Populism in Korea and America
The author is a professor of economics at Korea University.
Joe Biden won the U.S. presidential election after twists and turns. But the polls that predicted an overwhelming victory were far off. American voters showed considerable support for Trump. Trump is a populist who garnered support with inflammatory political rhetoric and pork-barrel policies. He united supporters with his “America First” slogan, trade protectionism and anti-immigration populist policies. In an American society divided between conservatives and liberals, Trump won support from conservatives who dislike radical change and many low-educated voters who think established politicians and parties don’t care about their economic struggles.
If Trump had properly handled Covid-19, he would have won. His corporate-friendly economic policy brought considerable economic success for America. His drastic tax cuts and investment support allowed the United States to maintain relatively stable employment and economic growth. It would not be surprising if another Trump-like figure would appear in the U.S. presidential election four years later.
Populists don’t believe in the usefulness of representative democracy and believe they are entrusted with the authority to combat the political establishment. They often undermine the authority of democratic institutions such as the parliament, the bureaucracy and the judiciary.
Populist economic policies are characterized by a focus on short-term interests and ignoring long-term harm. Fiscal and monetary expansion increases economic growth but often results in serious economic instability caused by increasing national debt and inflation. In particular, leftist populism lowered productivity in the long run with a radical redistribution policy, excessive business regulation and interference with a flexible labor market.
A Biden administration will implement progressive policies to resolve complaints about income and wealth disparities, social polarization and racial conflict. Pro-labor economic policies will increase, but they won’t go as far as leftist populism. As Biden is a moderate liberal — and as the Republican Party holds the Senate majority — radical policies are not likely to be passed. Instead, uncertainty in American society could grow in the future because class and racial discord are hard to heal.
Could there be a second Trump or Latin American-style leftist populism? The Asian Barometer Survey claims that Korea has a favorable environment for populists’ rise due to distrust of existing politics and dissatisfaction with income disparities. The current government has often showed a populist tendency that only it can represent the citizens and is ethically superior. Trump-style divide-and-conquer moves have become common in Korean politics. While fiscal spending for our Covid-19 response is not populist, concerns over populist economic policies grew as pork-barrel spending and national debt increased in the past three years.
There is growing public dissatisfaction over the economic downturn, income disparities and rising home prices. Young people in Korea are highly educated, but there are not enough good jobs. It is hard to move up the social ladder without an inheritance. They are angry at the established elite. There is a high possibility that populists attacking the establishment and advocating populist policies will emerge in the future.
Korea is at a crossroads. Comprehensive reform is needed to keep Korea’s future from heading to political turmoil and populism in the future. Economic reform to improve inequality and polarization are needed. Social security nets needs to be enhanced, and housing and education problems should be resolved. Excessive regulations should be eased and policies to enhance labor market flexibility and create quality jobs are needed. Political reform should disperse power concentrated in the president and the Blue House. Independence of democratic institutions — such as the judiciary, the Board of Audit and Inspection and the prosecution — should be reinforced to effectively check power. Awakening of the powerful elite is needed. Public fury over the self-righteous and corrupt privileged class monopolizing power is fuel for populism. Political and economic reform should open up the ladder for upward mobility and hope for the future for the young people.
Translation by the Korea JoongAng Daily staff.