Peter Kraneveld reminds us that democracy is the art of compromise, where even populists must be heard

The most common, and most error-prone, way to ‘predict’ is to extrapolate. The media are busily extrapolating Brexit into the EU falling apart (again), and the US presidential election into populism taking over the world, giving what should have been a festive change of the year a pessimistic gloss. Let’s think differently.

The year 2016 has turned out to be shocking. The British population opted out of the EU, and the US elected the irresponsible Donald Trump as president. The two events have much in common, now labelled as ‘populism’. Newspeak struck in other areas as well. In both countries, there was dissatisfaction with the state of affairs, now labelled as the Establishment, and a willingness to reject. What was shocking is what was rejected: rationalism, environmentalism, science, respect for others, hospitality and truth. What was embraced was just as shocking: nationalism, irrationality, innuendo, isolationism, racism and misogyny.

Almost forgotten were such 2016 issues as refugees, now labelled ‘immigrants’; officially supported hacking attacks on computers of other governments, still waiting for a label (‘act of war’ and ‘freedom of information’ could be considered); and lying out loud in public, now known as ‘post truth’ and ‘fake news’. Not that these developments are innocent. In early January, a Pakistani minister threatened Israel with a nuclear attack after he let himself be misled by ‘fake news’.

Both in the UK and the US, decades of progress in all kinds of fields are threatened. In both countries, hate crimes have already gone up by startling percentages. Due to deepening political divisions, it is not even excluded that at least one of the two countries will fall apart. Ironically, those most in favour of populism are among the first to suffer from it, by economic decline, unemployment and inflation. Voter disappointment seems unavoidable. Will it lead to even more radicalisation?

It is up to the British and Americans how their countries are governed. However, their behaviour has an influence on other countries. Populism lurks big and ugly in many European countries, and some, like Poland and Romania, already have a more or less populist government. In the Netherlands and France, elections will come shortly, and their populist parties get the most votes in polls.

Yet, there are positive signs. Austria invalidated the results of its presidential election because of “irregularities”. When the election was repeated, the populist candidate was beaten by a reasonable margin, not the thin margin the polls had predicted. Angela Merkel, the new ‘leader of the free world’, is addressing the real and serious issue of refugees. Peru – a model of good governance these days – and Mexico have shrugged off Trump’s rejection of the Trans-Pacific Partnership by opening to China, Trump’s bugaboo. All major Dutch political parties have excluded a coalition with the populist party, and, without a coalition, it cannot govern. French presidential candidate François Fillon and even Emmanuel Macron are beating Marine Le Pen in the polls.

Investors have learned the hard way to look for turning points in the cycle. They look at consensus opinions and the surrender of the holdouts to the communis opinio as signs of an approaching turning point. That can be applied to political risk also. It just might be that 2016 was a wake-up call and that Trump was the crest of a wave of populism now receding, as people have started to realise its dangers. Maybe politics will change in 2017.

Populism cannot and should not be crushed. Democracy is not the tyranny of the majority but the art of compromise. In a democracy, even populists must be represented and heard. However, populism can be reduced to its proper place – not a leading political dogma but a way to keep starry-eyed politicians honest and make them think hard on how to make long-term changes palatable for the population at large. The great thing is that you can help that happening. When your time comes, take the trouble to vote. Vote with your brain, vote for co-operation, inclusion, embracing modern times and changing with them.

Peter Kraneveld is an international pension expert at PRIME bv

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