Sunday, October 29, 2023
The horseshoe theory of politics
I believe that capitalism is the best economic system for the overall creation of wealth. Unfortunately capitalism also completely sucks at distributing the created wealth, having a strong tendency to give a too large share to the already rich, and a too small share to people who worked hard to create that wealth. If we simply look at the numbers of what has happened since capitalism basically beat communism and both the former Soviet Union and China became mostly capitalist, we notice that there are winners and losers: The winners are the previously extremely poor people in previously communist countries, and the already rich in previously capitalist countries. The losers are the working people in previously capitalist countries. The number of people living in extreme poverty has fallen, which is obviously good news. But real wages in rich countries like the USA have stagnated for decades. And since the recent rise in inflation, those real wages have been falling. We have a cost of living crisis in many first world countries, and housing has become unaffordable in many places.
For all the reasons discussed above, there are a great many people with moderate incomes living in first world countries which are unhappy with the state of the world, and the state of politics as usual in their country. And so they are drifting away from centrist politics to more extremist political opinions, left or right. And, surprisingly, it turns out that it doesn't really matter whether it is left or right. That is the horseshoe theory of left-right politics: The extreme ends are actually closer to each other than they are to the center.
One interesting example of this is the closeness of Trump voters and Bernie Sanders voters. When asked at a MAGA rally who their second choice after Trump would be for president, a surprising number of people answer Bernie Sanders. Because the factor of being "anti-establishment" is much more important than classical left-right classifications.
This is currently causing some turmoil in Germany, where the extreme left party, whose name is "The Left", is splitting up. "The Left" was an alliance between West German leftists for whom the social democrats weren't radical enough, end East German ex-members of the SED, the party that ruled East Germany until reunification. The people who are splitting off to a not yet named new party believe that "The Left" lost their way in being too preoccupied with identity politics, and not doing enough for the working class. And there is at least a kernel of truth in here, in that working class people tend to be economically left-wing, but socially conservative. And so the interesting news is that 30% of the people who previously voted for the extreme right party AFD (extreme right as in about as right-wing as a Trump voter) could imagine voting for the new extreme left party instead.
I am politically a centrist. The current trend of centrist parties losing more elections than they are winning against extremist and populist parties worries me. But I think that is to a large extent the fault of the centrist parties: In a democracy you need economic policies which satisfy the majority of the people, and that is the people who work for a living. Centrists over the last few decades have frequently failed these people, and are now reaping what they sowed. A person without a college degree who is working 40+ hours a week needs to have a roof over his head, food on the table, and be able to pay for both essentials like heating and at least a bit of non-essential disposable spending. And those who fall below this level of income will tend towards extremism.