Daniel Hannan on Populism, the E.U., and the Long Financial Crisis Hangover - Encounter Books

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Daniel Hannan on Populism, the E.U., and the Long Financial Crisis Hangover

AN ENCOUNTER BOOKS INTERVIEW
By Ben Weingarten | February 27, 2018

British MEP Daniel Hannan discussed his thought-provoking essay in Vox Populi with our own Ben Weingarten. What follows is a full transcript of their discussion, slightly modified for clarity.

You can also listen to their interview in its entirety below. And to instantly receive Encounter Books Podcast interviews like these upon publication, be sure to subscribe.

Ben Weingarten: The term “populism” is often thrown around pejoratively. How would you define it?

Daniel Hannan: Yeah. It has come to mean something that other people like that I don’t. That’s the classic use of it. So [for example] calling for tax cuts, calling for deregulation, exposing corruption in high places, calling for a referendum, honoring a referendum result — anything that the speaker doesn’t like, but that plainly has popular support, is called populism. I think that the kind of core real definition is a sense that the people in office are governing not in the interest of the population at large, but in the interest of a minority, a political class, a particular cast. And sometimes that’s true. And when that’s true, populism can be said to be a necessary antibody. But when it’s not true, then it turns out to be empty.

Ben Weingarten: Yeah and you write something to that effect in this essay in Vox Populi, and I’ll quote, “The essential feature of all populist movements is their belief that an elite is governing in its own interests rather than that of the general population.” Given that the elite across the Western world are generally educated at similar institutions, come from similar backgrounds and inculcated in the same sort of progressive cultural and ideological milieu, should populism today almost definitionally have an anti-progressive character to it?

Daniel Hannan: It’s a very good question. It’s true that people are all educated in the same way, and this I think is what in their own minds legitimizes their belief that public opinion is sometimes wrong and ought to be overridden. Empirically, it’s very hard to stand up the idea that the elites really are smarter than the rest of us. If I think of where establishment opinion has been in my country, down the decades, all the clever people in the ‘30s knew that it was right to appease Hitler, you know? All the clever people in the ‘40s knew that it was right to nationalize industries. All the clever people in the ‘50s knew that we needed economic planning. All the clever people in the ‘60s knew that we ought to stop having streaming and setting in education, and teach everyone at the same level. And so it goes on the ERM [European Exchange Rate Mechanism], the Euro, again and again you get this kind of group think among the clever people, which turns out to be utter bunkum, the most recent example I would say being the bailouts. There was never any popular support either in the U.S. or in Britain for taking taxpayers’ money to rescue some very wealthy people from the consequences of their own mistakes. And yet every editorial, all the political parties, all the…any doubt that there’s such a thing as an establishment is dispelled when you see this. All of these people came together and said, “No, we need to do this thing in order to recapitalize the banks.” And so I think, in that sense, you’re right. The populist impulse is…I wouldn’t go so far as to say that it is conservative ’cause it’s often radical, but it is certainly not of the left. It’s generally defined against a soft left elite consensus.

Empirically, it's very hard to stand up the idea that the elites really are smarter than the rest of us.

Ben Weingarten: I’ve often held that if you want to look at what direction America is going, we can look across the ocean at what’s happened in Europe. We’re always about 10 years behind the progressive curve. And one of the things you emphasize in your essay is the extent to which self-rule and sovereignty more broadly eroded in Great Britain under the EU. Would you elaborate on the situation the British people faced…rule[d] under…an elite class from afar?

Daniel Hannan: I think it’s quite important to understand that the thinking behind the European Union is that patriotism and populism were two sides of the same coin, and it was a terribly bad and dangerous coin. The founders of the EU had come through the Second World War. In their minds, the very fact of democracy was kind of associated on some level with demagoguery and Mussolini and fascism and so on. And so they saw the European Union as a kind of inoculation against that, and they quite deliberately vested supreme power in the hands of people who are invulnerable to public opinion, so to this day, legislative and executive power in the EU are concentrated in the hands of 28 appointed European commissioners who are not answerable to anybody.

