are roughly aligned when  it comes to economic issues like redistribution   and capitalism. Left-wing politicians are close  to leftwing voters and right-wing politicians   are close to right-wing voters. But when it  comes to topics like immigration and crime,   politicians are on average far more to the left  than the average voter. So when the political   debate is dominated by economic issues like  taxes and redistribution, well in those cases,   mainstream parties are relatively safe because  they champion what voters actually want. But   when cultural issues move to the center of the  debate, the dynamics change. If voters feel that   their basic cultural preferences are ignored  or even worse, dismissed or talked down upon,   that gap becomes a big opportunity for right-wing  populists to emerge. The clearest example of this   is the 2015 European refugee crisis. As images  of large numbers of asylum seekers and irregular   border crossings dominated the news, immigrations  shot up the list of public concerns. People did   not necessarily purely react to immigration  itself, but they did react strongly to the   perception of chaos and loss of control. And when  that perception takes hold and politicians are not   reacting to it, then right-wing populists gain a  big advantage. Research by James Denison and Andre   Fer Gues shows that as immigration becomes more  salient, support for populist right-wing parties   rises right along with it. Not perfectly, not  everywhere, but consistently enough to matter.   At the same time, as citizens, we're like, "Oh  my goodness, look at what's going on here. Our   societies are changing dramatically. We're in the  midst of this economic stagnation where, you know,   I feel like I have to compete for jobs. I have to  compete for public goods." And at the same time,   traditional establishment parties are inviting in  tons of immigrants, allowing huge asylum flows,   telling me that if I worry about this or I'm  concerned about this, I'm a racist or a xenophobe.   So, interestingly, when populist right-wingers say  that cultural elites like mainstream politicians   are out of touch, data shows us that they are  correct. Not when it comes to economics, but when   it comes to social issues like immigration and  crime. Yes, the general public is significantly to   the right of most politicians. But as we've seen,  there's only one exception. In Denmark, the Social   Democrats adopted stricter immigration policies  themselves, which coincided with a decline in   support for the populist right from over 20% to  just below 10%. But okay, that's still 10%. So,   there must be more going on. But this was still a  crucial story. In many leftwing circles, though,   the diagnosis is very different. The problem they  argue goes far beyond out of touch elites. No,   it points to the people. Narrative number  three, people are simply becoming more   racist. And honestly, this is not super popular in  academic circles. This explanation, it's actually   an argument that I often hear from friends, so  I thought it was important to address it here.   Nonetheless, many of them watch extreme takes  from populist right-wingers and their supporters.   They scroll through online comment sections and  come away thinking something genuinely dark is   happening. People are becoming evil. People are  stigmatizing entire Muslim communities as violent.   Politicians are showing authoritarian tendencies.  There are conspiracies about Brussels bureaucrates   or George Soros erasing Western civilization. It  can feel like people are forgetting the lessons   of the past, growing tired of democracy and  becoming more xenophobic and conspiratorial. But   is it actually true? Are people really becoming  less satisfied with democracy and more hostile to   immigrants? Well, according to political scientist  Larry Bartles, the answer to that question is   clear. No. Absolutely not. Based on survey  responses from more than 300,000 Europeans, he   finds that they have not become significantly more  illiberal or more hostile to immigration over the   past two decades. In fact, support for European  integration has remained fairly stable throughout   the 21st century. Level of trust in parliament and  politicians, satisfaction with democracy and even   attitudes towards immigration. They have remained  broadly stable over time and have even improved a   little. Of course, there are some exceptions. For  example, Spanish citizens became much more hostile   to democracy after the massive economic crisis  in 2008. However, satisfaction with democracy   has been rising in Finland, Sweden, and Denmark  at a time when the populist right became a major   player in those countries. So overall, no, it does  not appear that people are becoming more racist or   authoritarian, but I do understand why more and  more people feel this way. The YouTube shorts   algorithm sometimes recommends me these nice  videos of how US presidents used to interact with   one each other. I think Mr. Nixon is an effective  leader of his party. The question before us is   which point of view and which party do we want to  leave the United States? I agree with Senator K.   And if we compare that to some of the stuff that  Trump says these days, sleepy, crooked Joe Biden,   where I could stand in the middle of Fifth Avenue  and shoot somebody and I wouldn't lose any voters.   Okay, it's like incredible. Then it's clear that  something has changed. The public is willing   to accept far more uncivilized language. And  actually, this is not just an American phenomena.   Right-wing populist leaders everywhere use  increasingly inflammatory language. So why   does the public increasingly accept that type of  behavior if they themselves did not become more   authoritarian? Well, this brings us to narrative  number four. Blame social media. Social media is   polarizing us. And there's really good evidence  that this is actually happening in two ways.   First, as you can see here, traditional media like  newspapers and radio, well, they gave a voice to   everyone, the hard left, the moderates, and the  hard right. However, as you can see here, cable   TV is already quite a bit more biased towards  both extremes. And on social media, well, oh boy,   the algorithms really love to serve us both hard  left and hard right content, while the moderate,   nuanced, more boring voices are buried in the  algorithms. To explain this, psychologist J.   Vanbo describes four dark laws that drive online  engagement. Negativity, extremism, us versus   them thinking, and moral emotional language. In  other words, content that is more negative, more   extreme, more tribal, and more emotionally charged  is more likely to grab attention and spread. This   means that expressing outrage, attacking the other  side, or using words like disgusting or unjust   or just super simple narratives will consistently  outperform more balanced or nuanced views. So, if   you are on social media a lot, it makes sense that  you will start believing that people are angrier,   more polarized, and more extreme than that they  actually are. But it gets worse. The second way   that social media is polarizing us other than  amplifying extreme voices is by connecting extreme   voices. You see, views that were once socially  taboo like I could have done things to her that   would have made your head spin used to remain on  the fringes. But nowadays, people holding these   views can find each other instantly. When they  realize that they're not alone, then they become   more confident to express those views in public.  So the internet did not necessarily create these   attitudes, but it did make them more visible, more  organized, and more politically relevant. And this   can explain why many of my friends that spend a  lot of time online feel that people on average   have become more extreme, even though research  shows us that they did not. However, again,   this is not the full story. You see, cable TV and  social media spread pretty evenly worldwide. Yet,   right-wing populism patterns vary drastically  across countries. Not every country has ended   up with Americanstyle media polarization.  So this brings us to our conclusion. Which   narrative is the most convincing? Well, one  thing it's clear, it's not narrative number   three. People are not becoming more racist  or authoritarian over time. Anti-democratic   and anti-immigration sentiment did not just  appear out of nowhere in the last decades.   There's always been a slice of a population that  feels this way, which means there's always been   some baseline demand for right-wing populism.  But for the other narratives, given that country   trajectories are so different, the different  right-wing populist surges can probably best   be explained by combining these three other  narratives. First, there was rising inequality,   austerity, the fallout from the financial crisis.  All of that shook people's trust in institutions.   This could explain populist surges in the American  Midwest or Eastern Europe. On the other hand,   populist surges in relatively equal countries like  Norway and Denmark probably have more to do with   a political disconnect on cultural issues. And  finally, the rise of social media and cable TV   probably acted like an amplifier, giving populist  parties that represent 10 to 30% of the population   the power to take over several countries. So yeah,  all of these three explanations are supported by   the evidence. On their own though, there are  too many contradictions to believe them. But   taken together, it becomes clear that right-wing  populism will likely surge back again and again   as long as inequality remains high. Politicians  do not listen to voter preferences on culture and   immigration. And number three, as long as social  media gives populist an algorithmic edge. But   yeah, that's my take. What do you think? Let me  know in the comments below. And if you find this   topic as fascinating as I do, I highly recommend  that you check out the excellent analysis by our   advertising sponsor, The Economists, which I  always check out for the research process of   my videos. For this episode in particular,  I learned a lot from their analysis on how   the Danish social democrats have shifted  right on immigration to counter the far   right. Or if you also care about macroeconomic  stability, I encourage you to take a look at   this article where they explore how efforts  to be fiscally responsible and reduce budget   deficits can sometimes end up benefiting populist  parties. And finally, for a broader overview, I'd   strongly strongly recommend this article on what  populism actually means. As these examples show,   The Economist delivers insights that help you  see the bigger picture and think for yourself.   This is why I almost always rely on their analysis  for my research and it's why I highly recommend   that you subscribe and that's actually now  more interesting than ever given that they   are offering a special 35% discount for money and  macro viewers. Now, whether you prefer their daily   journalism in the Economist app, or you are like  me and enjoy catching up on the global economy   over the weekend with a nice cup of coffee and the  print edition, you'll always stay on top of the   latest global developments and support journalism  that values factual information, integrity, and   an independent point of view. So, don't miss out.  Click the link in the description or top comment   below or head over to ecomus.com/moneymackro  to claim your exclusive 35% discount today.

The populist surge in the west is over. This is the  end. Or is it? Actually, the experience of early   adopter populist countries shows us that this  is extremely unlikely. For example, in Austria,   populism collapsed in the early 2000s after Jörg  Haider's freedom party government turned out to   be a chaotic mess. But once again, although not  in power, the Austrian Freedom Party got the most   votes in the last election. Similarly, in Italy,  the populist Berlusconi faced a crushing defeat   after it became clear his billionaire who will  rescue the economy narrative was not working. Yet,   Berlusconi always came back. And even when he  himself did not, Italy is now again ruled by a   populist right-wing president. In fact, looking at  these graphs, we can see that the dynamic is often   the same. Once right-wing populism emerges, yes,  it often suffers crushing setbacks due to chaotic   infighting, no economic progress, and the exposure  of massive corruption, but it never really goes   away. So, right-wing populists may suffer  crushing defeats and often embarrassing ones,   but eventually they always bounce back, which  raises the question, why does populism always keep   bouncing back? Why is it not going away after all  of those broken promises? As always on Money and   Macro, we've emerged ourselves into the relevant  scientific literature and selected the four most   prevalent explanations. Narrative number one, it's  the economy stupid? Ordinary people have been left   behind. Narrative number two, right-wing populists  have a point. Mainstream politicians themselves   are the problem. They've become out of touch  on cultural issues like immigration. Narrative   number three, people have just become more racist/  authoritarian. And last but not least, narrative   number four, it's actually social media that's  to blame. That is pushing people to political   extremes. In this video, we examine the evidence  and counter evidence for each theory to determine   which of them has the most convincing explanation  for why right-wing populism keeps bouncing back.   But before solving the puzzle, we first need to  make sure we are all talking about the same thing.   That is, what is right-wing populism actually?  And how is it different from left-wing populism?   Aren't these polar opposites? Why are we talking  about them in the same breath? Well, yes and no.   This is something people often get wrong. Populism  is not at all like socialism or like conservatism.   It's not an ideology. It's a way of talking about  politics a lens through which political conflict   is framed. At its core, both left and right-wing  populism divides society into two opposing groups.   On the one hand, the hardworking people and on  the other, the corrupt elites. Populism is pretty   easy to understand. Essentially, all problems in  society are the fault of these corrupt elites. The   difference between left and right-wing populism  then is which elite group they frame as the   problem. On the left, populists target economic  elites such as rich and the corporations, the   brolicharchy of tremendous wealth, a government  of the billionaire class by the billionaire class.   On the other hand, right-wing populists target  a different kind of elite group, the cultural   elites, such as "The Brussels bureaucrats, the  Amercian bureaucrats, and the Soros network..."  but also academics or mainstream politicians  accused of ignoring ordinary people's concerns   about immigration, crime, and cultural identity.  Different enemies, same narrative. The system   has been captured by elites which no longer  represent the people and simple narratives   often come with simple solutions. So if you  believe that moneyed elites cause most problems,   you should vote left-wing populists into power  so that they can tax their wealth away. And   if you believe immigration is damaging  the economy and eroding local culture,   you should back leaders who are not afraid to defy  cultural elites and take massive actions to close   the borders. Especially the right-wing populist  story convinced a lot of people in the West in   the last couple of decades. But okay, back to the  present. Trump's remanufacturing America story is   failing. Brexit is not making Britain rich and  Orban just lost in a landslide. So why again do   we say right-wing populism will bounce back soon  enough? Well, let's start with the economic story   that should in theory empower left-wing populists.  But surprisingly in reality often empowers the   right. Narrative number one, people vote populist  because they are economically left behind. Okay,   this map shows GDP per capita per German state.  And this map shows where people mostly voted   for the right-wing populist party AFD. This is  not a coincidence. When we look at leaders like   Marine Le Pen and Viktor Orban, we see that they  often struggle to gain traction in thriving rich   urban centers, but they dominate the vote  in rural and declining areas. By now, it's   pretty well known that the hyper globalization  period from the late 1970s to early 2000s created   winners and losers. Chinese workers were  able to produce for the rest of the world,   massively improving their own living standards.  Meanwhile, in the west, highly educated people   in big cities in rich countries were also able to  export services to more and more people globally,   which translated into higher wages for them.  But take a look at this graph. The hourly wage   corrected for inflation for a US worker without  higher education is very similar today to what it   was in 1965. So while during the period of hyper  globalization the US economy kept growing only   the well-educated cultural and moneyed elites have  actually seen their purchasing power go up while   many ordinary people were indeed left behind.  It's not hard to see how this can translate   into politics. If you feel the system no longer  works for you and the same political elites keep   defending it. Of course you will start looking for  alternatives and that is exactly what we see in   the data. Regions more exposed to Chinese import  competition were more likely to support Brexit,   Trump, and the AFD in Germany. Areas more exposed  to automation tend to show stronger support for   populist parties. However, while this evidence  looks convincing, it has three big problems.   