The populist temptation in South Africa and elsewhere - Helen Zille

WCape Premier warns that whites fulfil all the criteria for becoming a scapegoat for contemporary SA’s problems and policy failures

Analysing Populism: Keynote Address to the 60th Liberal International Congress

NOTE TO EDITORS: The following is a speech extract of the address delivered by Helen Zille at the Liberal International 60th Congress in Mexico City, last week.

My task today is to deliver a keynote address, to kick-start the panel discussion on Populism.

As with many concepts, it is easier to say what populism isn’t, than what it is.

Populism is not a specific political philosophy or ideology. It usually positions itself at the extremes of political debate, either on the left or the right. Left wing populism is often disguised by labels that make it sound as if it is underpinned by a coherent philosophy, such as “21st Century Socialism”, a phrase often used to describe populism in parts of Latin America. Right wing labels have less moral appeal because they usually take the form of racial and ethnic nationalism. But over time, populism of the left and right become increasingly indistinguishable from each other. For example, xenophobia sits comfortably with populists of all persuasions. So does creeping power abuse, and the undermining of independent institutions.

Which brings me to attempt a definition.

Populism is a political response (usually mobilised by a charismatic individual) to a context of widespread public grievance, and a pervasive sense of disempowerment. It has the following characteristics:

It gives the grievance a powerful public voice.

It divides society into “victims” and “villains”, “saviours” and “scapegoats”.

It absolves individuals from having to take responsibility, either for contributing to their unsatisfactory situation, or for helping to resolve it.

It often evokes nostalgia for a mythical past, when the source of the grievance was not there.

It frames debate on issues in absolute and polarising terms: good vs evil; us vs them; “four legs good, two legs bad”.

Populism flourishes on conspiracy theories, conjuring up sinister forces seeking to undermine people’s interests.

It looks for simplistic solutions to complex problems.

It avoids finding pragmatic, “real world” solutions through negotiation and compromise.

It is intolerant of opposing views, and seeks to demonise alternative arguments.

It elevates leaders above institutions.

It creates (and requires) a context of clientelism, neopatrimonialism or “Bigmanism”.

A feature of 21st Century populism is that its leaders tend to come to power through constitutional and democratic means, via elections, not coup d’etats. They then implement policies that erode the very institutions that underpin the democracy they claimed to champion.

That is why established democracies, with strong, independent and consolidated institutions that hold leaders accountable, are much less prone to populism than developing democracies. A feature of established democracies is inclusive institutions, that serve (and are valued by) the population at large. Developing democracies are often characterised by extractive institutions that enrich and entrench the power of a populist leader and his network (who justify centralised control in the name of “the people”).

The irony at the heart of populism is that individuals sacrifice their agency and autonomy to a charismatic leader rather than build the institutions (such as an independent judiciary, and open economy) that are the only guarantor in the long run of defending their rights and extending their opportunities.

And when the leader inevitably fails to fulfil the hopes and aspirations he inspired, he protects himself from accountability by capturing the very institutions that are the real conduit of people’s power. 

An example of this is the situation in Zimbabwe. Robert Mugabe came to power constitutionally, in an election, promising to transform people’s lives and circumstances. He embodies all the characteristics of the populist leader listed above. When his populist policies resulted in the enrichment of a small, politically-connected elite, while destroying the economy and impoverishing millions of people, they recognised their “emperor” was naked. But when they tried to remove him from office in the same way they had elevated him to power (ie through their vote), it was too late.

By that stage he had “captured” all the independent institutions, from the police, to the electoral commission, and the judiciary, turning them into extensions of his power abuse. These institutions protected the power of the “big man” and his network, not the rights of individual citizens. Elections were repeatedly rigged to keep Mugabe in office, and now the 91-year-old autocrat is seeking to ensure that he is succeeded by his much younger wife, Grace.

People usually do not initially realise the implications of sacrificing their power to a populist leader, who inevitably turns against them when his power is threatened. The ultimate irony is that the real victims of populism are precisely those that populist leaders promise to empower. This is well described in the excellent FNF publication, edited by Birgit Lamm, on populism in Latin America.

Populism can be well disguised, not only by democratic trappings (such as elections), but by economic conditions, such as the recent commodities boom, that provided the fiscal underpinning of populist regimes in South America. The most obvious example is Venezuela, where “Chavism” was made possible by oil revenues at the height of the boom. The reliance on this single commodity to drive economic growth and fund an unsustainable welfare-state model created the conditions for “Dutch Disease”.

Oil exports inflated the value of the currency, making other economic sectors uncompetitive. Exports shrunk while imports grew. The politically connected elite became the primary beneficiaries of the oil windfall, while the poor were mollified with welfare hand-outs, until the boom ended. When the oil price dropped, the rest of the economy was in tatters and unable to support the populist agenda.