That wasn’t a design bug. That was entirely how the system was supposed to work, that was how the bacillus against populism would be entrenched. This has, of course, now, given rise to a kind of thinking where any expression of national self-interest is regarded as intrinsically wicked. And closer European integration, the elevation of powers, the transfer of powers upwards, is regarded as an end in itself, not as proportionate solution to an identified problem. So they don’t say, you know, “Here’s this problem with crime, and therefore we need to have Pan-European criminal justice mechanisms,” or “Here’s a problem with food supplies so we need to have a Pan-European agriculture system.” The unification of Europe is an end in itself because the primary goal here is the erosion of national sovereignty because that’s seen as the way that leads to ethnic hatred and war and blah, blah, blah. And it was really that that Britain voted against in 2016.

I mean, had the European Union been a club for countries to come together and sort out their differences in common and achieve collectively what they couldn’t do singly, there would be no argument, there would be no referendum. You would have to be mad to be against that. But, the plan very clearly and very explicitly was to create a kind of country called Europe with its own flag, and anthem, and passport, and driving license, and borders, and civil service and all the rest of it, in which the old nation-states would have a, kind of, subordinate or provincial status. And that’s ultimately what’s driven British-Euro skepticism from the start, and it’s why 52 percent of us voted to leave.

Ben Weingarten: Why is self-determination considered, as you termed it, “wicked,” in the case of European countries, but when it comes to the rest of the world for the people who call it wicked, self-determination is viewed as the highest virtue and moral end in and of itself?

I think it's quite important to understand that the thinking behind the European Union is that patriotism and populism were two sides of the same coin, and it was a terribly bad and dangerous coin.

Daniel Hannan: To be fair, I don’t think it is considered that way by the EU. They dislike national self-determination everywhere. They think that the rest of the world should copy the EU and form regional unions with supranational parliaments and so on. They poured a lot of money into various regional organizations to encourage this in…Central America, in Africa and so on. This is then, of course…they then turn around to say, “Look! The whole world is forming into these regional blocs so we need to follow.” When, of course, it is they who are sponsoring all these regional blocks.

I think what you’ve said is truer of the American left than of the European left, where all kinds of nationalisms are bad. I think it’s more true in the U.S. that Venezuelan nationalism is a good thing, or Nicaraguan nationalism, or Palestinian nationalism, but Western nationalism is a bad thing, and I think that that really comes down to this hierarchy of victimhood, the way in which a number of people, progressive American leftists, rank the world into a sort of pyramid of privilege, and, define your status as right or wrong, not by the intrinsic worth of what you’re doing, but by where you are on that pyramid.

I was just in California, and it was very funny. I was looking around a sort of, a reconstructed village, and you could see the moment in the wall text. The first part was about the Spanish colonization, so, of course, there the oppressor group were the Spanish, and the goodies were the indigenous peoples. And then, suddenly, the moment English-speaking people arrived on the scene, the Spanish become the good guys because they’re suddenly oppressed. Presumably, there was a moment when these were exactly the same people, but in the leftist hierarchy of victimhood, everything is defined by where you are in that power pyramid because, you know, victimhood is somehow thought to confer virtue automatically and, conversely, being a large and powerful country puts you in the wrong. And I’m afraid that in most of the encounters that Britain and America have had with the rest of the world, we’ve tended to have the technological edge, and that’s what puts us in the wrong.

Ben Weingarten: What, in your view, looking back on it now and still engaged in the fight to a large extent as well, are the both political and ideological lessons of Brexit?

Daniel Hannan: Well, the first thing is trust the people. Rather, in contradiction to the Vox Populi, Vox Dei, you know, the original poem, which was a sustained rant against democracy, actually, trusting people tends to work. The Bill Buckley line about the first thousand people chosen at random from the Boston phone book being wiser than the faculty of Harvard, by and large, that’s true. And, you can see that in what’s happened since Brexit. During the referendum, we were told, not just by Remain campaigners — which is kind of fair enough when they’re trying to make an argument during the referendum — but we were told by the IMF, by the OECD, by the Treasury, by the Bank of England, by every authority that the very act of voting “leave” would trigger an immediate economic downturn.

The governor of the Bank of England spoke about a technical recession in 2016. In fact, we grew faster after the vote than before it.

We were told that the stock exchange would collapse, it’s broken every record.

We were told that there would be another half a million unemployed. In fact, unemployment has fallen by nearly that amount.