First, if we look at people in countries that  truly lost a lot of their income between 1985   and 2015, we would expect right-wing  populism to have surged in countries   like Spain and Portugal. But actually, relatively  fortunate and less unequal countries like Norway,   Finland, Switzerland, and Austria have  seen far bigger right-wing populist surges.   The second problem with the explanation is  once we move from regions to individuals,   the story weakens. As research by political  science professor Larry Bartles shows, economic   disaection turns out to be a poor predictor  of whether someone votes or identifies with   right-wing populism. It is far less informative  than attitudes towards immigration, trust in   political institutions, or broader cultural  values. In other words, yes, many people in left   behind areas vote for the populist right. But if  you want to actually predict whether someone will   support the populist right, you get much closer  by asking what they think about immigration or   whether they trust politicians than by asking them  about what they think about the economy. The third   problem is if populism is about regular working  folks wanting an equal share of the economic pie,   wouldn't it make sense to vote for populists  who want to redistribute wealth, so those on   the left? However, if we look at the data, we  see the opposite. It's especially right-wing   populism that is surging in the West as inequality  increased. So, could it be that people are fooled   by the populist right to vote against their own  interest? That's a story that we hear a lot and it   could be true but actually and it may shock some  of you hearing this from me in this case maybe   economics is not everything. So it's time for this  economist here to step outside of his comfort zone   with narrative number two. Right-wing populism  is actually about out of touch cultural elites.   Okay. The argument goes a little bit like this. No  voters are not confused. The real people who are   confused are the cultural elites. I really believe  that Westminster, the intellectuals, the liberal   elites just don't get it. Take a simple question.  Should immigrants adapt to the customs of the   country that they move to? Large majorities of  the public say yes. This holds all across Europe,   Britain, Denmark, Germany, and Sweden. But among  political elites, only those in Denmark agree with   that view. On the other hand, in Germany, all  politicians except for the populist right, and   yes, that even includes conservative politicians,  are more liberal on immigration than the average   voter? Or take the question, should race be taken  into account in college admissions? Only a third   of Americans agree with this view. Yet mainstream  Democrat leaders from Hillary Clinton to Joe Biden   have consistently supported raceconscious policies  and criticized court rulings against them. This   disconnect between what the public wants and  what politicians want on the other hand is what   political scientists call a representation  gap. As you can see here in this FT graph,   politicians and voters are roughly aligned when  it comes to economic issues like redistribution   and capitalism. Left-wing politicians are close  to leftwing voters and right-wing politicians   are close to right-wing voters. But when it  comes to topics like immigration and crime,   politicians are on average far more to the left  than the average voter. So when the political   debate is dominated by economic issues like  taxes and redistribution, well in those cases,   mainstream parties are relatively safe because  they champion what voters actually want. But   when cultural issues move to the center of the  debate, the dynamics change. If voters feel that   their basic cultural preferences are ignored  or even worse, dismissed or talked down upon,   that gap becomes a big opportunity for right-wing  populists to emerge. The clearest example of this   is the 2015 European refugee crisis. As images  of large numbers of asylum seekers and irregular   border crossings dominated the news, immigrations  shot up the list of public concerns. People did   not necessarily purely react to immigration  itself, but they did react strongly to the   perception of chaos and loss of control. And when  that perception takes hold and politicians are not   reacting to it, then right-wing populists gain a  big advantage. Research by James Denison and Andre   Fer Gues shows that as immigration becomes more  salient, support for populist right-wing parties   rises right along with it. Not perfectly, not  everywhere, but consistently enough to matter.   At the same time, as citizens, we're like, "Oh  my goodness, look at what's going on here. Our   societies are changing dramatically. We're in the  midst of this economic stagnation where, you know,   I feel like I have to compete for jobs. I have to  compete for public goods." And at the same time,   traditional establishment parties are inviting in  tons of immigrants, allowing huge asylum flows,   telling me that if I worry about this or I'm  concerned about this, I'm a racist or a xenophobe.   So, interestingly, when populist right-wingers say  that cultural elites like mainstream politicians   are out of touch, data shows us that they are  correct. Not when it comes to economics, but when   it comes to social issues like immigration and  crime. Yes, the general public is significantly to   the right of most politicians. But as we've seen,  there's only one exception. In Denmark, the Social   Democrats adopted stricter immigration policies  themselves, which coincided with a decline in   support for the populist right from over 20% to  just below 10%. But okay, that's still 10%. So,   there must be more going on. But this was still a  crucial story. In many leftwing circles, though,   the diagnosis is very different. The problem they  argue goes far beyond out of touch elites. No,   it points to the people. Narrative number  three, people are simply becoming more   racist. And honestly, this is not super popular in  academic circles. This explanation, it's actually   an argument that I often hear from friends, so  I thought it was important to address it here.   Nonetheless, many of them watch extreme takes  from populist right-wingers and their supporters.   They scroll through online comment sections and  come away thinking something genuinely dark is   happening. People are becoming evil. People are  stigmatizing entire Muslim communities as violent.   Politicians are showing authoritarian tendencies.  There are conspiracies about Brussels bureaucrates   or George Soros erasing Western civilization. It  can feel like people are forgetting the lessons   of the past, growing tired of democracy and  becoming more xenophobic and conspiratorial. But   is it actually true? Are people really becoming  less satisfied with democracy and more hostile to   immigrants? Well, according to political scientist  Larry Bartles, the answer to that question is   clear. No. Absolutely not. Based on survey  responses from more than 300,000 Europeans, he   finds that they have not become significantly more  illiberal or more hostile to immigration over the   past two decades. In fact, support for European  integration has remained fairly stable throughout   the 21st century. Level of trust in parliament and  politicians, satisfaction with democracy and even   attitudes towards immigration. They have remained  broadly stable over time and have even improved a   little. Of course, there are some exceptions. For  example, Spanish citizens became much more hostile   to democracy after the massive economic crisis  in 2008. However, satisfaction with democracy   has been rising in Finland, Sweden, and Denmark  at a time when the populist right became a major   player in those countries. So overall, no, it does  not appear that people are becoming more racist or   authoritarian, but I do understand why more and  more people feel this way. The YouTube shorts   algorithm sometimes recommends me these nice  videos of how US presidents used to interact with   one each other. I think Mr. Nixon is an effective  leader of his party. The question before us is   which point of view and which party do we want to  leave the United States? I agree with Senator K.   And if we compare that to some of the stuff that  Trump says these days, sleepy, crooked Joe Biden,   where I could stand in the middle of Fifth Avenue  and shoot somebody and I wouldn't lose any voters.   Okay, it's like incredible. Then it's clear that  something has changed. The public is willing   to accept far more uncivilized language. And  actually, this is not just an American phenomena.   Right-wing populist leaders everywhere use  increasingly inflammatory language. So why   does the public increasingly accept that type of  behavior if they themselves did not become more   authoritarian? Well, this brings us to narrative  number four. Blame social media. Social media is   polarizing us. And there's really good evidence  that this is actually happening in two ways.   First, as you can see here, traditional media like  newspapers and radio, well, they gave a voice to   everyone, the hard left, the moderates, and the  hard right. However, as you can see here, cable   TV is already quite a bit more biased towards  both extremes. And on social media, well, oh boy,   the algorithms really love to serve us both hard  left and hard right content, while the moderate,   nuanced, more boring voices are buried in the  algorithms. To explain this, psychologist J.   Vanbo describes four dark laws that drive online  engagement. Negativity, extremism, us versus   them thinking, and moral emotional language. In  other words, content that is more negative, more   extreme, more tribal, and more emotionally charged  is more likely to grab attention and spread. This   means that expressing outrage, attacking the other  side, or using words like disgusting or unjust   or just super simple narratives will consistently  outperform more balanced or nuanced views. So, if   you are on social media a lot, it makes sense that  you will start believing that people are angrier,   more polarized, and more extreme than that they  actually are. But it gets worse. The second way   that social media is polarizing us other than  amplifying extreme voices is by connecting extreme   voices. You see, views that were once socially  taboo like I could have done things to her that   would have made your head spin used to remain on  the fringes. But nowadays, people holding these   views can find each other instantly. When they  realize that they're not alone, then they become   more confident to express those views in public.  So the internet did not necessarily create these   attitudes, but it did make them more visible, more  organized, and more politically relevant. And this   can explain why many of my friends that spend a  lot of time online feel that people on average   have become more extreme, even though research  shows us that they did not. However, again,   this is not the full story. You see, cable TV and  social media spread pretty evenly worldwide. Yet,   right-wing populism patterns vary drastically  across countries. Not every country has ended   up with Americanstyle media polarization.  So this brings us to our conclusion. Which   narrative is the most convincing? Well, one  thing it's clear, it's not narrative number   three. People are not becoming more racist  or authoritarian over time. Anti-democratic   and anti-immigration sentiment did not just  appear out of nowhere in the last decades.   There's always been a slice of a population that  feels this way, which means there's always been   some baseline demand for right-wing populism.  But for the other narratives, given that country   trajectories are so different, the different  right-wing populist surges can probably best   be explained by combining these three other  narratives. First, there was rising inequality,   austerity, the fallout from the financial crisis.  All of that shook people's trust in institutions.   This could explain populist surges in the American  Midwest or Eastern Europe. On the other hand,   populist surges in relatively equal countries like  Norway and Denmark probably have more to do with   a political disconnect on cultural issues. And  finally, the rise of social media and cable TV   probably acted like an amplifier, giving populist  parties that represent 10 to 30% of the population   the power to take over several countries. So yeah,  all of these three explanations are supported by   the evidence. On their own though, there are  too many contradictions to believe them. But   taken together, it becomes clear that right-wing  populism will likely surge back again and again   as long as inequality remains high. Politicians  do not listen to voter preferences on culture and   immigration. And number three, as long as social  media gives populist an algorithmic edge. But   yeah, that's my take. What do you think? Let me  know in the comments below. And if you find this   topic as fascinating as I do, I highly recommend  that you check out the excellent analysis by our   advertising sponsor, The Economists, which I  always check out for the research process of   my videos. For this episode in particular,  I learned a lot from their analysis on how   the Danish social democrats have shifted  right on immigration to counter the far   right. Or if you also care about macroeconomic  stability, I encourage you to take a look at   this article where they explore how efforts  to be fiscally responsible and reduce budget   deficits can sometimes end up benefiting populist  parties. And finally, for a broader overview, I'd   strongly strongly recommend this article on what  populism actually means. As these examples show,   The Economist delivers insights that help you  see the bigger picture and think for yourself.   This is why I almost always rely on their analysis  for my research and it's why I highly recommend   that you subscribe and that's actually now  more interesting than ever given that they   are offering a special 35% discount for money and  macro viewers. Now, whether you prefer their daily   journalism in the Economist app, or you are like  me and enjoy catching up on the global economy   over the weekend with a nice cup of coffee and the  print edition, you'll always stay on top of the   latest global developments and support journalism  that values factual information, integrity, and   an independent point of view. So, don't miss out.  Click the link in the description or top comment   below or head over to ecomus.com/moneymackro  to claim your exclusive 35% discount today.

The populist surge in the west is over. This is the  end. Or is it? Actually, the experience of early   adopter populist countries shows us that this  is extremely unlikely. For example, in Austria,   populism collapsed in the early 2000s after Jörg  Haider's freedom party government turned out to   be a chaotic mess. But once again, although not  in power, the Austrian Freedom Party got the most   votes in the last election. Similarly, in Italy,  the populist Berlusconi faced a crushing defeat   after it became clear his billionaire who will  rescue the economy narrative was not working. Yet,   Berlusconi always came back. And even when he  himself did not, Italy is now again ruled by a   populist right-wing president. In fact, looking at  these graphs, we can see that the dynamic is often   the same. Once right-wing populism emerges, yes,  it often suffers crushing setbacks due to chaotic   infighting, no economic progress, and the exposure  of massive corruption, but it never really goes   away. So, right-wing populists may suffer  crushing defeats and often embarrassing ones,   but eventually they always bounce back, which  raises the question, why does populism always keep   bouncing back? Why is it not going away after all  of those broken promises? As always on Money and   Macro, we've emerged ourselves into the relevant  scientific literature and selected the four most   prevalent explanations. Narrative number one, it's  the economy stupid? Ordinary people have been left   behind. Narrative number two, right-wing populists  have a point. Mainstream politicians themselves   are the problem. They've become out of touch  on cultural issues like immigration. Narrative   number three, people have just become more racist/  authoritarian. And last but not least, narrative   number four, it's actually social media that's  to blame. That is pushing people to political   extremes. In this video, we examine the evidence  and counter evidence for each theory to determine   which of them has the most convincing explanation  for why right-wing populism keeps bouncing back.   But before solving the puzzle, we first need to  make sure we are all talking about the same thing.   That is, what is right-wing populism actually?  And how is it different from left-wing populism?   Aren't these polar opposites? Why are we talking  about them in the same breath? Well, yes and no.   This is something people often get wrong. Populism  is not at all like socialism or like conservatism.   It's not an ideology. It's a way of talking about  politics a lens through which political conflict   is framed. At its core, both left and right-wing  populism divides society into two opposing groups.   On the one hand, the hardworking people and on  the other, the corrupt elites. Populism is pretty   easy to understand. Essentially, all problems in  society are the fault of these corrupt elites. The   difference between left and right-wing populism  then is which elite group they frame as the   problem. On the left, populists target economic  elites such as rich and the corporations, the   brolicharchy of tremendous wealth, a government  of the billionaire class by the billionaire class.   