Don’t believe the lull: Corona politics from the unity of social distancing to populist social division

The political and economic implications of social distancing vary substantively [Gordon Johnson/Pixabay]

The coronavirus forced an unprecedented emergency brake on liberal democracies in recent weeks. Governments enacted sweeping social distancing measures to buy time in learning to control the virus and prevent health systems from collapsing. This new normal under an external threat appears to have changed politics. Governments rally support everywhere, even where populists govern badly. In contrast, even populist opposition actors lose support and acquiesce to the national emergency, as citizen priorities have shifted starkly. Does the Corona crisis thus mark an abrupt ending to the oft-lamented divisive politics of recent decades? Does it rein in a phase of historical unity or even herald the beginning of the end of populism?

In contrast, the emerging political economy of social distancing suggests otherwise. The standard ingredients for populist political conflict are already visible. Existing challenges to material inequalities and privileged social status within constrained democracies which feed populists are likely to exacerbate over social distancing, particularly at the international level. The momentary lull of national unity is thus more likely to give way to the forceful return of familiar distributive and constitutional conflicts of the last decades, but at even higher stakes.

Social distancing as a national emergency measure

Social distancing is a practice of drastically reducing levels of physical social contact to address a pandemic health crisis. Such measures have been put in place to different extents across rich countries in recent weeks, and for good reasons. From a public health perspective, social distancing is almost unanimously advocated to slow the spread of COVID-19 before health capacities collapse facing a virus we cannot (yet) reliably detect, trace, treat or vaccinate against. Economically, the case for social distancing is strong, too. An unchecked spread would likely bring drawn-out economic implosion and growing panic as labor markets, consumer demand, supply chains and social life in aging societies are unpicked by the virus.

However, societies freezing their activity to a minimum implies economic growth falling off a cliff: the virus itself and government response induced an almost instantaneous collapse of demand in the service sector on which our post-industrial and deeply interconnected modern economies are built. It is unclear yet just how deep the economic depression resulting from the collapse and knock-on effects on individuals, firms, and financial sectors may become, but it is likely worse than post-2008. Given the public health necessity of distancing, the controlled shutdowns nonetheless are a necessary collective investment. Indeed, replacing foregone private consumption by public spending as much as our policy imagination allows would be the standard macro response to a largely exogenous ‘shutdown depression’ in a context of deflation and very low interest rates.

The unifying emergency politics of social distancing

At these stakes, the challenge of COVID-19 has spawned a dizzying array of responses by economic policymakers at breakneck speed, supported by the unifying politics of emergencies. Central banks across the West took only days to inject the promise of unlimited monetary financing to keep banks and industry on life support. Even more importantly, they armed fiscal policy makers with a promise to keep states’ spending costs under control. Parliaments, in turn, subsidized worker incomes or even transferred cash to individuals directly and opened the public support purse widely to cushion the social hardship of individuals losing their economic livelihood. Firms are being helped through credits, grants, and potentially takeovers for the financial and real sectors of the economy. Others are being taken over or directed by the government to help fight the virus. Overall fiscal responses are already more than twice the size of those in the global financial crisis in Germany and the US.

This scale of public intervention against a frightening external threat has rallied support for whoever happens to be in charge. In Europe, even previously unpopular executive figures like France’s Macron, the UK’s Boris Johnson, Italy’s Giuseppe Conte, or Ireland’s Fine Gael party see their support numbers surge sharply. The surge is not restricted to ideologies, either: the left-wing coalition governing Portugal experienced boosts as well, as did power-sharing Italian and German Social Democrats. On the other side, opposition support decreased in the last weeks, as citizens focused on passing life support measures developed by executives. Accordingly, most party rivals largely acquiesce to government choices and support the crisis measures which pushed all else off voters’ current priorities. The US senate’s 2 Trillion Dollar stimulus bill passed with unanimous bipartisan support. In Germany, even the radical right Alternative for Germany had to give up its initial resistance and supported the government’s emergency funding bill. Similarly, the Austrian Freedom Party and even Matteo Salvini’s Lega in Italy seem to bleed support to government parties since the crisis started.

