Friday’s Munk debate — The Rise of Populism: Be it resolved, the future of western politics is populist not liberal: Stephen K. Bannon, David Frum — received quite a bit of attention. As Frum put it “… [populism is] the most important, the most dangerous challenge that liberal democratic institutions have faced since the end of communism …" It’s an important topic, one worthy of better understanding and not shying away from.
In the end, 72% of the audience of the debate sided with Frum. In my opinion, Bannon might have won the emotional debate (he is a smoother speaker) and that is what makes him dangerous. Bannon’s arguments were, in my option, both contradictory and impractical. However, that is not to say that a “Trump with a smile” couldn’t find a compromise position.
Bannon situated the problem with the “little guy”: they have borne the brunt of the failures of international trade deals (globalization), the economic crisis (of 2008), and the costs of the Iraq/Afghan wars (budget deficit and death), while the elites have orchestrated events and outcomes to their benefit.
Frum accepted that the “little guy” has suffered, and that successive US Administrations have failed to resolve these issues. However, he did not confirm agreement on the role of the elites in directing the outcome.
Through the debate it became apparent that the difference lies in their proposed policies and the method of execution. Bannon wants to deconstruct existing institutions, Frum wants to repair them.
In terms of execution: first, Frum accused Trump of being racist, possibly facist. While Bannon disagreed, he conceded Trump is an “imperfect instrument” . Second, Frum laid out a modus operandi of co-operation (with other governments) vs. dominance and bullying. Bannon’s approach takes the position of the primacy of the nation state, to ensure the interests of their citizens, and the destiny of the nation (culture, borders …) vs. dilution from external authorities (“Bad” Trade Agreements, Euro Zone, WTO, “Globalization”).
In wrapping up the debate, Frum asked us not to despair as democracy has survived similar challenges in the past, saying “the cruel always think the good are weak” but in the end “something positive will always defeat something dark.” Bannon, on the other hand, spoke of the inevitability of the outcome: “the only question is whether it will be populist nationalism or populist socialism.”
Both their arguments, however, exposed gaps. Frum never really addressed the class issue (elite vs. the little guy) but only agreed to the larger point that there are problems. He never offered how the Republican and Democratic establishments would organize to resolve the problems. This problem has evolved over that last 30+ years; it shouldn’t be a surprise. Frum did not offer the case that the establishment could get past the impasse; an approach to getting past their track record of broken promises to resolve the issues. Frum never took ownership. Bannon took ownership to solve the problem.
Bannon’s proposal, however, suffers contradictions as well. His attack on the elite is an argument for "economic democracy”: that we all have the opportunity to share in the fruits and benefits of growth. Yet, he is a proponent of capitalism; when did capitalism ever really help the little guy? It is a system that privileges those with the capital. As he points out in his opening statement, the little guy is without capital and was thus excluded from the economic gains of the last 10 years. Capitalism is an economic system, not a political one. Capitalism is for business, democracy is for people. In the best case, capitalism and democracy have only conflicting objectives; worse case, they are incompatible. Without guidance (pressure) from governments to contain business practice to operate within acceptable social limits, people will suffer. Why do we have pollution laws? Why do we have safety laws? Why do we have government services? Why do governments define standards?
The core challenges faced by the little guy are broadly recognised and agreed to, not just in the US, but in many parts of the world. However, different nations have responded differently. Canada has a stronger safety-net than the US, which has tended to soften the blow. Furthermore, Canada has a record of offering compensation for those negatively impacted by trade deals. Similarly in Europe.
These [economic] policies — this safety net — is viewed by many is the US as “socialism”, yet it is these little-guy-oriented considerations that Bannon is calling for. And this to me is the challenge. Capitalism is so ingrained into American society that any move towards social programs is viewed as the slippery slope to communism. Socialism erodes the profitability of business and tethers capitalism with the unwieldy ball and chain of taxes and controls.
To achieve the outcomes Bannon is looking for, through deconstruction, strikes me as impractical. The American system is geared to making small steps; big steps are difficult as finding a consensus becomes all that much more difficult.
But there is another problem, that Frum touched on, that lies in Trump’s execution. His actions and statements challenge trust and co-operation. He is disingenuous: Trump is leveraging the issues faced by the little guy, that many can agree to, to implement an agenda that goes beyond what is required to solve the problem, to implement policies that many charge as racist, isolationist; internationally he is seen as a bully.
While specific to the United States, until elected officials are decoupled from the influence of financial backers (i.e., the elites) and the electoral system is retuned to make politicians more accountable to voters’ demands (i.e., remove gerrymandering) it is hard to see that the conditions will align to benefit the little guy.
Bannon’s opening remarks were excellent, offering a good overview of his perspective. His departure point was what he referred to as the “inciting incident,” the financial failure of 2008:
 By calling Trump an “imperfect instrument” Bannon suggests a distinction between populism as a theory or strategy and Trump as an executioner.
 This in contrast with Trump’s regular comments on how well the [stock] markets are doing, and how that is benefiting the little guy.
 This generalization implies the elites are a single coherent group with one mind. Was the decline truly managed or was it simply incompetence or a chain of un-co-ordinated actions with limited oversight? However, it is fair to say that the de-regulation that preceded and thus was an enabler of the 2008 crash was pressed by business (who may be termed the elites).
 While the objectives of the ‘Party of Davos’ may be to decouple the elites from the middle / working classes, I submit this is nothing new. Has not the subjugation of the little guy gone on since Roman times and before? May be the relevant point is that this is something that we, as a mature society, want to change.
 The focus on manufacturing jobs seems short-sighted to me as many of these jobs will be replace by automation. Why not focus on jobs of the future?
 Capitalism is fundamentally undemocratic; it puts power into the hands of the capitalist, not the non-capitalist … the people without capital
 Yet, it is important to recall that capitalism, by its nature, shifts between boom and bust.
 Given the nature of capitalism, its ebbs and flows, a financial crisis is alway in our future.