On the other hand, right-wing populists target  a different kind of elite group, the cultural   elites, such as "The Brussels bureaucrats, the  Amercian bureaucrats, and the Soros network..."  but also academics or mainstream politicians  accused of ignoring ordinary people's concerns   about immigration, crime, and cultural identity.  Different enemies, same narrative. The system   has been captured by elites which no longer  represent the people and simple narratives   often come with simple solutions. So if you  believe that moneyed elites cause most problems,   you should vote left-wing populists into power  so that they can tax their wealth away. And   if you believe immigration is damaging  the economy and eroding local culture,   you should back leaders who are not afraid to defy  cultural elites and take massive actions to close   the borders. Especially the right-wing populist  story convinced a lot of people in the West in   the last couple of decades. But okay, back to the  present. Trump's remanufacturing America story is   failing. Brexit is not making Britain rich and  Orban just lost in a landslide. So why again do   we say right-wing populism will bounce back soon  enough? Well, let's start with the economic story   that should in theory empower left-wing populists.  But surprisingly in reality often empowers the   right. Narrative number one, people vote populist  because they are economically left behind. Okay,   this map shows GDP per capita per German state.  And this map shows where people mostly voted   for the right-wing populist party AFD. This is  not a coincidence. When we look at leaders like   Marine Le Pen and Viktor Orban, we see that they  often struggle to gain traction in thriving rich   urban centers, but they dominate the vote  in rural and declining areas. By now, it's   pretty well known that the hyper globalization  period from the late 1970s to early 2000s created   winners and losers. Chinese workers were  able to produce for the rest of the world,   massively improving their own living standards.  Meanwhile, in the west, highly educated people   in big cities in rich countries were also able to  export services to more and more people globally,   which translated into higher wages for them.  But take a look at this graph. The hourly wage   corrected for inflation for a US worker without  higher education is very similar today to what it   was in 1965. So while during the period of hyper  globalization the US economy kept growing only   the well-educated cultural and moneyed elites have  actually seen their purchasing power go up while   many ordinary people were indeed left behind.  It's not hard to see how this can translate   into politics. If you feel the system no longer  works for you and the same political elites keep   defending it. Of course you will start looking for  alternatives and that is exactly what we see in   the data. Regions more exposed to Chinese import  competition were more likely to support Brexit,   Trump, and the AFD in Germany. Areas more exposed  to automation tend to show stronger support for   populist parties. However, while this evidence  looks convincing, it has three big problems.   First, if we look at people in countries that  truly lost a lot of their income between 1985   and 2015, we would expect right-wing  populism to have surged in countries   like Spain and Portugal. But actually, relatively  fortunate and less unequal countries like Norway,   Finland, Switzerland, and Austria have  seen far bigger right-wing populist surges.   The second problem with the explanation is  once we move from regions to individuals,   the story weakens. As research by political  science professor Larry Bartles shows, economic   disaection turns out to be a poor predictor  of whether someone votes or identifies with   right-wing populism. It is far less informative  than attitudes towards immigration, trust in   political institutions, or broader cultural  values. In other words, yes, many people in left   behind areas vote for the populist right. But if  you want to actually predict whether someone will   support the populist right, you get much closer  by asking what they think about immigration or   whether they trust politicians than by asking them  about what they think about the economy. The third   problem is if populism is about regular working  folks wanting an equal share of the economic pie,   wouldn't it make sense to vote for populists  who want to redistribute wealth, so those on   the left? However, if we look at the data, we  see the opposite. It's especially right-wing   populism that is surging in the West as inequality  increased. So, could it be that people are fooled   by the populist right to vote against their own  interest? That's a story that we hear a lot and it   could be true but actually and it may shock some  of you hearing this from me in this case maybe   economics is not everything. So it's time for this  economist here to step outside of his comfort zone   with narrative number two. Right-wing populism  is actually about out of touch cultural elites.   Okay. The argument goes a little bit like this. No  voters are not confused. The real people who are   confused are the cultural elites. I really believe  that Westminster, the intellectuals, the liberal   elites just don't get it. Take a simple question.  Should immigrants adapt to the customs of the   country that they move to? Large majorities of  the public say yes. This holds all across Europe,   Britain, Denmark, Germany, and Sweden. But among  political elites, only those in Denmark agree with   that view. On the other hand, in Germany, all  politicians except for the populist right, and   yes, that even includes conservative politicians,  are more liberal on immigration than the average   voter? Or take the question, should race be taken  into account in college admissions? Only a third   of Americans agree with this view. Yet mainstream  Democrat leaders from Hillary Clinton to Joe Biden   have consistently supported raceconscious policies  and criticized court rulings against them. This   disconnect between what the public wants and  what politicians want on the other hand is what   political scientists call a representation  gap. As you can see here in this FT graph,   politicians and voters are roughly aligned when  it comes to economic issues like redistribution   and capitalism. Left-wing politicians are close  to leftwing voters and right-wing politicians   are close to right-wing voters. But when it  comes to topics like immigration and crime,   politicians are on average far more to the left  than the average voter. So when the political   debate is dominated by economic issues like  taxes and redistribution, well in those cases,   mainstream parties are relatively safe because  they champion what voters actually want. But   when cultural issues move to the center of the  debate, the dynamics change. If voters feel that   their basic cultural preferences are ignored  or even worse, dismissed or talked down upon,   that gap becomes a big opportunity for right-wing  populists to emerge. The clearest example of this   is the 2015 European refugee crisis. As images  of large numbers of asylum seekers and irregular   border crossings dominated the news, immigrations  shot up the list of public concerns. People did   not necessarily purely react to immigration  itself, but they did react strongly to the   perception of chaos and loss of control. And when  that perception takes hold and politicians are not   reacting to it, then right-wing populists gain a  big advantage. Research by James Denison and Andre   Fer Gues shows that as immigration becomes more  salient, support for populist right-wing parties   rises right along with it. Not perfectly, not  everywhere, but consistently enough to matter.   At the same time, as citizens, we're like, "Oh  my goodness, look at what's going on here. Our   societies are changing dramatically. We're in the  midst of this economic stagnation where, you know,   I feel like I have to compete for jobs. I have to  compete for public goods." And at the same time,   traditional establishment parties are inviting in  tons of immigrants, allowing huge asylum flows,   telling me that if I worry about this or I'm  concerned about this, I'm a racist or a xenophobe.   So, interestingly, when populist right-wingers say  that cultural elites like mainstream politicians   are out of touch, data shows us that they are  correct. Not when it comes to economics, but when   it comes to social issues like immigration and  crime. Yes, the general public is significantly to   the right of most politicians. But as we've seen,  there's only one exception. In Denmark, the Social   Democrats adopted stricter immigration policies  themselves, which coincided with a decline in   support for the populist right from over 20% to  just below 10%. But okay, that's still 10%. So,   there must be more going on. But this was still a  crucial story. In many leftwing circles, though,   the diagnosis is very different. The problem they  argue goes far beyond out of touch elites. No,   it points to the people. Narrative number  three, people are simply becoming more   racist. And honestly, this is not super popular in  academic circles. This explanation, it's actually   an argument that I often hear from friends, so  I thought it was important to address it here.   Nonetheless, many of them watch extreme takes  from populist right-wingers and their supporters.   They scroll through online comment sections and  come away thinking something genuinely dark is   happening. People are becoming evil. People are  stigmatizing entire Muslim communities as violent.   Politicians are showing authoritarian tendencies.  There are conspiracies about Brussels bureaucrates   or George Soros erasing Western civilization. It  can feel like people are forgetting the lessons   of the past, growing tired of democracy and  becoming more xenophobic and conspiratorial. But   is it actually true? Are people really becoming  less satisfied with democracy and more hostile to   immigrants? Well, according to political scientist  Larry Bartles, the answer to that question is   clear. No. Absolutely not. Based on survey  responses from more than 300,000 Europeans, he   finds that they have not become significantly more  illiberal or more hostile to immigration over the   past two decades. In fact, support for European  integration has remained fairly stable throughout   the 21st century. Level of trust in parliament and  politicians, satisfaction with democracy and even   attitudes towards immigration. They have remained  broadly stable over time and have even improved a   little. Of course, there are some exceptions. For  example, Spanish citizens became much more hostile   to democracy after the massive economic crisis  in 2008. However, satisfaction with democracy   has been rising in Finland, Sweden, and Denmark  at a time when the populist right became a major   player in those countries. So overall, no, it does  not appear that people are becoming more racist or   authoritarian, but I do understand why more and  more people feel this way. The YouTube shorts   algorithm sometimes recommends me these nice  videos of how US presidents used to interact with   one each other. I think Mr. Nixon is an effective  leader of his party. The question before us is   which point of view and which party do we want to  leave the United States? I agree with Senator K.   And if we compare that to some of the stuff that  Trump says these days, sleepy, crooked Joe Biden,   where I could stand in the middle of Fifth Avenue  and shoot somebody and I wouldn't lose any voters.   Okay, it's like incredible. Then it's clear that  something has changed. The public is willing   to accept far more uncivilized language. And  actually, this is not just an American phenomena.   Right-wing populist leaders everywhere use  increasingly inflammatory language. So why   does the public increasingly accept that type of  behavior if they themselves did not become more   authoritarian? Well, this brings us to narrative  number four. Blame social media. Social media is   polarizing us. And there's really good evidence  that this is actually happening in two ways.   First, as you can see here, traditional media like  newspapers and radio, well, they gave a voice to   everyone, the hard left, the moderates, and the  hard right. However, as you can see here, cable   TV is already quite a bit more biased towards  both extremes. And on social media, well, oh boy,   the algorithms really love to serve us both hard  left and hard right content, while the moderate,   nuanced, more boring voices are buried in the  algorithms. To explain this, psychologist J.   Vanbo describes four dark laws that drive online  engagement. Negativity, extremism, us versus   them thinking, and moral emotional language. In  other words, content that is more negative, more   extreme, more tribal, and more emotionally charged  is more likely to grab attention and spread. This   means that expressing outrage, attacking the other  side, or using words like disgusting or unjust   or just super simple narratives will consistently  outperform more balanced or nuanced views. So, if   you are on social media a lot, it makes sense that  you will start believing that people are angrier,   more polarized, and more extreme than that they  actually are. But it gets worse. The second way   that social media is polarizing us other than  amplifying extreme voices is by connecting extreme   voices. You see, views that were once socially  taboo like I could have done things to her that   would have made your head spin used to remain on  the fringes. But nowadays, people holding these   views can find each other instantly. When they  realize that they're not alone, then they become   more confident to express those views in public.  So the internet did not necessarily create these   attitudes, but it did make them more visible, more  organized, and more politically relevant. And this   can explain why many of my friends that spend a  lot of time online feel that people on average   have become more extreme, even though research  shows us that they did not. However, again,   this is not the full story. You see, cable TV and  social media spread pretty evenly worldwide. Yet,   right-wing populism patterns vary drastically  across countries. Not every country has ended   up with Americanstyle media polarization.  So this brings us to our conclusion. Which   narrative is the most convincing? Well, one  thing it's clear, it's not narrative number   three. People are not becoming more racist  or authoritarian over time. Anti-democratic   and anti-immigration sentiment did not just  appear out of nowhere in the last decades.   There's always been a slice of a population that  feels this way, which means there's always been   some baseline demand for right-wing populism.  But for the other narratives, given that country   trajectories are so different, the different  right-wing populist surges can probably best   be explained by combining these three other  narratives. First, there was rising inequality,   austerity, the fallout from the financial crisis.  All of that shook people's trust in institutions.   This could explain populist surges in the American  Midwest or Eastern Europe. On the other hand,   populist surges in relatively equal countries like  Norway and Denmark probably have more to do with   a political disconnect on cultural issues. And  finally, the rise of social media and cable TV   probably acted like an amplifier, giving populist  parties that represent 10 to 30% of the population   the power to take over several countries. So yeah,  all of these three explanations are supported by   the evidence. On their own though, there are  too many contradictions to believe them. But   taken together, it becomes clear that right-wing  populism will likely surge back again and again   as long as inequality remains high. Politicians  do not listen to voter preferences on culture and   immigration. And number three, as long as social  media gives populist an algorithmic edge. But   yeah, that's my take. What do you think? Let me  know in the comments below. And if you find this   topic as fascinating as I do, I highly recommend  that you check out the excellent analysis by our   advertising sponsor, The Economists, which I  always check out for the research process of   my videos. For this episode in particular,  I learned a lot from their analysis on how   the Danish social democrats have shifted  right on immigration to counter the far   right. Or if you also care about macroeconomic  stability, I encourage you to take a look at   this article where they explore how efforts  to be fiscally responsible and reduce budget   deficits can sometimes end up benefiting populist  parties. And finally, for a broader overview, I'd   strongly strongly recommend this article on what  populism actually means. As these examples show,   The Economist delivers insights that help you  see the bigger picture and think for yourself.   This is why I almost always rely on their analysis  for my research and it's why I highly recommend   that you subscribe and that's actually now  more interesting than ever given that they   are offering a special 35% discount for money and  macro viewers. Now, whether you prefer their daily   journalism in the Economist app, or you are like  me and enjoy catching up on the global economy   over the weekend with a nice cup of coffee and the  print edition, you'll always stay on top of the   latest global developments and support journalism  that values factual information, integrity, and   an independent point of view. So, don't miss out.  Click the link in the description or top comment   below or head over to ecomus.com/moneymackro  to claim your exclusive 35% discount today.