However, worryingly, polls signal increasing support also for already-dominant authoritarian actors angling for unlimited executive power like the Polish Law and Justice Party, Turkey’s President Erdogan, and Hungary’s Viktor Órban. In the US, Donald Trump records the highest approval ratings since taking office, untainted by his erratic and untruthful crisis response. And despite the apparent unity which the Coronavirus brought to public opinion and democratic politics elsewhere, the seeds of division are already sown.

The seeds of populist politicization: relative material losers and relative status threat

Research on liberal democracies since the 1980s identified two main mechanisms of populist electoral success, which mobilize either relative material losers or relatively privileged holders of social status. Further, preliminary results from my Ph.D. project suggest that this is most effective where drastic political changes impact citizens in economically or culturally unequal ways and where more authority is being exercised outside the remit of democratic accountability.

Social distancing is bound to play to this tune as it creates winners and losers by hitting the poor and those with lower social status more strongly. Obviously, those without assets, in precarious employment or outside formal labor markets suffer greater economic blows than those for whom home-office is the highest visible price to be paid. At the same time, protection from exposure is highly segregated according to income. Only around 25 percent of US jobs could be performed from home before the crisis, and evidence from Germany suggests ‘essential jobs’ excluded from distancing orders are more likely underpaid. The interlocking health and economic crises thus likely escalate pre-existing material inequalities. These factors are compounded by inequalities in social status, that diffuse set of economic, cultural, and thus ultimately political skills and influence brought by education, urban residence, and age. At least initially, the virus threatens lives in more urbanized, interconnected parts of the country much more and seems less pressing elsewhere. However, most jobs that can be performed from home require higher skill levels and are thus reserved for the more educated. Similarly, access to digital infrastructure, public financing, and quality health care tends to be lower in rural areas, such that both the virus and social distancing may affect countryside residents with fewer links to modern sectors of the economy differently.

At the same time, formulation and debate over restrictions from social distancing are increasingly forced into digital spheres that exclude large parts of the population. And while those dependent on physical social activity were prohibited from it immediately, international flights which tend to carry passengers with higher education and income levels were not generally stopped to this day. Those with less standing in modern societies’ educated, urban, and cosmopolitan decision-making bubbles may thus come to see the crisis as exacerbating underlying inequalities of social value.

The populist cocktail brewing in response to COVID-19

Such inequalities of economic and societal privilege tend to be weaponized politically by populists as soon as crisis impacts are felt strongly and obtain a particular force where democratic influence on decision-makers is limited. Unfortunately, the Corona crisis is likely to tick both of these boxes. On the one hand, the speed of the sudden stop in the real economy accelerates economic pain in contrast to 2008, when financial system effects first needed to filter through to people’s daily livelihoods. Already, the latest stimulus package in the US was rejected twice by Democrats over a lack of support to the unemployed and social services contrasting with unconditional bailouts to large and well-connected firms and the financial sector. Additionally, social status battles are already heating up. In recent days, a debate about the relative costs of social distancing versus reopening the economy has broken out, where the populist right in the US and Germany tries to position itself on the side of those who cannot afford the economy to stay shut. In France, Amazon workers already protested last week against the hazards of delivering parcels to the privileged who can afford to stay at home and order entertainment products. As restricted freedom of movement and physical contact continues to exert unequal economic and societal effects, such conflicts are likely to grow louder, going forward.