So, the people were right and the experts were wrong. I mean, if you judge people by the hard, empirical test of, “What were they prophesying and where are we?” all of these organizations: The international think tanks, the banks, the ratings agency, they all got this wrong. And the solid, commonsensical voter who said, “Well actually, you know what? We’re a fairly big country and as long as we get the right decisions at home, we’ll be okay and it’s not really in the EU’s interest, or even in their capacity, to inflict real damage on us if they wanted to,” they turned out to be right.

in the leftist hierarchy of victimhood, everything is defined by where you are in that power pyramid because, you know, victimhood is somehow thought to confer virtue automatically and, conversely, being a large and powerful country puts you in the wrong.

Ben Weingarten: Ultimately do you think Euroscepticism will triumph on the continent? In other words, will we see the break-up of the EU? And what would be the ramifications of that? Or do you see the folks who are in power continuing to clutch ever more tightly to that power?

Daniel Hannan: Both. I think in some countries there is a more developed sense of national identity and of the historical importance of national democratic mechanisms and procedures. That’s less true in some of the kind of core founder members of the EU. So, I could see a situation where over the next 10 years some of the more Atlanticist, maritime, peripheral members kind of peel off and follow Britain into a relationship with the EU that is defined by trade rather than political amalgamation. I could see that applying to Denmark, to Sweden, maybe to the Netherlands, maybe to Ireland, maybe even to Portugal. But in a lot of the core countries, I think we are effectively in a post-national way of thinking now.

In fairness, in many of these cases the national feeling was weak in the first place. I’m speaking to you from Brussels. Belgian national identity is understandably weak. There’s no Belgian language, there’s no Belgian culture, there’s precious little Belgian history. So people here identify much more easily as Europeans because there’s a very feeble sense of nationhood. I think that’s also the case for different reasons in Germany and Austria.

So, my guess is that 10 or 15 years from now, there will still be a European Union. It’ll be much more integrated than now. It’ll have its own taxes and its own army and all the rest of it, but it will not be as large as it is now. I think some of the more outlying members will have a looser relationship with it. And do you know what? I think that’ll make everybody happier. It’ll allow the integrationist countries to get on with what they’ve always wanted to do, and it’ll allow the more free-trading, less politically integrationist countries to get what they came for which was a common market, not a common government.

Ben Weingarten: I suspect you’ll say that this varies by nation, but is there a sizable constituency broadly for a classical liberal resurgence among Europeans, writ large?

Daniel Hannan: No, I have to say at the moment there isn’t, and I attribute this mainly to the enduring after-effects of the financial crisis. I think the bailouts served to delegitimize the market system in the eyes of a lot of people. Up until then it had looked as though it was open and meritocratic and, certainly after the fall of the Berlin Wall, there was no competitor system. After the bailouts, and really for the only time in my life, a kind of core piece of the Marxist analysis seemed to be true, which was these guys turn out not to be free marketeers at all the moment things go wrong. They’re happy to debauch the public purse and help themselves to the money of lower income people, and that was indeed the impact of the TARP policy in your country and the bailouts here. And I think a lot of the shake-up of politics since, is a delayed response to the way in which the financial crisis was handled.

I think that Bernie Sanders, and Donald Trump, and Greece’s “Syriza,” and Spain’s “Podemos,” and Geert Wilders in the Netherlands and Marine Le Pen in France, they’re all in different ways a reaction to the way in which we mishandled the financial crisis. I think the cycle will come to an end, and there’ll eventually be a return to normal politics, and that the general trend over the last half-century has been towards more classical liberal ideas. But at the moment you’d have to say we are far from that. And even in Britain, which is traditionally by far the most free-market of all of the EU countries, two in five of my fellow countrymen at the last election voted for a party led by somebody who regrets the outcome of the Cold War, and that is not something I ever expected to say.

I think a lot of the shake-up of politics...is a delayed response to the way in which the financial crisis was handled.

Ben Weingarten: So you would suggest, in a sense, that the populist counter-reaction to what’s occurred in the world over the last say generation is more about economics than culture?

Daniel Hannan: I think it is, yes. I think this tends to happen with all financial crises. A financial crisis is a different beast from a normal economic crisis — it lasts longer, the effects are deeper, and finance is harder for people to understand in the first place. It kinda happens on sufferance for most voters. They don’t get how moving money around can be a job like driving a combine harvester. That doesn’t bother them when their own living standards are improving, but it bothers them very much when they stop improving. So yes, I think we are dealing primarily with a financial challenge.

I mean, as I understand it, illegal migration from Mexico to the U.S. at the time of the last presidential election had not been lower since the early 70s. So the sudden salience of that issue I don’t think was a response to a change in migration.