The populist surge in the west is over. This is the  end. Or is it? Actually, the experience of early   adopter populist countries shows us that this  is extremely unlikely. For example, in Austria,   populism collapsed in the early 2000s after Jörg  Haider's freedom party government turned out to   be a chaotic mess. But once again, although not  in power, the Austrian Freedom Party got the most   votes in the last election. Similarly, in Italy,  the populist Berlusconi faced a crushing defeat   after it became clear his billionaire who will  rescue the economy narrative was not working. Yet,   Berlusconi always came back. And even when he  himself did not, Italy is now again ruled by a   populist right-wing president. In fact, looking at  these graphs, we can see that the dynamic is often   the same. Once right-wing populism emerges, yes,  it often suffers crushing setbacks due to chaotic   infighting, no economic progress, and the exposure  of massive corruption, but it never really goes   away. So, right-wing populists may suffer  crushing defeats and often embarrassing ones,   but eventually they always bounce back, which  raises the question, why does populism always keep   bouncing back? Why is it not going away after all  of those broken promises? As always on Money and   Macro, we've emerged ourselves into the relevant  scientific literature and selected the four most   prevalent explanations. Narrative number one, it's  the economy stupid? Ordinary people have been left   behind. Narrative number two, right-wing populists  have a point. Mainstream politicians themselves   are the problem. They've become out of touch  on cultural issues like immigration. Narrative   number three, people have just become more racist/  authoritarian. And last but not least, narrative   number four, it's actually social media that's  to blame. That is pushing people to political   extremes. In this video, we examine the evidence  and counter evidence for each theory to determine   which of them has the most convincing explanation  for why right-wing populism keeps bouncing back.   But before solving the puzzle, we first need to  make sure we are all talking about the same thing.   That is, what is right-wing populism actually?  And how is it different from left-wing populism?   Aren't these polar opposites? Why are we talking  about them in the same breath? Well, yes and no.   This is something people often get wrong. Populism  is not at all like socialism or like conservatism.   It's not an ideology. It's a way of talking about  politics a lens through which political conflict   is framed. At its core, both left and right-wing  populism divides society into two opposing groups.   On the one hand, the hardworking people and on  the other, the corrupt elites. Populism is pretty   easy to understand. Essentially, all problems in  society are the fault of these corrupt elites. The   difference between left and right-wing populism  then is which elite group they frame as the   problem. On the left, populists target economic  elites such as rich and the corporations, the   brolicharchy of tremendous wealth, a government  of the billionaire class by the billionaire class.   On the other hand, right-wing populists target  a different kind of elite group, the cultural   elites, such as "The Brussels bureaucrats, the  Amercian bureaucrats, and the Soros network..."  but also academics or mainstream politicians  accused of ignoring ordinary people's concerns   about immigration, crime, and cultural identity.  Different enemies, same narrative. The system   has been captured by elites which no longer  represent the people and simple narratives   often come with simple solutions. So if you  believe that moneyed elites cause most problems,   you should vote left-wing populists into power  so that they can tax their wealth away. And   if you believe immigration is damaging  the economy and eroding local culture,   you should back leaders who are not afraid to defy  cultural elites and take massive actions to close   the borders. Especially the right-wing populist  story convinced a lot of people in the West in   the last couple of decades. But okay, back to the  present. Trump's remanufacturing America story is   failing. Brexit is not making Britain rich and  Orban just lost in a landslide. So why again do   we say right-wing populism will bounce back soon  enough? Well, let's start with the economic story   that should in theory empower left-wing populists.  But surprisingly in reality often empowers the   right. Narrative number one, people vote populist  because they are economically left behind. Okay,   this map shows GDP per capita per German state.  And this map shows where people mostly voted   for the right-wing populist party AFD. This is  not a coincidence. When we look at leaders like   Marine Le Pen and Viktor Orban, we see that they  often struggle to gain traction in thriving rich   urban centers, but they dominate the vote  in rural and declining areas. By now, it's   pretty well known that the hyper globalization  period from the late 1970s to early 2000s created   winners and losers. Chinese workers were  able to produce for the rest of the world,   massively improving their own living standards.  Meanwhile, in the west, highly educated people   in big cities in rich countries were also able to  export services to more and more people globally,   which translated into higher wages for them.  But take a look at this graph. The hourly wage   corrected for inflation for a US worker without  higher education is very similar today to what it   was in 1965. So while during the period of hyper  globalization the US economy kept growing only   the well-educated cultural and moneyed elites have  actually seen their purchasing power go up while   many ordinary people were indeed left behind.  It's not hard to see how this can translate   into politics. If you feel the system no longer  works for you and the same political elites keep   defending it. Of course you will start looking for  alternatives and that is exactly what we see in   the data. Regions more exposed to Chinese import  competition were more likely to support Brexit,   Trump, and the AFD in Germany. Areas more exposed  to automation tend to show stronger support for   populist parties. However, while this evidence  looks convincing, it has three big problems.   First, if we look at people in countries that  truly lost a lot of their income between 1985   and 2015, we would expect right-wing  populism to have surged in countries   like Spain and Portugal. But actually, relatively  fortunate and less unequal countries like Norway,   Finland, Switzerland, and Austria have  seen far bigger right-wing populist surges.   The second problem with the explanation is  once we move from regions to individuals,   the story weakens. As research by political  science professor Larry Bartles shows, economic   disaection turns out to be a poor predictor  of whether someone votes or identifies with   right-wing populism. It is far less informative  than attitudes towards immigration, trust in   political institutions, or broader cultural  values. In other words, yes, many people in left   behind areas vote for the populist right. But if  you want to actually predict whether someone will   support the populist right, you get much closer  by asking what they think about immigration or   whether they trust politicians than by asking them  about what they think about the economy. The third   problem is if populism is about regular working  folks wanting an equal share of the economic pie,   wouldn't it make sense to vote for populists  who want to redistribute wealth, so those on   the left? However, if we look at the data, we  see the opposite. It's especially right-wing   populism that is surging in the West as inequality  increased. So, could it be that people are fooled   by the populist right to vote against their own  interest? That's a story that we hear a lot and it   could be true but actually and it may shock some  of you hearing this from me in this case maybe   economics is not everything. So it's time for this  economist here to step outside of his comfort zone   with narrative number two. Right-wing populism  is actually about out of touch cultural elites.   Okay. The argument goes a little bit like this. No  voters are not confused. The real people who are   confused are the cultural elites. I really believe  that Westminster, the intellectuals, the liberal   elites just don't get it. Take a simple question.  Should immigrants adapt to the customs of the   country that they move to? Large majorities of  the public say yes. This holds all across Europe,   Britain, Denmark, Germany, and Sweden. But among  political elites, only those in Denmark agree with   that view. On the other hand, in Germany, all  politicians except for the populist right, and   yes, that even includes conservative politicians,  are more liberal on immigration than the average   voter? Or take the question, should race be taken  into account in college admissions? Only a third   of Americans agree with this view. Yet mainstream  Democrat leaders from Hillary Clinton to Joe Biden   have consistently supported raceconscious policies  and criticized court rulings against them. This   disconnect between what the public wants and  what politicians want on the other hand is what   political scientists call a representation  gap. As you can see here in this FT graph,   politicians and voters are roughly aligned when  it comes to economic issues like redistribution   and capitalism. Left-wing politicians are close  to leftwing voters and right-wing politicians   are close to right-wing voters. But when it  comes to topics like immigration and crime,   politicians are on average far more to the left  than the average voter. So when the political   debate is dominated by economic issues like  taxes and redistribution, well in those cases,   mainstream parties are relatively safe because  they champion what voters actually want. But   when cultural issues move to the center of the  debate, the dynamics change. If voters feel that   their basic cultural preferences are ignored  or even worse, dismissed or talked down upon,   that gap becomes a big opportunity for right-wing  populists to emerge. The clearest example of this   is the 2015 European refugee crisis. As images  of large numbers of asylum seekers and irregular   border crossings dominated the news, immigrations  shot up the list of public concerns. People did   not necessarily purely react to immigration  itself, but they did react strongly to the   perception of chaos and loss of control. And when  that perception takes hold and politicians are not   reacting to it, then right-wing populists gain a  big advantage. Research by James Denison and Andre   Fer Gues shows that as immigration becomes more  salient, support for populist right-wing parties   rises right along with it. Not perfectly, not  everywhere, but consistently enough to matter.   At the same time, as citizens, we're like, "Oh  my goodness, look at what's going on here. Our   societies are changing dramatically. We're in the  midst of this economic stagnation where, you know,   I feel like I have to compete for jobs. I have to  compete for public goods." And at the same time,   traditional establishment parties are inviting in  tons of immigrants, allowing huge asylum flows,   telling me that if I worry about this or I'm  concerned about this, I'm a racist or a xenophobe.   So, interestingly, when populist right-wingers say  that cultural elites like mainstream politicians   are out of touch, data shows us that they are  correct. Not when it comes to economics, but when   it comes to social issues like immigration and  crime. Yes, the general public is significantly to   the right of most politicians. But as we've seen,  there's only one exception. In Denmark, the Social   Democrats adopted stricter immigration policies  themselves, which coincided with a decline in   support for the populist right from over 20% to  just below 10%. But okay, that's still 10%. So,   there must be more going on. But this was still a  crucial story. In many leftwing circles, though,   the diagnosis is very different. The problem they  argue goes far beyond out of touch elites. No,   it points to the people. Narrative number  three, people are simply becoming more   racist. And honestly, this is not super popular in  academic circles. This explanation, it's actually   an argument that I often hear from friends, so  I thought it was important to address it here.   Nonetheless, many of them watch extreme takes  from populist right-wingers and their supporters.   They scroll through online comment sections and  come away thinking something genuinely dark is   happening. People are becoming evil. People are  stigmatizing entire Muslim communities as violent.   Politicians are showing authoritarian tendencies.  There are conspiracies about Brussels bureaucrates   or George Soros erasing Western civilization. It  can feel like people are forgetting the lessons   of the past, growing tired of democracy and  becoming more xenophobic and conspiratorial. But   is it actually true? Are people really becoming  less satisfied with democracy and more hostile to   immigrants? Well, according to political scientist  Larry Bartles, the answer to that question is   clear. No. Absolutely not. Based on survey  responses from more than 300,000 Europeans, he   finds that they have not become significantly more  illiberal or more hostile to immigration over the   past two decades. In fact, support for European  integration has remained fairly stable throughout   the 21st century. Level of trust in parliament and  politicians, satisfaction with democracy and even   attitudes towards immigration. They have remained  broadly stable over time and have even improved a   little. Of course, there are some exceptions. For  example, Spanish citizens became much more hostile   to democracy after the massive economic crisis  in 2008. However, satisfaction with democracy   has been rising in Finland, Sweden, and Denmark  at a time when the populist right became a major   player in those countries. So overall, no, it does  not appear that people are becoming more racist or   authoritarian, but I do understand why more and  more people feel this way. The YouTube shorts   algorithm sometimes recommends me these nice  videos of how US presidents used to interact with   one each other. I think Mr. Nixon is an effective  leader of his party. The question before us is   which point of view and which party do we want to  leave the United States? I agree with Senator K.   And if we compare that to some of the stuff that  Trump says these days, sleepy, crooked Joe Biden,   where I could stand in the middle of Fifth Avenue  and shoot somebody and I wouldn't lose any voters.   Okay, it's like incredible. Then it's clear that  something has changed. The public is willing   to accept far more uncivilized language. And  actually, this is not just an American phenomena.   Right-wing populist leaders everywhere use  increasingly inflammatory language. So why   does the public increasingly accept that type of  behavior if they themselves did not become more   authoritarian? Well, this brings us to narrative  number four. Blame social media. Social media is   polarizing us. And there's really good evidence  that this is actually happening in two ways.   First, as you can see here, traditional media like  newspapers and radio, well, they gave a voice to   everyone, the hard left, the moderates, and the  hard right. However, as you can see here, cable   TV is already quite a bit more biased towards  both extremes. And on social media, well, oh boy,   the algorithms really love to serve us both hard  left and hard right content, while the moderate,   nuanced, more boring voices are buried in the  algorithms. To explain this, psychologist J.   Vanbo describes four dark laws that drive online  engagement. Negativity, extremism, us versus   them thinking, and moral emotional language. In  other words, content that is more negative, more   extreme, more tribal, and more emotionally charged  is more likely to grab attention and spread. This   means that expressing outrage, attacking the other  side, or using words like disgusting or unjust   or just super simple narratives will consistently  outperform more balanced or nuanced views. So, if   you are on social media a lot, it makes sense that  you will start believing that people are angrier,   more polarized, and more extreme than that they  actually are. But it gets worse. The second way   that social media is polarizing us other than  amplifying extreme voices is by connecting extreme   voices. You see, views that were once socially  taboo like I could have done things to her that   would have made your head spin used to remain on  the fringes. But nowadays, people holding these   views can find each other instantly. When they  realize that they're not alone, then they become   more confident to express those views in public.  So the internet did not necessarily create these   attitudes, but it did make them more visible, more  organized, and more politically relevant. And this   can explain why many of my friends that spend a  lot of time online feel that people on average   have become more extreme, even though research  shows us that they did not. However, again,   this is not the full story. You see, cable TV and  social media spread pretty evenly worldwide. Yet,   right-wing populism patterns vary drastically  across countries. Not every country has ended   up with Americanstyle media polarization.  So this brings us to our conclusion. Which   narrative is the most convincing? Well, one  thing it's clear, it's not narrative number   three. People are not becoming more racist  or authoritarian over time. Anti-democratic   and anti-immigration sentiment did not just  appear out of nowhere in the last decades.   There's always been a slice of a population that  feels this way, which means there's always been   some baseline demand for right-wing populism.  But for the other narratives, given that country   trajectories are so different, the different  right-wing populist surges can probably best   be explained by combining these three other  narratives. First, there was rising inequality,   austerity, the fallout from the financial crisis.  All of that shook people's trust in institutions.   This could explain populist surges in the American  Midwest or Eastern Europe. On the other hand,   populist surges in relatively equal countries like  Norway and Denmark probably have more to do with   a political disconnect on cultural issues. And  finally, the rise of social media and cable TV   probably acted like an amplifier, giving populist  parties that represent 10 to 30% of the population   the power to take over several countries. So yeah,  all of these three explanations are supported by   the evidence. On their own though, there are  too many contradictions to believe them. But   taken together, it becomes clear that right-wing  populism will likely surge back again and again   as long as inequality remains high. Politicians  do not listen to voter preferences on culture and   immigration. And number three, as long as social  media gives populist an algorithmic edge. But   yeah, that's my take. What do you think? Let me  know in the comments below. And if you find this   topic as fascinating as I do, I highly recommend  that you check out the excellent analysis by our   advertising sponsor, The Economists, which I  always check out for the research process of   my videos. For this episode in particular,  I learned a lot from their analysis on how   the Danish social democrats have shifted  right on immigration to counter the far   right. Or if you also care about macroeconomic  stability, I encourage you to take a look at   this article where they explore how efforts  to be fiscally responsible and reduce budget   deficits can sometimes end up benefiting populist  parties. And finally, for a broader overview, I'd   strongly strongly recommend this article on what  populism actually means. As these examples show,   The Economist delivers insights that help you  see the bigger picture and think for yourself.   This is why I almost always rely on their analysis  for my research and it's why I highly recommend   that you subscribe and that's actually now  more interesting than ever given that they   are offering a special 35% discount for money and  macro viewers. Now, whether you prefer their daily   journalism in the Economist app, or you are like  me and enjoy catching up on the global economy   over the weekend with a nice cup of coffee and the  print edition, you'll always stay on top of the   latest global developments and support journalism  that values factual information, integrity, and   an independent point of view. So, don't miss out.  Click the link in the description or top comment   below or head over to ecomus.com/moneymackro  to claim your exclusive 35% discount today.