There has been a clear exception to this pattern. Norway skilfully used its unanticipated oil windfalls to invest in development, infrastructure, institution-building and emerging economic sectors. There are three factors that made this alternative path possible. Firstly, before the discovery of large oil reserves, Norway already had a strong middle class, built on a culture of personal responsibility and self-reliance.

There was no need for populist “hand-outs” (nor any substantial demand for them) in a country that, ironically, offers some of the most generous welfare benefits in the world to those who need them. Furthermore, Norway has strong, inclusive institutions, (spanning everything from the justice system to education) whose benefits are apparent to the people as a whole, who would not tolerate any leader or party seeking to undermine them.

Ironically, Norway’s welfare system might, in many other contexts, be labelled “populist”. But it is sustainable because the predominant culture assumes that self-reliance, financial independence and productivity are essential for people to live lives they value. In other words, the welfare system is sustainable in a country where the majority of people are educated and skilled -- and regard it as something of a stigma to be “on welfare”. 

This hit me very strongly when I visited Norway, and was taken around an apartment block for homeless people. These were beautiful apartments, furnished and fitted with all modern appliances and home comforts. 

The next day I had a meeting with the Minister responsible for Housing. I asked her why anyone in Norway would want to pay a fortune to buy their own house and furniture if the state provided free housing of such a high standard. She battled to understand my question at first, and when I had explained it again, she replied: “Surely, we have to take it as a given that people would want to pay for their own housing and have some self-respect.” 

Where this assumption is taken “as a given”, it is possible to run a generous welfare system, sustainably. There have been signs of erosion of this ethos, which puts this generous welfare system at risk. But in the main, it continues to be underpinned by a strong, hard-working middle class, with sufficient limitations on abuse to make it viable.

So an important question for us to discuss is this: is it possible for emerging democracies with developing economies, to avoid the trap of populism (in its various manifestations, including racial nationalism) when popular demands and expectations are so high, and poverty so widespread?

We have to address this question acknowledging that here is an additional complexity in the debate. Often, people do have legitimate grievances rooted in historical injustice and dispossession. In a country like South Africa where an oppressive state dispossessed people on the basis of race, while denying them agency to change their circumstances, it is understandable that people now look to the state for restitution and opportunity -- again on the basis of race. 

It is easy to give deep-seated historical grievance a contemporary face. There is sufficient historical truth to the accusation that “whites” are responsible for black oppression and dispossession. These broad-brush racial generalisations are anathema to liberals, who believe that each individual should be judged in their own right, rather than be labelled as a representative of a “collective” on the basis of a physical attribute (such as colour).

However, there is sufficient basis to this generalisation to make it easy to mobilise a populist agenda on the basis of race in South Africa. Whites fulfil all the criteria for becoming a scapegoat for contemporary South Africa’s problems and policy failures -- just as “the British” remain the scapegoat for populist racial nationalism in Zimbabwe, 35 years after independence.

Unlike developed democracies, countries in sub-Saharan Africa tend to have a very fragile middle class. Poverty and inequality remain the subcontinent’s primary problems. The difference between the racial/ethnic populists, on the one hand, and liberals, on the other, is NOT disagreement about the problem (we all agree it is poverty), but about the solutions. We reject “populist” solutions that lead to the “capture” of state institutions by the ruling elite to defend their concentration of power, cronyism, corruption and self-enrichment, behind a veneer of populist rhetoric, welfare payments, and food parcels at election time. It is the patronising modern equivalent of “bread and circuses” and will have the same result, unless liberals can find sufficient traction to mobilise support for sustainable solutions to poverty. 

People find our solutions challenging for a number of reasons. They are unattractive to those who eschew the role and responsibility of each individual in improving their life circumstances. But liberals in developing countries also have ourselves to blame. We tend to default to analysing problems and their solutions, often in esoteric terms, rather than demonstrating that we really care about the problems of poverty, and that we can offer effective policy solutions. We fail to convince people that all our proposals will ensure lasting improvements to peoples’ lives, and that we also have hearts, not only heads. Too often, we fail to persuade voters to give us a chance to produce sustainable results.

We must face the fact that we share responsibility for the grossly inaccurate popular caricatures of ourselves as coldly rational people, who do not care about the circumstances of the poor. It is essential for us to find ways of reflecting the truth -- that our policies are the only ones that can create the conditions to lift large numbers of people out of poverty.

I often wonder why it is so hard for us to focus our political discourse on job creation, especially when almost everyone identifies unemployment as our priority problem. Why do we fail to explain how jobs are created, given the fact that most people understand that a proper job is the first step on the ladder out of poverty? 