I think we were seeing something else. I think we were seeing a sense in which a number of people felt that their life…their living standard was declining through no fault of theirs, and then, to rub it in, they were being insulted. They were being told that they were stupid, ignorant, racist hicks. And that bothered them at a time of economic stagnation in a way that it wouldn’t have done in a time of rising prosperity.

Even in Britain, which is traditionally by far the most free-market of all of the EU countries, two in five of my fellow countrymen at the last election voted for a party led by somebody who regrets the outcome of the Cold War, and that is not something I ever expected to say.

Ben Weingarten: And you would suggest it’s analogous in Europe with mass migration, primarily from the Islamic world, both North Africa and the Levant as well, that it’s a similar sort of a trajectory?

Daniel Hannan: Well, there hasn’t…I don’t think that really works as the explanation, because there’s no particular correlation between the countries that have experienced the strongest populist reactions and the countries that are the recipients of the most inward migration. By far, the biggest per capita recipients of migration from North Africa and the Levant have been Sweden and Germany, but the big political earthquakes have happened in Spain, in Greece, possibly now coming up in Italy. So I don’t think immigration itself is the trigger.

People become exercised about immigration when other things are going on, and, as I say, the other thing here is that…we who defend the free market system should be clear about this: We’re defending a counter-intuitive system. The free market works in practice, but it’s difficult to explain to people in theory. You’d think that sitting down and planning everything sensibly would be far more productive than letting everything regulate itself higgledy-piggledy. The only reason that that isn’t true is because we know that every time it’s tried, it ends in disaster. But when the market system is seen also not to be delivering, people very easily revert to the instincts and intuitions that we’ve inherited from our kind of hunter-gatherer forebears, which make it difficult for people to grasp why the market system works.

For example, the idea that something has an intrinsic price — there’s been a persistent fallacy in all human history that if you’re buying at something called the “wrong” price that you’re a speculator or a profiteer. How many pogroms, how many socialist revolutions, how many smashing up of merchant quarters have there been because of people thinking with their hunter-gatherer brains that just as an object has a fixed volume and a fixed mass, so it has a fixed value? Now, that kind of counter-intuitive stuff doesn’t matter when employment is rising and when prosperity is rising, but when people think, “Ah, all those guys kind of moving money around on a screen, they were paying themselves bonuses, and I haven’t seen a pay raise in 10 years,” suddenly all of these fundamental objections come in.

And therefore those of us who understand why markets are the best vehicle of freedom and prosperity and why they’re particularly good news for the poorest people and lead to the highest and most accelerated rise in living standards for the people who are starting from furthest behind, we need, I think, at a time like this to start explaining the whole system again from scratch and explaining why all the alternatives lead, at the very least, to a diminution of freedom and at worst lead to outright oppression.

You'd think that sitting down and planning everything sensibly would be far more productive than letting everything regulate itself higgledy-piggledy. The only reason that that isn't true is because we know that every time it's tried, it ends in disaster.

Ben Weingarten: Yeah, and to your point, maybe it starts with, “We all want order in our lives, but the spontaneous order that the market provides is the best we can hope for, and to try to impose order, you end up creating absolute chaos and misery for everyone…”

Daniel Hannan: That’s very true. Very true. But also, look at the popularity of protectionism in the U.S. now. Look at how both candidates at the last election thought that there were votes in saying “We’re gonna make you pay more for what you’re buying.” They didn’t put it like that, obviously. They said, “We’re gonna stop the Chinese dumping more.” “We’re gonna stop the Mexicans taking outsourced companies.” But it amounts to “We’re gonna tax American consumers.” And this was broadly popular, and the reason it’s broadly popular, again, is free trade is a counter-intuitive idea. We evolved on the savannas of Pleistocene Africa. We are…the idea of depending on strangers whom we cannot see runs up against a million years of evolution encoded in our genomes, and that’s why there’s always the possibility for a politician to stir up those deep instincts and intuitions against the market system. And ultimately, the way in which you win this argument is to show that it’s working, but, as I say because of the way we mishandled the financial crisis in 2008, we haven’t been in a very strong position.

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BEN WEINGARTEN is a Senior Fellow at the London Center for Policy Research, Senior Contributor at The Federalist and Founder & CEO of ChangeUp Media LLC, a media consulting and production firm dedicated to advancing conservative principles. You can find his work at benweingarten.com, and follow him on Facebook and Twitter.


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