The populist surge in the west is over. This is the  end. Or is it? Actually, the experience of early   adopter populist countries shows us that this  is extremely unlikely. For example, in Austria,   populism collapsed in the early 2000s after Jörg  Haider's freedom party government turned out to   be a chaotic mess. But once again, although not  in power, the Austrian Freedom Party got the most   votes in the last election. Similarly, in Italy,  the populist Berlusconi faced a crushing defeat   after it became clear his billionaire who will  rescue the economy narrative was not working. Yet,   Berlusconi always came back. And even when he  himself did not, Italy is now again ruled by a   populist right-wing president. In fact, looking at  these graphs, we can see that the dynamic is often   the same. Once right-wing populism emerges, yes,  it often suffers crushing setbacks due to chaotic   infighting, no economic progress, and the exposure  of massive corruption, but it never really goes   away. So, right-wing populists may suffer  crushing defeats and often embarrassing ones,   but eventually they always bounce back, which  raises the question, why does populism always keep   bouncing back? Why is it not going away after all  of those broken promises? As always on Money and   Macro, we've emerged ourselves into the relevant  scientific literature and selected the four most   prevalent explanations. Narrative number one, it's  the economy stupid? Ordinary people have been left   behind. Narrative number two, right-wing populists  have a point. Mainstream politicians themselves   are the problem. They've become out of touch  on cultural issues like immigration. Narrative   number three, people have just become more racist/  authoritarian. And last but not least, narrative   number four, it's actually social media that's  to blame. That is pushing people to political   extremes. In this video, we examine the evidence  and counter evidence for each theory to determine   which of them has the most convincing explanation  for why right-wing populism keeps bouncing back.   But before solving the puzzle, we first need to  make sure we are all talking about the same thing.   That is, what is right-wing populism actually?  And how is it different from left-wing populism?   Aren't these polar opposites? Why are we talking  about them in the same breath? Well, yes and no.   This is something people often get wrong. Populism  is not at all like socialism or like conservatism.   It's not an ideology. It's a way of talking about  politics a lens through which political conflict   is framed. At its core, both left and right-wing  populism divides society into two opposing groups.   On the one hand, the hardworking people and on  the other, the corrupt elites. Populism is pretty   easy to understand. Essentially, all problems in  society are the fault of these corrupt elites. The   difference between left and right-wing populism  then is which elite group they frame as the   problem. On the left, populists target economic  elites such as rich and the corporations, the   brolicharchy of tremendous wealth, a government  of the billionaire class by the billionaire class.   On the other hand, right-wing populists target  a different kind of elite group, the cultural   elites, such as "The Brussels bureaucrats, the  Amercian bureaucrats, and the Soros network..."  but also academics or mainstream politicians  accused of ignoring ordinary people's concerns   about immigration, crime, and cultural identity.  Different enemies, same narrative. The system   has been captured by elites which no longer  represent the people and simple narratives   often come with simple solutions. So if you  believe that moneyed elites cause most problems,   you should vote left-wing populists into power  so that they can tax their wealth away. And   if you believe immigration is damaging  the economy and eroding local culture,   you should back leaders who are not afraid to defy  cultural elites and take massive actions to close   the borders. Especially the right-wing populist  story convinced a lot of people in the West in   the last couple of decades. But okay, back to the  present. Trump's remanufacturing America story is   failing. Brexit is not making Britain rich and  Orban just lost in a landslide. So why again do   we say right-wing populism will bounce back soon  enough? Well, let's start with the economic story   that should in theory empower left-wing populists.  But surprisingly in reality often empowers the   right. Narrative number one, people vote populist  because they are economically left behind. Okay,   this map shows GDP per capita per German state.  And this map shows where people mostly voted   for the right-wing populist party AFD. This is  not a coincidence. When we look at leaders like   Marine Le Pen and Viktor Orban, we see that they  often struggle to gain traction in thriving rich   urban centers, but they dominate the vote  in rural and declining areas. By now, it's   pretty well known that the hyper globalization  period from the late 1970s to early 2000s created   winners and losers. Chinese workers were  able to produce for the rest of the world,   massively improving their own living standards.  Meanwhile, in the west, highly educated people   in big cities in rich countries were also able to  export services to more and more people globally,   which translated into higher wages for them.  But take a look at this graph. The hourly wage   corrected for inflation for a US worker without  higher education is very similar today to what it   was in 1965. So while during the period of hyper  globalization the US economy kept growing only   the well-educated cultural and moneyed elites have  actually seen their purchasing power go up while   many ordinary people were indeed left behind.  It's not hard to see how this can translate   into politics. If you feel the system no longer  works for you and the same political elites keep   defending it. Of course you will start looking for  alternatives and that is exactly what we see in   the data. Regions more exposed to Chinese import  competition were more likely to support Brexit,   Trump, and the AFD in Germany. Areas more exposed  to automation tend to show stronger support for   populist parties. However, while this evidence  looks convincing, it has three big problems.   First, if we look at people in countries that  truly lost a lot of their income between 1985   and 2015, we would expect right-wing  populism to have surged in countries   like Spain and Portugal. But actually, relatively  fortunate and less unequal countries like Norway,   Finland, Switzerland, and Austria have  seen far bigger right-wing populist surges.   The second problem with the explanation is  once we move from regions to individuals,   the story weakens. As research by political  science professor Larry Bartles shows, economic   disaection turns out to be a poor predictor  of whether someone votes or identifies with   right-wing populism. It is far less informative  than attitudes towards immigration, trust in   political institutions, or broader cultural  values. In other words, yes, many people in left   behind areas vote for the populist right. But if  you want to actually predict whether someone will   support the populist right, you get much closer  by asking what they think about immigration or   whether they trust politicians than by asking them  about what they think about the economy. The third   problem is if populism is about regular working  folks wanting an equal share of the economic pie,   wouldn't it make sense to vote for populists  who want to redistribute wealth, so those on   the left? However, if we look at the data, we  see the opposite. It's especially right-wing   populism that is surging in the West as inequality  increased. So, could it be that people are fooled   by the populist right to vote against their own  interest? That's a story that we hear a lot and it   could be true but actually and it may shock some  of you hearing this from me in this case maybe   economics is not everything. So it's time for this  economist here to step outside of his comfort zone   with narrative number two. Right-wing populism  is actually about out of touch cultural elites.   Okay. The argument goes a little bit like this. No  voters are not confused. The real people who are   confused are the cultural elites. I really believe  that Westminster, the intellectuals, the liberal   elites just don't get it. Take a simple question.  Should immigrants adapt to the customs of the   country that they move to? Large majorities of  the public say yes. This holds all across Europe,   Britain, Denmark, Germany, and Sweden. But among  political elites, only those in Denmark agree with   that view. On the other hand, in Germany, all  politicians except for the populist right, and   yes, that even includes conservative politicians,  are more liberal on immigration than the average   voter? Or take the question, should race be taken  into account in college admissions? Only a third   of Americans agree with this view. Yet mainstream  Democrat leaders from Hillary Clinton to Joe Biden   have consistently supported raceconscious policies  and criticized court rulings against them. This   disconnect between what the public wants and  what politicians want on the other hand is what   political scientists call a representation  gap. As you can see here in this FT graph,   politicians and voters are roughly aligned when  it comes to economic issues like redistribution   and capitalism. Left-wing politicians are close  to leftwing voters and right-wing politicians   are close to right-wing voters. But when it  comes to topics like immigration and crime,   politicians are on average far more to the left  than the average voter. So when the political   debate is dominated by economic issues like  taxes and redistribution, well in those cases,   mainstream parties are relatively safe because  they champion what voters actually want. But   when cultural issues move to the center of the  debate, the dynamics change. If voters feel that   their basic cultural preferences are ignored  or even worse, dismissed or talked down upon,   that gap becomes a big opportunity for right-wing  populists to emerge. The clearest example of this   is the 2015 European refugee crisis. As images  of large numbers of asylum seekers and irregular   border crossings dominated the news, immigrations  shot up the list of public concerns. People did   not necessarily purely react to immigration  itself, but they did react strongly to the   perception of chaos and loss of control. And when  that perception takes hold and politicians are not   reacting to it, then right-wing populists gain a  big advantage. Research by James Denison and Andre   Fer Gues shows that as immigration becomes more  salient, support for populist right-wing parties   rises right along with it. Not perfectly, not  everywhere, but consistently enough to matter.   At the same time, as citizens, we're like, "Oh  my goodness, look at what's going on here. Our   societies are changing dramatically. We're in the  midst of this economic stagnation where, you know,   I feel like I have to compete for jobs. I have to  compete for public goods." And at the same time,   traditional establishment parties are inviting in  tons of immigrants, allowing huge asylum flows,   telling me that if I worry about this or I'm  concerned about this, I'm a racist or a xenophobe.   So, interestingly, when populist right-wingers say  that cultural elites like mainstream politicians   are out of touch, data shows us that they are  correct. Not when it comes to economics, but when   it comes to social issues like immigration and  crime. Yes, the general public is significantly to   the right of most politicians. But as we've seen,  there's only one exception. In Denmark, the Social   Democrats adopted stricter immigration policies  themselves, which coincided with a decline in   support for the populist right from over 20% to  just below 10%. But okay, that's still 10%. So,   there must be more going on. But this was still a  crucial story. In many leftwing circles, though,   the diagnosis is very different. The problem they  argue goes far beyond out of touch elites. No,   it points to the people. Narrative number  three, people are simply becoming more   racist. And honestly, this is not super popular in  academic circles. This explanation, it's actually   an argument that I often hear from friends, so  I thought it was important to address it here.   Nonetheless, many of them watch extreme takes  from populist right-wingers and their supporters.   They scroll through online comment sections and  come away thinking something genuinely dark is   happening. People are becoming evil. People are  stigmatizing entire Muslim communities as violent.   Politicians are showing authoritarian tendencies.  There are conspiracies about Brussels bureaucrates   or George Soros erasing Western civilization. It  can feel like people are forgetting the lessons   of the past, growing tired of democracy and  becoming more xenophobic and conspiratorial. But   is it actually true? Are people really becoming  less satisfied with democracy and more hostile to   immigrants? Well, according to political scientist  Larry Bartles, the answer to that question is   clear. No. Absolutely not. Based on survey  responses from more than 300,000 Europeans, he   finds that they have not become significantly more  illiberal or more hostile to immigration over the   past two decades. In fact, support for European  integration has remained fairly stable throughout   the 21st century. Level of trust in parliament and  politicians, satisfaction with democracy and even   attitudes towards immigration. They have remained  broadly stable over time and have even improved a   little. Of course, there are some exceptions. For  example, Spanish citizens became much more hostile   to democracy after the massive economic crisis  in 2008. However, satisfaction with democracy   has been rising in Finland, Sweden, and Denmark  at a time when the populist right became a major   player in those countries. So overall, no, it does  not appear that people are becoming more racist or   authoritarian, but I do understand why more and  more people feel this way. The YouTube shorts   algorithm sometimes recommends me these nice  videos of how US presidents used to interact with   one each other. I think Mr. Nixon is an effective  leader of his party. The question before us is   which point of view and which party do we want to  leave the United States? I agree with Senator K.   And if we compare that to some of the stuff that  Trump says these days, sleepy, crooked Joe Biden,   where I could stand in the middle of Fifth Avenue  and shoot somebody and I wouldn't lose any voters.   Okay, it's like incredible. Then it's clear that  something has changed. The public is willing   to accept far more uncivilized language. And  actually, this is not just an American phenomena.   Right-wing populist leaders everywhere use  increasingly inflammatory language. So why   does the public increasingly accept that type of  behavior if they themselves did not become more   authoritarian? Well, this brings us to narrative  number four. Blame social media. Social media is   polarizing us. And there's really good evidence  that this is actually happening in two ways.   First, as you can see here, traditional media like  newspapers and radio, well, they gave a voice to   everyone, the hard left, the moderates, and the  hard right. However, as you can see here, cable   TV is already quite a bit more biased towards  both extremes. And on social media, well, oh boy,   the algorithms really love to serve us both hard  left and hard right content, while the moderate,   nuanced, more boring voices are buried in the  algorithms. To explain this, psychologist J.   Vanbo describes four dark laws that drive online  engagement. Negativity, extremism, us versus   them thinking, and moral emotional language. In  other words, content that is more negative, more   extreme, more tribal, and more emotionally charged  is more likely to grab attention and spread. This   means that expressing outrage, attacking the other  side, or using words like disgusting or unjust   or just super simple narratives will consistently  outperform more balanced or nuanced views. So, if   you are on social media a lot, it makes sense that  you will start believing that people are angrier,   more polarized, and more extreme than that they  actually are. But it gets worse. The second way   that social media is polarizing us other than  amplifying extreme voices is by connecting extreme   voices. You see, views that were once socially  taboo like I could have done things to her that   would have made your head spin used to remain on  the fringes. But nowadays, people holding these   views can find each other instantly. When they  realize that they're not alone, then they become   more confident to express those views in public.  So the internet did not necessarily create these   attitudes, but it did make them more visible, more  organized, and more politically relevant. And this   can explain why many of my friends that spend a  lot of time online feel that people on average   have become more extreme, even though research  shows us that they did not. However, again,   this is not the full story. You see, cable TV and  social media spread pretty evenly worldwide. Yet,   right-wing populism patterns vary drastically  across countries. Not every country has ended   up with Americanstyle media polarization.  So this brings us to our conclusion. Which   narrative is the most convincing? Well, one  thing it's clear, it's not narrative number   three. People are not becoming more racist  or authoritarian over time. Anti-democratic   and anti-immigration sentiment did not just  appear out of nowhere in the last decades.   There's always been a slice of a population that  feels this way, which means there's always been   some baseline demand for right-wing populism.  But for the other narratives, given that country   trajectories are so different, the different  right-wing populist surges can probably best   be explained by combining these three other  narratives. First, there was rising inequality,   austerity, the fallout from the financial crisis.  All of that shook people's trust in institutions.   This could explain populist surges in the American  Midwest or Eastern Europe. On the other hand,   populist surges in relatively equal countries like  Norway and Denmark probably have more to do with   a political disconnect on cultural issues. And  finally, the rise of social media and cable TV   probably acted like an amplifier, giving populist  parties that represent 10 to 30% of the population   the power to take over several countries. So yeah,  all of these three explanations are supported by   the evidence. On their own though, there are  too many contradictions to believe them. But   taken together, it becomes clear that right-wing  populism will likely surge back again and again   as long as inequality remains high. Politicians  do not listen to voter preferences on culture and   immigration. And number three, as long as social  media gives populist an algorithmic edge. But   yeah, that's my take. What do you think? Let me  know in the comments below. And if you find this   topic as fascinating as I do, I highly recommend  that you check out the excellent analysis by our   advertising sponsor, The Economists, which I  always check out for the research process of   my videos. For this episode in particular,  I learned a lot from their analysis on how   the Danish social democrats have shifted  right on immigration to counter the far   right. Or if you also care about macroeconomic  stability, I encourage you to take a look at   this article where they explore how efforts  to be fiscally responsible and reduce budget   deficits can sometimes end up benefiting populist  parties. And finally, for a broader overview, I'd   strongly strongly recommend this article on what  populism actually means. As these examples show,   The Economist delivers insights that help you  see the bigger picture and think for yourself.   This is why I almost always rely on their analysis  for my research and it's why I highly recommend   that you subscribe and that's actually now  more interesting than ever given that they   are offering a special 35% discount for money and  macro viewers. Now, whether you prefer their daily   journalism in the Economist app, or you are like  me and enjoy catching up on the global economy   over the weekend with a nice cup of coffee and the  print edition, you'll always stay on top of the   latest global developments and support journalism  that values factual information, integrity, and   an independent point of view. So, don't miss out.  Click the link in the description or top comment   below or head over to ecomus.com/moneymackro  to claim your exclusive 35% discount today.