On the other hand, maintaining a perception of democratic legitimacy in such large-scale decision-making at record speed is challenging and threatens to fuel populist narratives of self-serving elitism. Fiscal stimulus is taken at unprecedented levels, with outsized influence for the rich and well-connected in highly unequal societies. In what is undoubtedly not the last scandal to emerge from Coronavirus policy, US Republicans already hid large bailouts for real-estate moguls in the latest stimulus bill. Ensuring equal voice is even more challenging in technocratic institutions such as central banks. These have assumed giant levels of authority to fight the Corona depression and now reach ever deeper into the real economy with little oversight. Alarmingly, the US Federal Reserve tasked asset management giant Blackrock to administer parts of its public bailout program, handing the firm a say in the crucial and fundamentally political decisions over which sectors are helped and how.

International fuel on the fires of social distancing

In a world of considerable international authority, politics beyond the national level supercharges such disparities in access to financial relief and decision-making influence, risking to further boost populists in the years ahead. Financial inequalities are supreme at the international level, where the policy leeway of countries without guaranteed access to reserve currencies is at the mercy of rating agencies, capital markets, and central banks beyond their control. This is most obvious for developing countries of the Global South, who already saw massive pressure on their currency value and financing opportunities due to record-level capital outflows in search of financial safety abroad. Which countries get access to stable currency via either US central bank swap lines or IMF support and under which conditions is key in avoiding exacerbating existing inequalities in addressing the crisis. In the Eurozone, similar dynamics apply. Not all member states are equal in the eyes of investors, and poorer states rely on the ECB’s promise to keep interest rate spreads from escalating. Without a common EU financing mechanism such as Coronabonds, these states will not be able to fight the virus on equal fiscal ground given the future penalty on extra national debt awaiting them, despite (again) being hit harder due to their geographical position and lower health capacity.

On the flip side, these international conflicts also mobilize those with relatively privileged status, clamoring to defend it against perceived losses of influence. One of the first measures of social distancing in Europe was the halting of asylum rights and refugee intake, as governments declared those currently lacking political rights as secondary to EU citizens in deserving help. Similarly, governments in the Netherlands and Germany declared their strong opposition to financial solidarity measures like Coronabonds, faulting a supposed lack of pre-crisis fiscal discipline in Southern Europe rather than their structural disadvantage in an incomplete monetary union.

Unfortunately, the politics of international organizations do not easily allow resolving such conflicts in accordance with mechanisms of democratic accountability. Encouragingly, both the European Commission and the ECB have so far focused on leaving maximum room to maneuver to EU member states, suspending normal debt, deficit, and refinancing rules. Nonetheless, emergency politics in IOs tend to move power to more obscure executive bodies like the ECB and the Eurogroup, where decisions are less accountable to public scrutiny and contestation. In the European Council, the Northern European holdouts have so far been able to block meaningful common action. In contrast, the directly elected European Parliament has redeployed existing funds but remains confined to the sidelines of the crisis response.

However, if large national majorities demanding additional action from the EU are thwarted (again) by intergovernmental bargaining or the ECB deciding to pull the plug on government support at the end of the year, citizens’ trust in their democratic influence is likely to tank further in these countries. In Italy, an extreme right party is already gaining support, waiting to capitalize further on citizens losing trust in the value of democratic rule. Inversely, if relatively privileged countries are not convinced through open democratic debate that others can be helped without incurring a loss for oneself, citizens will continue to retreat into the exclusionary politics of status threat at the expense of political equality.

The specter of Coronavirus haunting the liberal international order

In sum, the seeds of populist discontent are already apparent in these early days of a Corona crisis marked by societal inequalities and challenges to democratic legitimacy. These conditions make a swift return of the pre-crisis populist political battles at even higher stakes more likely than a fundamental change of trajectory. In this context, the authoritarian trajectories of populist leaders eroding political equality to protect current majorities’ influence in Hungary, Israel, Poland, and the US since the crisis are a stark warning of what lies ahead if democracies let political quality deteriorate further.

If liberal institutions at home and internationally are to survive this crisis, it is thus crucial to emphasize and defend democratic contestation of key decisions, not least to fight for the disadvantaged whose trust in democratic politics is already shaky. Otherwise, there is no telling whether the crisis will end up further wrecking a liberal order which already found itself in a worrying state at the outset.

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