One of the most puzzling features of the world in the aftermath of the financial crisis is that so far, populism has taken primarily a right-wing form, not a left-wing one.There's more:
In the United States, for example, although the Tea Party is anti-elitist in its rhetoric, its members vote for conservative politicians who serve the interests of precisely those financiers and corporate elites they claim to despise. There are many explanations for this phenomenon. They include a deeply embedded belief in equality of opportunity rather than equality of outcome and the fact that cultural issues, such as abortion and gun rights, crosscut economic ones.
But the deeper reason a broad-based populist left has failed to materialize is an intellectual one. It has been several decades since anyone on the left has been able to articulate, first, a coherent analysis of what happens to the structure of advanced societies as they undergo economic change and, second, a realistic agenda that has any hope of protecting a middle-class society.
The main trends in left-wing thought in the last two generations have been, frankly, disastrous as either conceptual frameworks or tools for mobilization. Marxism died many years ago, and the few old believers still around are ready for nursing homes. The academic left replaced it with postmodernism, multiculturalism, feminism, critical theory, and a host of other fragmented intellectual trends that are more cultural than economic in focus. Postmodernism begins with a denial of the possibility of any master narrative of history or society, undercutting its own authority as a voice for the majority of citizens who feel betrayed by their elites. Multiculturalism validates the victimhood of virtually every out-group. It is impossible to generate a mass progressive movement on the basis of such a motley coalition: most of the working- and lower-middle-class citizens victimized by the system are culturally conservative and would be embarrassed to be seen in the presence of allies like this.
Whatever the theoretical justifications underlying the left’s agenda, its biggest problem is a lack of credibility. Over the past two generations, the mainstream left has followed a social democratic program that centers on the state provision of a variety of services, such as pensions, health care, and education. That model is now exhausted: welfare states have become big, bureaucratic, and inflexible; they are often captured by the very organizations that administer them, through public-sector unions; and, most important, they are fiscally unsustainable given the aging of populations virtually everywhere in the developed world. Thus, when existing social democratic parties come to power, they no longer aspire to be more than custodians of a welfare state that was created decades ago; none has a new, exciting agenda around which to rally the masses.
There are already abundant signs that such a phase of development has begun. Median incomes in the United States have been stagnating in real terms since the 1970s. The economic impact of this stagnation has been softened to some extent by the fact that most U.S. households have shifted to two income earners in the past generation. Moreover, as the economist Raghuram Rajan has persuasively argued, since Americans are reluctant to engage in straightforward redistribution, the United States has instead attempted a highly dangerous and inefficient form of redistribution over the past generation by subsidizing mortgages for low-income households. This trend, facilitated by a flood of liquidity pouring in from China and other countries, gave many ordinary Americans the illusion that their standards of living were rising steadily during the past decade. In this respect, the bursting of the housing bubble in 2008–9 was nothing more than a cruel reversion to the mean. Americans may today benefit from cheap cell phones, inexpensive clothing, and Facebook, but they increasingly cannot afford their own homes, or health insurance, or comfortable pensions when they retire.I agree with Fukuyama that there's currently a void in left wing American politics right now. I made this case back when the Occupy Movement first got started. I certainly hope to see a sensible and intellectually sound left wing emerge, but not if it mutates into a populist beast akin to the Tea Party. Sadly, I'm not convinced this is going to happen any time soon -- and I'm almost certain that a populist left will eventually rear its ugly head, perhaps spawned by the Occupy events earlier this year. So one has to ask what's better: a poorly defined and ineffectual left wing (like we have now), or a populist one?
A more troubling phenomenon, identified by the venture capitalist Peter Thiel and the economist Tyler Cowen, is that the benefits of the most recent waves of technological innovation have accrued disproportionately to the most talented and well-educated members of society. This phenomenon helped cause the massive growth of inequality in the United States over the past generation. In 1974, the top one percent of families took home nine percent of GDP; by 2007, that share had increased to 23.5 percent.
Trade and tax policies may have accelerated this trend, but the real villain here is technology. In earlier phases of industrialization -- the ages of textiles, coal, steel, and the internal combustion engine -- the benefits of technological changes almost always flowed down in significant ways to the rest of society in terms of employment. But this is not a law of nature. We are today living in what the scholar Shoshana Zuboff has labeled “the age of the smart machine,” in which technology is increasingly able to substitute for more and higher human functions. Every great advance for Silicon Valley likely means a loss of low-skill jobs elsewhere in the economy, a trend that is unlikely to end anytime soon.