The populist surge in the west is over. This is the  end. Or is it? Actually, the experience of early   adopter populist countries shows us that this  is extremely unlikely. For example, in Austria,   populism collapsed in the early 2000s after Jörg  Haider's freedom party government turned out to   be a chaotic mess. But once again, although not  in power, the Austrian Freedom Party got the most   votes in the last election. Similarly, in Italy,  the populist Berlusconi faced a crushing defeat   after it became clear his billionaire who will  rescue the economy narrative was not working. Yet,   Berlusconi always came back. And even when he  himself did not, Italy is now again ruled by a   populist right-wing president. In fact, looking at  these graphs, we can see that the dynamic is often   the same. Once right-wing populism emerges, yes,  it often suffers crushing setbacks due to chaotic   infighting, no economic progress, and the exposure  of massive corruption, but it never really goes   away. So, right-wing populists may suffer  crushing defeats and often embarrassing ones,   but eventually they always bounce back, which  raises the question, why does populism always keep   bouncing back? Why is it not going away after all  of those broken promises? As always on Money and   Macro, we've emerged ourselves into the relevant  scientific literature and selected the four most   prevalent explanations. Narrative number one, it's  the economy stupid? Ordinary people have been left   behind. Narrative number two, right-wing populists  have a point. Mainstream politicians themselves   are the problem. They've become out of touch  on cultural issues like immigration. Narrative   number three, people have just become more racist/  authoritarian. And last but not least, narrative   number four, it's actually social media that's  to blame. That is pushing people to political   extremes. In this video, we examine the evidence  and counter evidence for each theory to determine   which of them has the most convincing explanation  for why right-wing populism keeps bouncing back.   But before solving the puzzle, we first need to  make sure we are all talking about the same thing.   That is, what is right-wing populism actually?  And how is it different from left-wing populism?   Aren't these polar opposites? Why are we talking  about them in the same breath? Well, yes and no.   This is something people often get wrong. Populism  is not at all like socialism or like conservatism.   It's not an ideology. It's a way of talking about  politics a lens through which political conflict   is framed. At its core, both left and right-wing  populism divides society into two opposing groups.   On the one hand, the hardworking people and on  the other, the corrupt elites. Populism is pretty   easy to understand. Essentially, all problems in  society are the fault of these corrupt elites. The   difference between left and right-wing populism  then is which elite group they frame as the   problem. On the left, populists target economic  elites such as rich and the corporations, the   brolicharchy of tremendous wealth, a government  of the billionaire class by the billionaire class.   On the other hand, right-wing populists target  a different kind of elite group, the cultural   elites, such as "The Brussels bureaucrats, the  Amercian bureaucrats, and the Soros network..."  but also academics or mainstream politicians  accused of ignoring ordinary people's concerns   about immigration, crime, and cultural identity.  Different enemies, same narrative. The system   has been captured by elites which no longer  represent the people and simple narratives   often come with simple solutions. So if you  believe that moneyed elites cause most problems,   you should vote left-wing populists into power  so that they can tax their wealth away. And   if you believe immigration is damaging  the economy and eroding local culture,   you should back leaders who are not afraid to defy  cultural elites and take massive actions to close   the borders. Especially the right-wing populist  story convinced a lot of people in the West in   the last couple of decades. But okay, back to the  present. Trump's remanufacturing America story is   failing. Brexit is not making Britain rich and  Orban just lost in a landslide. So why again do   we say right-wing populism will bounce back soon  enough? Well, let's start with the economic story   that should in theory empower left-wing populists.  But surprisingly in reality often empowers the   right. Narrative number one, people vote populist  because they are economically left behind. Okay,   this map shows GDP per capita per German state.  And this map shows where people mostly voted   for the right-wing populist party AFD. This is  not a coincidence. When we look at leaders like   Marine Le Pen and Viktor Orban, we see that they  often struggle to gain traction in thriving rich   urban centers, but they dominate the vote  in rural and declining areas. By now, it's   pretty well known that the hyper globalization  period from the late 1970s to early 2000s created   winners and losers. Chinese workers were  able to produce for the rest of the world,   massively improving their own living standards.  Meanwhile, in the west, highly educated people   in big cities in rich countries were also able to  export services to more and more people globally,   which translated into higher wages for them.  But take a look at this graph. The hourly wage   corrected for inflation for a US worker without  higher education is very similar today to what it   was in 1965. So while during the period of hyper  globalization the US economy kept growing only   the well-educated cultural and moneyed elites have  actually seen their purchasing power go up while   many ordinary people were indeed left behind.  It's not hard to see how this can translate   into politics. If you feel the system no longer  works for you and the same political elites keep   defending it. Of course you will start looking for  alternatives and that is exactly what we see in   the data. Regions more exposed to Chinese import  competition were more likely to support Brexit,   Trump, and the AFD in Germany. Areas more exposed  to automation tend to show stronger support for   populist parties. However, while this evidence  looks convincing, it has three big problems.   First, if we look at people in countries that  truly lost a lot of their income between 1985   and 2015, we would expect right-wing  populism to have surged in countries   like Spain and Portugal. But actually, relatively  fortunate and less unequal countries like Norway,   Finland, Switzerland, and Austria have  seen far bigger right-wing populist surges.   The second problem with the explanation is  once we move from regions to individuals,   the story weakens. As research by political  science professor Larry Bartles shows, economic   disaection turns out to be a poor predictor  of whether someone votes or identifies with   right-wing populism. It is far less informative  than attitudes towards immigration, trust in   political institutions, or broader cultural  values. In other words, yes, many people in left   behind areas vote for the populist right. But if  you want to actually predict whether someone will   support the populist right, you get much closer  by asking what they think about immigration or   whether they trust politicians than by asking them  about what they think about the economy. The third   problem is if populism is about regular working  folks wanting an equal share of the economic pie,   wouldn't it make sense to vote for populists  who want to redistribute wealth, so those on   the left? However, if we look at the data, we  see the opposite. It's especially right-wing   populism that is surging in the West as inequality  increased. So, could it be that people are fooled   by the populist right to vote against their own  interest? That's a story that we hear a lot and it   could be true but actually and it may shock some  of you hearing this from me in this case maybe   economics is not everything. So it's time for this  economist here to step outside of his comfort zone   with narrative number two. Right-wing populism  is actually about out of touch cultural elites.   Okay. The argument goes a little bit like this. No  voters are not confused. The real people who are   confused are the cultural elites. I really believe  that Westminster, the intellectuals, the liberal   elites just don't get it. Take a simple question.  Should immigrants adapt to the customs of the   country that they move to? Large majorities of  the public say yes. This holds all across Europe,   Britain, Denmark, Germany, and Sweden. But among  political elites, only those in Denmark agree with   that view. On the other hand, in Germany, all  politicians except for the populist right, and   yes, that even includes conservative politicians,  are more liberal on immigration than the average   voter? Or take the question, should race be taken  into account in college admissions? Only a third   of Americans agree with this view. Yet mainstream  Democrat leaders from Hillary Clinton to Joe Biden   have consistently supported raceconscious policies  and criticized court rulings against them. This   disconnect between what the public wants and  what politicians want on the other hand is what   political scientists call a representation  gap. As you can see here in this FT graph,   politicians and voters are roughly aligned when  it comes to economic issues like redistribution   and capitalism. Left-wing politicians are close  to leftwing voters and right-wing politicians   are close to right-wing voters. But when it  comes to topics like immigration and crime,   politicians are on average far more to the left  than the average voter. So when the political   debate is dominated by economic issues like  taxes and redistribution, well in those cases,   mainstream parties are relatively safe because  they champion what voters actually want. But   when cultural issues move to the center of the  debate, the dynamics change. If voters feel that   their basic cultural preferences are ignored  or even worse, dismissed or talked down upon,   that gap becomes a big opportunity for right-wing  populists to emerge. The clearest example of this   is the 2015 European refugee crisis. As images  of large numbers of asylum seekers and irregular   border crossings dominated the news, immigrations  shot up the list of public concerns. People did   not necessarily purely react to immigration  itself, but they did react strongly to the   perception of chaos and loss of control. And when  that perception takes hold and politicians are not   reacting to it, then right-wing populists gain a  big advantage. Research by James Denison and Andre   Fer Gues shows that as immigration becomes more  salient, support for populist right-wing parties   rises right along with it. Not perfectly, not  everywhere, but consistently enough to matter.   At the same time, as citizens, we're like, "Oh  my goodness, look at what's going on here. Our   societies are changing dramatically. We're in the  midst of this economic stagnation where, you know,   I feel like I have to compete for jobs. I have to  compete for public goods." And at the same time,   traditional establishment parties are inviting in  tons of immigrants, allowing huge asylum flows,   telling me that if I worry about this or I'm  concerned about this, I'm a racist or a xenophobe.   So, interestingly, when populist right-wingers say  that cultural elites like mainstream politicians   are out of touch, data shows us that they are  correct. Not when it comes to economics, but when   it comes to social issues like immigration and  crime. Yes, the general public is significantly to   the right of most politicians. But as we've seen,  there's only one exception. In Denmark, the Social   Democrats adopted stricter immigration policies  themselves, which coincided with a decline in   support for the populist right from over 20% to  just below 10%. But okay, that's still 10%. So,   there must be more going on. But this was still a  crucial story. In many leftwing circles, though,   the diagnosis is very different. The problem they  argue goes far beyond out of touch elites. No,   it points to the people. Narrative number  three, people are simply becoming more   racist. And honestly, this is not super popular in  academic circles. This explanation, it's actually   an argument that I often hear from friends, so  I thought it was important to address it here.   Nonetheless, many of them watch extreme takes  from populist right-wingers and their supporters.   They scroll through online comment sections and  come away thinking something genuinely dark is   happening. People are becoming evil. People are  stigmatizing entire Muslim communities as violent.   Politicians are showing authoritarian tendencies.  There are conspiracies about Brussels bureaucrates   or George Soros erasing Western civilization. It  can feel like people are forgetting the lessons   of the past, growing tired of democracy and  becoming more xenophobic and conspiratorial. But   is it actually true? Are people really becoming  less satisfied with democracy and more hostile to   immigrants? Well, according to political scientist  Larry Bartles, the answer to that question is   clear. No. Absolutely not. Based on survey  responses from more than 300,000 Europeans, he   finds that they have not become significantly more  illiberal or more hostile to immigration over the   past two decades. In fact, support for European  integration has remained fairly stable throughout   the 21st century. Level of trust in parliament and  politicians, satisfaction with democracy and even   attitudes towards immigration. They have remained  broadly stable over time and have even improved a   little. Of course, there are some exceptions. For  example, Spanish citizens became much more hostile   to democracy after the massive economic crisis  in 2008. However, satisfaction with democracy   has been rising in Finland, Sweden, and Denmark  at a time when the populist right became a major   player in those countries. So overall, no, it does  not appear that people are becoming more racist or   authoritarian, but I do understand why more and  more people feel this way. The YouTube shorts   algorithm sometimes recommends me these nice  videos of how US presidents used to interact with   one each other. I think Mr. Nixon is an effective  leader of his party. The question before us is   which point of view and which party do we want to  leave the United States? I agree with Senator K.   And if we compare that to some of the stuff that  Trump says these days, sleepy, crooked Joe Biden,   where I could stand in the middle of Fifth Avenue  and shoot somebody and I wouldn't lose any voters.   Okay, it's like incredible. Then it's clear that  something has changed. The public is willing   to accept far more uncivilized language. And  actually, this is not just an American phenomena.   Right-wing populist leaders everywhere use  increasingly inflammatory language. So why   does the public increasingly accept that type of  behavior if they themselves did not become more   authoritarian? Well, this brings us to narrative  number four. Blame social media. Social media is   polarizing us. And there's really good evidence  that this is actually happening in two ways.   First, as you can see here, traditional media like  newspapers and radio, well, they gave a voice to   everyone, the hard left, the moderates, and the  hard right. However, as you can see here, cable   TV is already quite a bit more biased towards  both extremes. And on social media, well, oh boy,   the algorithms really love to serve us both hard  left and hard right content, while the moderate,   nuanced, more boring voices are buried in the  algorithms. To explain this, psychologist J.   Vanbo describes four dark laws that drive online  engagement. Negativity, extremism, us versus   them thinking, and moral emotional language. In  other words, content that is more negative, more   extreme, more tribal, and more emotionally charged  is more likely to grab attention and spread. This   means that expressing outrage, attacking the other  side, or using words like disgusting or unjust   or just super simple narratives will consistently  outperform more balanced or nuanced views. So, if   you are on social media a lot, it makes sense that  you will start believing that people are angrier,   more polarized, and more extreme than that they  actually are. But it gets worse. The second way   that social media is polarizing us other than  amplifying extreme voices is by connecting extreme   voices. You see, views that were once socially  taboo like I could have done things to her that   would have made your head spin used to remain on  the fringes. But nowadays, people holding these   views can find each other instantly. When they  realize that they're not alone, then they become   more confident to express those views in public.  So the internet did not necessarily create these   attitudes, but it did make them more visible, more  organized, and more politically relevant. And this   can explain why many of my friends that spend a  lot of time online feel that people on average   have become more extreme, even though research  shows us that they did not. However, again,   this is not the full story. You see, cable TV and  social media spread pretty evenly worldwide. Yet,   right-wing populism patterns vary drastically  across countries. Not every country has ended   up with Americanstyle media polarization.  So this brings us to our conclusion. Which   narrative is the most convincing? Well, one  thing it's clear, it's not narrative number   three. People are not becoming more racist  or authoritarian over time. Anti-democratic   and anti-immigration sentiment did not just  appear out of nowhere in the last decades.   There's always been a slice of a population that  feels this way, which means there's always been   some baseline demand for right-wing populism.  But for the other narratives, given that country   trajectories are so different, the different  right-wing populist surges can probably best   be explained by combining these three other  narratives. First, there was rising inequality,   austerity, the fallout from the financial crisis.  All of that shook people's trust in institutions.   This could explain populist surges in the American  Midwest or Eastern Europe. On the other hand,   populist surges in relatively equal countries like  Norway and Denmark probably have more to do with   a political disconnect on cultural issues. And  finally, the rise of social media and cable TV   probably acted like an amplifier, giving populist  parties that represent 10 to 30% of the population   the power to take over several countries. So yeah,  all of these three explanations are supported by   the evidence. On their own though, there are  too many contradictions to believe them. But   taken together, it becomes clear that right-wing  populism will likely surge back again and again   as long as inequality remains high. Politicians  do not listen to voter preferences on culture and   immigration. And number three, as long as social  media gives populist an algorithmic edge. But   yeah, that's my take. What do you think? Let me  know in the comments below. And if you find this   topic as fascinating as I do, I highly recommend  that you check out the excellent analysis by our   advertising sponsor, The Economists, which I  always check out for the research process of   my videos. For this episode in particular,  I learned a lot from their analysis on how   the Danish social democrats have shifted  right on immigration to counter the far   right. Or if you also care about macroeconomic  stability, I encourage you to take a look at   this article where they explore how efforts  to be fiscally responsible and reduce budget   deficits can sometimes end up benefiting populist  parties. And finally, for a broader overview, I'd   strongly strongly recommend this article on what  populism actually means. As these examples show,   The Economist delivers insights that help you  see the bigger picture and think for yourself.   This is why I almost always rely on their analysis  for my research and it's why I highly recommend   that you subscribe and that's actually now  more interesting than ever given that they   are offering a special 35% discount for money and  macro viewers. Now, whether you prefer their daily   journalism in the Economist app, or you are like  me and enjoy catching up on the global economy   over the weekend with a nice cup of coffee and the  print edition, you'll always stay on top of the   latest global developments and support journalism  that values factual information, integrity, and   an independent point of view. So, don't miss out.  Click the link in the description or top comment   below or head over to ecomus.com/moneymackro  to claim your exclusive 35% discount today.

