Three Connections between Rising Economic Inequality and the Rise of Populism

This paper suggests three ways in which rising economic inequality can explain the rise of populism, complementing non-economic explanations. Economic inequality is associated with cyclical economic crises. Major crises unfreeze political allegiances and provide an opening for populists to succeed electorally. Extreme economic inequality chimes with the populist credo that ‘the people’ are pitted against a self-serving, if not corrupt, ‘elite’. Populists portray extreme inequality as evidence that the political establishment has lost democratic legitimacy. Major changes to Western economies have lowered people’s net economic benefit in ways poorly measured by standard metrics of income inequality. Populist rhetoric often addresses the holistic decline of prosperity or economic certainty, and part of the increasing vote share for populists is from economically marginalised communities. Non-economic factors explain many aspects of populism and nativism. But economic inequality helps explain rising populism and should not be overlooked in any comprehensive analysis.