To grow jobs, we need investment; for investment we need a stable conducive policy environment, in which potential investors believe they can make a return on their risk. We have failed to argue convincingly that the best way to address the legacy of the past is through policies that encourage the kind of investment that results in rapid, job-creating economic growth. We must face the hard fact that, to reduce unemployment, jobs must fit the skills and productivity of the currently available workforce, and that we must invest heavily in developing people to gain new skills, aligned to the areas of potential economic growth.

In South Africa, we have failed to convince enough people that focusing primarily on “racial transformation” will inevitably lead to intense conflict over a shrinking pool of jobs, rather than the growth of new jobs -- which is the only foundation on which economic inclusion and genuine transformation can occur. And we have certainly failed to convince people that the state cannot solve the unemployment crisis without a vibrant and growing private sector.

Simply talking about “liberty” and “constitutionalism” won’t crack it. People understandably say: I can’t eat a constitution, or live in one. Where is my job? Where is my house? Because populist leaders have raised expectations that a democratic state can “deliver” these benefits, the people understandably demand that it does. 

Instead of regarding entrepreneurs and investors as their best allies in job creation, the ruling party, (together with some trade unions, and the unemployed) tend to regard businessmen as “the enemy”, and the unaffordable bureaucratic bourgeoisie as “friends”.

Inevitably, in these circumstances, the default is to mobilise around “identity” politics, which makes it easier to whip up grievances and target scapegoats. The only thing that is currently holding the fragile and fractured governing alliance together in South Africa, is their joint focus on race and history. Blaming apartheid and “whiteness” for the deteriorating economic situation is a diversion from the debate we should be having about policy solutions required to address the unemployment crisis. This diversion is also entrenching racial divisions, which makes economic growth increasingly elusive.

In Latin America, it is really encouraging to see progress in the opposite direction, from Venezuela to Argentina. Recent election results (and polls on likely future results) demonstrate that the correct lessons have been learnt and the pendulum is swinging back to the policies of growth, productivity, investment, skills development, and an appropriate role of the state in defending individual rights and creating opportunities (rather than manipulating outcomes in favour of the politically connected).

However in newer democracies, there is still a widespread belief that the state has a responsibility to ensure equality of outcomes (rather than opportunity), in order to redress an unjust past. Thus in South Africa, there is a serious risk that the contest for the future will be fought between the populists and the ultra-populists, who propose far more radical solutions than unsustainable welfare and subsidy programmes in a stagnant economy. The ultra-populists demand the nationalisation of mines and banks, and confiscation of property without compensation, as the solution to poverty, despite the disastrous record of such policies worldwide over the past century. They openly reject constitutionalism, market economics and non-racialism.

In contrast, many countries in Latin America learning from their own failed populist experiments following the collapse of the commodities boom, are increasingly turning to parties that promote market economies, human rights, inclusive institutions and the extension of opportunity through investment in education. If these countries in Latin America succeed in lifting substantial numbers of people out of poverty, where populism failed to do so, they will offer an important demonstration effect for many countries struggling with similar challenges.

We urgently need these examples of success.

But we also have to face some tough debates of our own. As a liberal, I do not believe that we are honest enough with ourselves about why our policies are often rejected by the poor. We must behave as if people are human beings first, not merely economic agents, units of labour, and consumers. We must distinguish ourselves from market fundamentalists, who often seem unconcerned about the indignity that unfettered free markets can create for millions of people. We need to be honest about market failures, and their role in creating the global economic crisis. We need to debate the appropriate role of the state in market regulation that can, simultaneously, enable economic growth while advancing human rights.

And in a country like South Africa (and many others) I believe we should address symbolic issues that speak volumes -- such as the gross disparities between the income of top management and the workers in the same enterprises. Whatever market justification there may be for these extraordinary differentials, we cannot just shy away from addressing (and redressing) them if we want to ameliorate the warped caricature of liberalism. We also have to face the challenge of effective and productive land reform and restitution to compensate for the injustices of the past, without destroying the agricultural sector on which we depend for food production.

It is time we worked together to counter the caricature of ourselves. We need to start by building on the two foundation stones of the liberal philosophy: the first is the freedom and dignity of each individual; and the second is an understanding of universal human fallibility. These points of departure lead to the conclusion that democracy, despite its flaws, is the only system that can empower individuals, and that strong, independent institutions are necessary as a check and balance on the concentration of power in the hands of a leadership clique. We believe that democracy is sustainable only on the basis of market economies. But within that framework there is a lot of room for debate on how best to win the war on mass poverty, and the role of the state in this process.

The people must truly believe that we are “for them” and can be trusted to be hard-working and incorruptible, while governing in the public interest, creating a secure future for everyone.

Thank you.