The populist surge in the west is over. This is the  end. Or is it? Actually, the experience of early   adopter populist countries shows us that this  is extremely unlikely. For example, in Austria,   populism collapsed in the early 2000s after Jörg  Haider's freedom party government turned out to   be a chaotic mess. But once again, although not  in power, the Austrian Freedom Party got the most   votes in the last election. Similarly, in Italy,  the populist Berlusconi faced a crushing defeat   after it became clear his billionaire who will  rescue the economy narrative was not working. Yet,   Berlusconi always came back. And even when he  himself did not, Italy is now again ruled by a   populist right-wing president. In fact, looking at  these graphs, we can see that the dynamic is often   the same. Once right-wing populism emerges, yes,  it often suffers crushing setbacks due to chaotic   infighting, no economic progress, and the exposure  of massive corruption, but it never really goes   away. So, right-wing populists may suffer  crushing defeats and often embarrassing ones,   but eventually they always bounce back, which  raises the question, why does populism always keep   bouncing back? Why is it not going away after all  of those broken promises? As always on Money and   Macro, we've emerged ourselves into the relevant  scientific literature and selected the four most   prevalent explanations. Narrative number one, it's  the economy stupid? Ordinary people have been left   behind. Narrative number two, right-wing populists  have a point. Mainstream politicians themselves   are the problem. They've become out of touch  on cultural issues like immigration. Narrative   number three, people have just become more racist/  authoritarian. And last but not least, narrative   number four, it's actually social media that's  to blame. That is pushing people to political   extremes. In this video, we examine the evidence  and counter evidence for each theory to determine   which of them has the most convincing explanation  for why right-wing populism keeps bouncing back.   But before solving the puzzle, we first need to  make sure we are all talking about the same thing.   That is, what is right-wing populism actually?  And how is it different from left-wing populism?   Aren't these polar opposites? Why are we talking  about them in the same breath? Well, yes and no.   This is something people often get wrong. Populism  is not at all like socialism or like conservatism.   It's not an ideology. It's a way of talking about  politics a lens through which political conflict   is framed. At its core, both left and right-wing  populism divides society into two opposing groups.   On the one hand, the hardworking people and on  the other, the corrupt elites. Populism is pretty   easy to understand. Essentially, all problems in  society are the fault of these corrupt elites. The   difference between left and right-wing populism  then is which elite group they frame as the   problem. On the left, populists target economic  elites such as rich and the corporations, the   brolicharchy of tremendous wealth, a government  of the billionaire class by the billionaire class.   On the other hand, right-wing populists target  a different kind of elite group, the cultural   elites, such as "The Brussels bureaucrats, the  Amercian bureaucrats, and the Soros network..."  but also academics or mainstream politicians  accused of ignoring ordinary people's concerns   about immigration, crime, and cultural identity.  Different enemies, same narrative. The system   has been captured by elites which no longer  represent the people and simple narratives   often come with simple solutions. So if you  believe that moneyed elites cause most problems,   you should vote left-wing populists into power  so that they can tax their wealth away. And   if you believe immigration is damaging  the economy and eroding local culture,   you should back leaders who are not afraid to defy  cultural elites and take massive actions to close   the borders. Especially the right-wing populist  story convinced a lot of people in the West in   the last couple of decades. But okay, back to the  present. Trump's remanufacturing America story is   failing. Brexit is not making Britain rich and  Orban just lost in a landslide. So why again do   we say right-wing populism will bounce back soon  enough? Well, let's start with the economic story   that should in theory empower left-wing populists.  But surprisingly in reality often empowers the   right. Narrative number one, people vote populist  because they are economically left behind. Okay,   this map shows GDP per capita per German state.  And this map shows where people mostly voted   for the right-wing populist party AFD. This is  not a coincidence. When we look at leaders like   Marine Le Pen and Viktor Orban, we see that they  often struggle to gain traction in thriving rich   urban centers, but they dominate the vote  in rural and declining areas. By now, it's   pretty well known that the hyper globalization  period from the late 1970s to early 2000s created   winners and losers. Chinese workers were  able to produce for the rest of the world,   massively improving their own living standards.  Meanwhile, in the west, highly educated people   in big cities in rich countries were also able to  export services to more and more people globally,   which translated into higher wages for them.  But take a look at this graph. The hourly wage   corrected for inflation for a US worker without  higher education is very similar today to what it   was in 1965. So while during the period of hyper  globalization the US economy kept growing only   the well-educated cultural and moneyed elites have  actually seen their purchasing power go up while   many ordinary people were indeed left behind.  It's not hard to see how this can translate   into politics. If you feel the system no longer  works for you and the same political elites keep   defending it. Of course you will start looking for  alternatives and that is exactly what we see in   the data. Regions more exposed to Chinese import  competition were more likely to support Brexit,   Trump, and the AFD in Germany. Areas more exposed  to automation tend to show stronger support for   populist parties. However, while this evidence  looks convincing, it has three big problems.   First, if we look at people in countries that  truly lost a lot of their income between 1985   and 2015, we would expect right-wing  populism to have surged in countries   like Spain and Portugal. But actually, relatively  fortunate and less unequal countries like Norway,   Finland, Switzerland, and Austria have  seen far bigger right-wing populist surges.   The second problem with the explanation is  once we move from regions to individuals,   the story weakens. As research by political  science professor Larry Bartles shows, economic   disaection turns out to be a poor predictor  of whether someone votes or identifies with   right-wing populism. It is far less informative  than attitudes towards immigration, trust in   political institutions, or broader cultural  values. In other words, yes, many people in left   behind areas vote for the populist right. But if  you want to actually predict whether someone will   support the populist right, you get much closer  by asking what they think about immigration or   whether they trust politicians than by asking them  about what they think about the economy. The third   problem is if populism is about regular working  folks wanting an equal share of the economic pie,   wouldn't it make sense to vote for populists  who want to redistribute wealth, so those on   the left? However, if we look at the data, we  see the opposite. It's especially right-wing   populism that is surging in the West as inequality  increased. So, could it be that people are fooled   by the populist right to vote against their own  interest? That's a story that we hear a lot and it   could be true but actually and it may shock some  of you hearing this from me in this case maybe   economics is not everything. So it's time for this  economist here to step outside of his comfort zone   with narrative number two. Right-wing populism  is actually about out of touch cultural elites.   Okay. The argument goes a little bit like this. No  voters are not confused. The real people who are   confused are the cultural elites. I really believe  that Westminster, the intellectuals, the liberal   elites just don't get it. Take a simple question.  Should immigrants adapt to the customs of the   country that they move to? Large majorities of  the public say yes. This holds all across Europe,   Britain, Denmark, Germany, and Sweden. But among  political elites, only those in Denmark agree with   that view. On the other hand, in Germany, all  politicians except for the populist right, and   yes, that even includes conservative politicians,  are more liberal on immigration than the average   voter? Or take the question, should race be taken  into account in college admissions? Only a third   of Americans agree with this view. Yet mainstream  Democrat leaders from Hillary Clinton to Joe Biden   have consistently supported raceconscious policies  and criticized court rulings against them. This   disconnect between what the public wants and  what politicians want on the other hand is what   political scientists call a representation  gap. As you can see here in this FT graph,   politicians and voters are roughly aligned when  it comes to economic issues like redistribution   and capitalism. Left-wing politicians are close  to leftwing voters and right-wing politicians   are close to right-wing voters. But when it  comes to topics like immigration and crime,   politicians are on average far more to the left  than the average voter. So when the political   debate is dominated by economic issues like  taxes and redistribution, well in those cases,   mainstream parties are relatively safe because  they champion what voters actually want. But   when cultural issues move to the center of the  debate, the dynamics change. If voters feel that   their basic cultural preferences are ignored  or even worse, dismissed or talked down upon,   that gap becomes a big opportunity for right-wing  populists to emerge. The clearest example of this   is the 2015 European refugee crisis. As images  of large numbers of asylum seekers and irregular   border crossings dominated the news, immigrations  shot up the list of public concerns. People did   not necessarily purely react to immigration  itself, but they did react strongly to the   perception of chaos and loss of control. And when  that perception takes hold and politicians are not   reacting to it, then right-wing populists gain a  big advantage. Research by James Denison and Andre   Fer Gues shows that as immigration becomes more  salient, support for populist right-wing parties   rises right along with it. Not perfectly, not  everywhere, but consistently enough to matter.   At the same time, as citizens, we're like, "Oh  my goodness, look at what's going on here. Our   societies are changing dramatically. We're in the  midst of this economic stagnation where, you know,   I feel like I have to compete for jobs. I have to  compete for public goods." And at the same time,   traditional establishment parties are inviting in  tons of immigrants, allowing huge asylum flows,   telling me that if I worry about this or I'm  concerned about this, I'm a racist or a xenophobe.   So, interestingly, when populist right-wingers say  that cultural elites like mainstream politicians   are out of touch, data shows us that they are  correct. Not when it comes to economics, but when   it comes to social issues like immigration and  crime. Yes, the general public is significantly to   the right of most politicians. But as we've seen,  there's only one exception. In Denmark, the Social   Democrats adopted stricter immigration policies  themselves, which coincided with a decline in   support for the populist right from over 20% to  just below 10%. But okay, that's still 10%. So,   there must be more going on. But this was still a  crucial story. In many leftwing circles, though,   the diagnosis is very different. The problem they  argue goes far beyond out of touch elites. No,   it points to the people. Narrative number  three, people are simply becoming more   racist. And honestly, this is not super popular in  academic circles. This explanation, it's actually   an argument that I often hear from friends, so  I thought it was important to address it here.   Nonetheless, many of them watch extreme takes  from populist right-wingers and their supporters.   They scroll through online comment sections and  come away thinking something genuinely dark is   happening. People are becoming evil. People are  stigmatizing entire Muslim communities as violent.   Politicians are showing authoritarian tendencies.  There are conspiracies about Brussels bureaucrates   or George Soros erasing Western civilization. It  can feel like people are forgetting the lessons   of the past, growing tired of democracy and  becoming more xenophobic and conspiratorial. But   is it actually true? Are people really becoming  less satisfied with democracy and more hostile to   immigrants? Well, according to political scientist  Larry Bartles, the answer to that question is   clear. No. Absolutely not. Based on survey  responses from more than 300,000 Europeans, he   finds that they have not become significantly more  illiberal or more hostile to immigration over the   past two decades. In fact, support for European  integration has remained fairly stable throughout   the 21st century. Level of trust in parliament and  politicians, satisfaction with democracy and even   attitudes towards immigration. They have remained  broadly stable over time and have even improved a   little. Of course, there are some exceptions. For  example, Spanish citizens became much more hostile   to democracy after the massive economic crisis  in 2008. However, satisfaction with democracy   has been rising in Finland, Sweden, and Denmark  at a time when the populist right became a major   player in those countries. So overall, no, it does  not appear that people are becoming more racist or   authoritarian, but I do understand why more and  more people feel this way. The YouTube shorts   algorithm sometimes recommends me these nice  videos of how US presidents used to interact with   one each other. I think Mr. Nixon is an effective  leader of his party. The question before us is   which point of view and which party do we want to  leave the United States? I agree with Senator K.   And if we compare that to some of the stuff that  Trump says these days, sleepy, crooked Joe Biden,   where I could stand in the middle of Fifth Avenue  and shoot somebody and I wouldn't lose any voters.   Okay, it's like incredible. Then it's clear that  something has changed. The public is willing   to accept far more uncivilized language. And  actually, this is not just an American phenomena.   Right-wing populist leaders everywhere use  increasingly inflammatory language. So why   does the public increasingly accept that type of  behavior if they themselves did not become more   authoritarian? Well, this brings us to narrative  number four. Blame social media. Social media is   polarizing us. And there's really good evidence  that this is actually happening in two ways.   First, as you can see here, traditional media like  newspapers and radio, well, they gave a voice to   everyone, the hard left, the moderates, and the  hard right. However, as you can see here, cable   TV is already quite a bit more biased towards  both extremes. And on social media, well, oh boy,   the algorithms really love to serve us both hard  left and hard right content, while the moderate,   nuanced, more boring voices are buried in the  algorithms. To explain this, psychologist J.   Vanbo describes four dark laws that drive online  engagement. Negativity, extremism, us versus   them thinking, and moral emotional language. In  other words, content that is more negative, more   extreme, more tribal, and more emotionally charged  is more likely to grab attention and spread. This   means that expressing outrage, attacking the other  side, or using words like disgusting or unjust   or just super simple narratives will consistently  outperform more balanced or nuanced views. So, if   you are on social media a lot, it makes sense that  you will start believing that people are angrier,   more polarized, and more extreme than that they  actually are. But it gets worse. The second way   that social media is polarizing us other than  amplifying extreme voices is by connecting extreme   voices. You see, views that were once socially  taboo like I could have done things to her that   would have made your head spin used to remain on  the fringes. But nowadays, people holding these   views can find each other instantly. When they  realize that they're not alone, then they become   more confident to express those views in public.  So the internet did not necessarily create these   attitudes, but it did make them more visible, more  organized, and more politically relevant. And this   can explain why many of my friends that spend a  lot of time online feel that people on average   have become more extreme, even though research  shows us that they did not. However, again,   this is not the full story. You see, cable TV and  social media spread pretty evenly worldwide. Yet,   right-wing populism patterns vary drastically  across countries. Not every country has ended   up with Americanstyle media polarization.  So this brings us to our conclusion. Which   narrative is the most convincing? Well, one  thing it's clear, it's not narrative number   three. People are not becoming more racist  or authoritarian over time. Anti-democratic   and anti-immigration sentiment did not just  appear out of nowhere in the last decades.   There's always been a slice of a population that  feels this way, which means there's always been   some baseline demand for right-wing populism.  But for the other narratives, given that country   trajectories are so different, the different  right-wing populist surges can probably best   be explained by combining these three other  narratives. First, there was rising inequality,   austerity, the fallout from the financial crisis.  All of that shook people's trust in institutions.   This could explain populist surges in the American  Midwest or Eastern Europe. On the other hand,   populist surges in relatively equal countries like  Norway and Denmark probably have more to do with   a political disconnect on cultural issues. And  finally, the rise of social media and cable TV   probably acted like an amplifier, giving populist  parties that represent 10 to 30% of the population   the power to take over several countries. So yeah,  all of these three explanations are supported by   the evidence. On their own though, there are  too many contradictions to believe them. But   taken together, it becomes clear that right-wing  populism will likely surge back again and again   as long as inequality remains high. Politicians  do not listen to voter preferences on culture and   immigration. And number three, as long as social  media gives populist an algorithmic edge. But   yeah, that's my take. What do you think? Let me  know in the comments below. And if you find this   topic as fascinating as I do, I highly recommend  that you check out the excellent analysis by our   advertising sponsor, The Economists, which I  always check out for the research process of   my videos. For this episode in particular,  I learned a lot from their analysis on how   the Danish social democrats have shifted  right on immigration to counter the far   right. Or if you also care about macroeconomic  stability, I encourage you to take a look at   this article where they explore how efforts  to be fiscally responsible and reduce budget   deficits can sometimes end up benefiting populist  parties. And finally, for a broader overview, I'd   strongly strongly recommend this article on what  populism actually means. As these examples show,   The Economist delivers insights that help you  see the bigger picture and think for yourself.   This is why I almost always rely on their analysis  for my research and it's why I highly recommend   that you subscribe and that's actually now  more interesting than ever given that they   are offering a special 35% discount for money and  macro viewers. Now, whether you prefer their daily   journalism in the Economist app, or you are like  me and enjoy catching up on the global economy   over the weekend with a nice cup of coffee and the  print edition, you'll always stay on top of the   latest global developments and support journalism  that values factual information, integrity, and   an independent point of view. So, don't miss out.  Click the link in the description or top comment   below or head over to ecomus.com/moneymackro  to claim your exclusive 35% discount today.

The populist surge in the west is over. This is the  end. Or is it? Actually, the experience of early   adopter populist countries shows us that this  is extremely unlikely. For example, in Austria,   populism collapsed in the early 2000s after Jörg  Haider's freedom party government turned out to   be a chaotic mess. But once again, although not  in power, the Austrian Freedom Party got the most   votes in the last election. Similarly, in Italy,  the populist Berlusconi faced a crushing defeat   after it became clear his billionaire who will  rescue the economy narrative was not working. Yet,   Berlusconi always came back. And even when he  himself did not, Italy is now again ruled by a   populist right-wing president. In fact, looking at  these graphs, we can see that the dynamic is often   the same. Once right-wing populism emerges, yes,  it often suffers crushing setbacks due to chaotic   infighting, no economic progress, and the exposure  of massive corruption, but it never really goes   away. So, right-wing populists may suffer  crushing defeats and often embarrassing ones,   but eventually they always bounce back, which  raises the question, why does populism always keep   bouncing back? Why is it not going away after all  of those broken promises? As always on Money and   Macro, we've emerged ourselves into the relevant  scientific literature and selected the four most   prevalent explanations. Narrative number one, it's  the economy stupid? Ordinary people have been left   behind. Narrative number two, right-wing populists  have a point. Mainstream politicians themselves   are the problem. They've become out of touch  on cultural issues like immigration. Narrative   number three, people have just become more racist/  authoritarian. And last but not least, narrative   number four, it's actually social media that's  to blame. That is pushing people to political   extremes. In this video, we examine the evidence  and counter evidence for each theory to determine   which of them has the most convincing explanation  for why right-wing populism keeps bouncing back.   But before solving the puzzle, we first need to  make sure we are all talking about the same thing.   That is, what is right-wing populism actually?  And how is it different from left-wing populism?   Aren't these polar opposites? Why are we talking  about them in the same breath? Well, yes and no.   This is something people often get wrong. Populism  is not at all like socialism or like conservatism.   It's not an ideology. It's a way of talking about  politics a lens through which political conflict   is framed. At its core, both left and right-wing  populism divides society into two opposing groups.   On the one hand, the hardworking people and on  the other, the corrupt elites. Populism is pretty   easy to understand. Essentially, all problems in  society are the fault of these corrupt elites. The   difference between left and right-wing populism  then is which elite group they frame as the   problem. On the left, populists target economic  elites such as rich and the corporations, the   brolicharchy of tremendous wealth, a government  of the billionaire class by the billionaire class.   On the other hand, right-wing populists target  a different kind of elite group, the cultural   elites, such as "The Brussels bureaucrats, the  Amercian bureaucrats, and the Soros network..."  but also academics or mainstream politicians  accused of ignoring ordinary people's concerns   about immigration, crime, and cultural identity.  Different enemies, same narrative. The system   has been captured by elites which no longer  represent the people and simple narratives   often come with simple solutions. So if you  believe that moneyed elites cause most problems,   you should vote left-wing populists into power  so that they can tax their wealth away. And   if you believe immigration is damaging  the economy and eroding local culture,   you should back leaders who are not afraid to defy  cultural elites and take massive actions to close   the borders. Especially the right-wing populist  story convinced a lot of people in the West in   the last couple of decades. But okay, back to the  present. Trump's remanufacturing America story is   failing. Brexit is not making Britain rich and  Orban just lost in a landslide. So why again do   we say right-wing populism will bounce back soon  enough? Well, let's start with the economic story   that should in theory empower left-wing populists.  But surprisingly in reality often empowers the   right. Narrative number one, people vote populist  because they are economically left behind. Okay,   this map shows GDP per capita per German state.  And this map shows where people mostly voted   for the right-wing populist party AFD. This is  not a coincidence. When we look at leaders like   Marine Le Pen and Viktor Orban, we see that they  often struggle to gain traction in thriving rich   urban centers, but they dominate the vote  in rural and declining areas. By now, it's   pretty well known that the hyper globalization  period from the late 1970s to early 2000s created   winners and losers. Chinese workers were  able to produce for the rest of the world,   massively improving their own living standards.  Meanwhile, in the west, highly educated people   in big cities in rich countries were also able to  export services to more and more people globally,   which translated into higher wages for them.  But take a look at this graph. The hourly wage   corrected for inflation for a US worker without  higher education is very similar today to what it   was in 1965. So while during the period of hyper  globalization the US economy kept growing only   the well-educated cultural and moneyed elites have  actually seen their purchasing power go up while   many ordinary people were indeed left behind.  It's not hard to see how this can translate   into politics. If you feel the system no longer  works for you and the same political elites keep   defending it. Of course you will start looking for  alternatives and that is exactly what we see in   the data. Regions more exposed to Chinese import  competition were more likely to support Brexit,   Trump, and the AFD in Germany. Areas more exposed  to automation tend to show stronger support for   populist parties. However, while this evidence  looks convincing, it has three big problems.   First, if we look at people in countries that  truly lost a lot of their income between 1985   and 2015, we would expect right-wing  populism to have surged in countries   like Spain and Portugal. But actually, relatively  fortunate and less unequal countries like Norway,   Finland, Switzerland, and Austria have  seen far bigger right-wing populist surges.   The second problem with the explanation is  once we move from regions to individuals,   the story weakens. As research by political  science professor Larry Bartles shows, economic   disaection turns out to be a poor predictor  of whether someone votes or identifies with   right-wing populism. It is far less informative  than attitudes towards immigration, trust in   political institutions, or broader cultural  values. In other words, yes, many people in left   behind areas vote for the populist right. But if  you want to actually predict whether someone will   support the populist right, you get much closer  by asking what they think about immigration or   whether they trust politicians than by asking them  about what they think about the economy. The third   problem is if populism is about regular working  folks wanting an equal share of the economic pie,   wouldn't it make sense to vote for populists  who want to redistribute wealth, so those on   the left? However, if we look at the data, we  see the opposite. It's especially right-wing   populism that is surging in the West as inequality  increased. So, could it be that people are fooled   by the populist right to vote against their own  interest? That's a story that we hear a lot and it   could be true but actually and it may shock some  of you hearing this from me in this case maybe   economics is not everything. So it's time for this  economist here to step outside of his comfort zone   with narrative number two. Right-wing populism  is actually about out of touch cultural elites.   Okay. The argument goes a little bit like this. No  voters are not confused. The real people who are   confused are the cultural elites. I really believe  that Westminster, the intellectuals, the liberal   elites just don't get it. Take a simple question.  Should immigrants adapt to the customs of the   country that they move to? Large majorities of  the public say yes. This holds all across Europe,   Britain, Denmark, Germany, and Sweden. But among  political elites, only those in Denmark agree with   that view. On the other hand, in Germany, all  politicians except for the populist right, and   yes, that even includes conservative politicians,  are more liberal on immigration than the average   voter? Or take the question, should race be taken  into account in college admissions? Only a third   of Americans agree with this view. Yet mainstream  Democrat leaders from Hillary Clinton to Joe Biden   have consistently supported raceconscious policies  and criticized court rulings against them. This   disconnect between what the public wants and  what politicians want on the other hand is what   political scientists call a representation  gap. As you can see here in this FT graph,   politicians and voters are roughly aligned when  it comes to economic issues like redistribution   and capitalism. Left-wing politicians are close  to leftwing voters and right-wing politicians   are close to right-wing voters. But when it  comes to topics like immigration and crime,   politicians are on average far more to the left  than the average voter. So when the political   debate is dominated by economic issues like  taxes and redistribution, well in those cases,   mainstream parties are relatively safe because  they champion what voters actually want. But   when cultural issues move to the center of the  debate, the dynamics change. If voters feel that   their basic cultural preferences are ignored  or even worse, dismissed or talked down upon,   that gap becomes a big opportunity for right-wing  populists to emerge. The clearest example of this   is the 2015 European refugee crisis. As images  of large numbers of asylum seekers and irregular   border crossings dominated the news, immigrations  shot up the list of public concerns. People did   not necessarily purely react to immigration  itself, but they did react strongly to the   perception of chaos and loss of control. And when  that perception takes hold and politicians are not   reacting to it, then right-wing populists gain a  big advantage. Research by James Denison and Andre   Fer Gues shows that as immigration becomes more  salient, support for populist right-wing parties   rises right along with it. Not perfectly, not  everywhere, but consistently enough to matter.   At the same time, as citizens, we're like, "Oh  my goodness, look at what's going on here. Our   societies are changing dramatically. We're in the  midst of this economic stagnation where, you know,   I feel like I have to compete for jobs. I have to  compete for public goods." And at the same time,   traditional establishment parties are inviting in  tons of immigrants, allowing huge asylum flows,   telling me that if I worry about this or I'm  concerned about this, I'm a racist or a xenophobe.   So, interestingly, when populist right-wingers say  that cultural elites like mainstream politicians   are out of touch, data shows us that they are  correct. Not when it comes to economics, but when   it comes to social issues like immigration and  crime. Yes, the general public is significantly to   the right of most politicians. But as we've seen,  there's only one exception. In Denmark, the Social   Democrats adopted stricter immigration policies  themselves, which coincided with a decline in   support for the populist right from over 20% to  just below 10%. But okay, that's still 10%. So,   there must be more going on. But this was still a  crucial story. In many leftwing circles, though,   the diagnosis is very different. The problem they  argue goes far beyond out of touch elites. No,   it points to the people. Narrative number  three, people are simply becoming more   racist. And honestly, this is not super popular in  academic circles. This explanation, it's actually   an argument that I often hear from friends, so  I thought it was important to address it here.   Nonetheless, many of them watch extreme takes  from populist right-wingers and their supporters.   They scroll through online comment sections and  come away thinking something genuinely dark is   happening. People are becoming evil. People are  stigmatizing entire Muslim communities as violent.   Politicians are showing authoritarian tendencies.  There are conspiracies about Brussels bureaucrates   or George Soros erasing Western civilization. It  can feel like people are forgetting the lessons   of the past, growing tired of democracy and  becoming more xenophobic and conspiratorial. But   is it actually true? Are people really becoming  less satisfied with democracy and more hostile to   immigrants? Well, according to political scientist  Larry Bartles, the answer to that question is   clear. No. Absolutely not. Based on survey  responses from more than 300,000 Europeans, he   finds that they have not become significantly more  illiberal or more hostile to immigration over the   past two decades. In fact, support for European  integration has remained fairly stable throughout   the 21st century. Level of trust in parliament and  politicians, satisfaction with democracy and even   attitudes towards immigration. They have remained  broadly stable over time and have even improved a   little. Of course, there are some exceptions. For  example, Spanish citizens became much more hostile   to democracy after the massive economic crisis  in 2008. However, satisfaction with democracy   has been rising in Finland, Sweden, and Denmark  at a time when the populist right became a major   player in those countries. So overall, no, it does  not appear that people are becoming more racist or   authoritarian, but I do understand why more and  more people feel this way. The YouTube shorts   algorithm sometimes recommends me these nice  videos of how US presidents used to interact with   one each other. I think Mr. Nixon is an effective  leader of his party. The question before us is   which point of view and which party do we want to  leave the United States? I agree with Senator K.   And if we compare that to some of the stuff that  Trump says these days, sleepy, crooked Joe Biden,   where I could stand in the middle of Fifth Avenue  and shoot somebody and I wouldn't lose any voters.   Okay, it's like incredible. Then it's clear that  something has changed. The public is willing   to accept far more uncivilized language. And  actually, this is not just an American phenomena.   Right-wing populist leaders everywhere use  increasingly inflammatory language. So why   does the public increasingly accept that type of  behavior if they themselves did not become more   authoritarian? Well, this brings us to narrative  number four. Blame social media. Social media is   polarizing us. And there's really good evidence  that this is actually happening in two ways.   First, as you can see here, traditional media like  newspapers and radio, well, they gave a voice to   everyone, the hard left, the moderates, and the  hard right. However, as you can see here, cable   TV is already quite a bit more biased towards  both extremes. And on social media, well, oh boy,   the algorithms really love to serve us both hard  left and hard right content, while the moderate,   nuanced, more boring voices are buried in the  algorithms. To explain this, psychologist J.   Vanbo describes four dark laws that drive online  engagement. Negativity, extremism, us versus   them thinking, and moral emotional language. In  other words, content that is more negative, more   extreme, more tribal, and more emotionally charged  is more likely to grab attention and spread. This   means that expressing outrage, attacking the other  side, or using words like disgusting or unjust   or just super simple narratives will consistently  outperform more balanced or nuanced views. So, if   you are on social media a lot, it makes sense that  you will start believing that people are angrier,   more polarized, and more extreme than that they  actually are. But it gets worse. The second way   that social media is polarizing us other than  amplifying extreme voices is by connecting extreme   voices. You see, views that were once socially  taboo like I could have done things to her that   would have made your head spin used to remain on  the fringes. But nowadays, people holding these   views can find each other instantly. When they  realize that they're not alone, then they become   more confident to express those views in public.  So the internet did not necessarily create these   attitudes, but it did make them more visible, more  organized, and more politically relevant. And this   can explain why many of my friends that spend a  lot of time online feel that people on average   have become more extreme, even though research  shows us that they did not. However, again,   this is not the full story. You see, cable TV and  social media spread pretty evenly worldwide. Yet,   right-wing populism patterns vary drastically  across countries. Not every country has ended   up with Americanstyle media polarization.  So this brings us to our conclusion. Which   narrative is the most convincing? Well, one  thing it's clear, it's not narrative number   three. People are not becoming more racist  or authoritarian over time. Anti-democratic   and anti-immigration sentiment did not just  appear out of nowhere in the last decades.   There's always been a slice of a population that  feels this way, which means there's always been   some baseline demand for right-wing populism.  But for the other narratives, given that country   trajectories are so different, the different  right-wing populist surges can probably best   be explained by combining these three other  narratives. First, there was rising inequality,   austerity, the fallout from the financial crisis.  All of that shook people's trust in institutions.   This could explain populist surges in the American  Midwest or Eastern Europe. On the other hand,   populist surges in relatively equal countries like  Norway and Denmark probably have more to do with   a political disconnect on cultural issues. And  finally, the rise of social media and cable TV   probably acted like an amplifier, giving populist  parties that represent 10 to 30% of the population   the power to take over several countries. So yeah,  all of these three explanations are supported by   the evidence. On their own though, there are  too many contradictions to believe them. But   taken together, it becomes clear that right-wing  populism will likely surge back again and again   as long as inequality remains high. Politicians  do not listen to voter preferences on culture and   immigration. And number three, as long as social  media gives populist an algorithmic edge. But   yeah, that's my take. What do you think? Let me  know in the comments below. And if you find this   topic as fascinating as I do, I highly recommend  that you check out the excellent analysis by our   advertising sponsor, The Economists, which I  always check out for the research process of   my videos. For this episode in particular,  I learned a lot from their analysis on how   the Danish social democrats have shifted  right on immigration to counter the far   right. Or if you also care about macroeconomic  stability, I encourage you to take a look at   this article where they explore how efforts  to be fiscally responsible and reduce budget   deficits can sometimes end up benefiting populist  parties. And finally, for a broader overview, I'd   strongly strongly recommend this article on what  populism actually means. As these examples show,   The Economist delivers insights that help you  see the bigger picture and think for yourself.   This is why I almost always rely on their analysis  for my research and it's why I highly recommend   that you subscribe and that's actually now  more interesting than ever given that they   are offering a special 35% discount for money and  macro viewers. Now, whether you prefer their daily   journalism in the Economist app, or you are like  me and enjoy catching up on the global economy   over the weekend with a nice cup of coffee and the  print edition, you'll always stay on top of the   latest global developments and support journalism  that values factual information, integrity, and   an independent point of view. So, don't miss out.  Click the link in the description or top comment   below or head over to ecomus.com/moneymackro  to claim your exclusive 35% discount today.