The Plutocrat-Populist Axis

Today's right wing authoritarian movements are based on a coalition between plutocrats and populists. From Donald Trump's MAGA to Victor Orban's Fidesz to Vladimir Putin's Vladimir-Putinism, ultrarich billionaires make common cause with blood-mad nationalists and nativists to pursue antidemocratic government and illiberal social policies. This is a matter of course in today's world, but it is also a puzzle, one that has long bedeviled political commentators. The plutocrats are robbing the populists blind! All they care about is corruption, extraction, low taxes and low services—all of which exact serious costs from the mass movement of the populists.

Meanwhile, the populists insist on actions that are disastrous for business, including mass deportations, thousand percent tariffs, and bloody wars of conquest. To take just one example, if all of Donald Trump's preferred policies were enacted—20% tariffs on all imported goods, the deportation of 15 to 20 million Americans, and the invasion of Mexico—that would be catastrophic for the stock market. So why do men whose whole fortunes depend on the stock market support him? And what's the matter with Kansas?

If you restrict your analysis to either strictly politics or strictly economics, it is hard to see how these groups have an overlap of interests. In the past, theorists from each of these fields reached for an epicycle to explain things. Economists will explain away the paradox by way of "distributed costs, concentrated benefits." The rents the plutocrats extract from the state benefit them immensely, but harm the individual taxpayer only minutely. Therefore, the plutocrat is strongly motivated to maintain them, while the populist struggles to care about the intricacies of high end tax loopholes. Political analysts try to resolve the paradox from the other direction. The populist is genuinely being harmed, but "false consciousness" and "misinformation" prevent him from realizing this. Fox News is the opiate of the masses and all that—though these days it is more like the crystal methamphetamine of the masses. They're simply too busy screaming at their screens about migrant caravans to realize the plutocrats are picking their pockets.

Neither of these explanations is particularly satisfying. How exactly populist factions across the globe all get duped in exactly the same way year after year and decade after decade is a bit mysterious. In the other direction, populist politicians can add up the price tag of redistributive programs as easily as anyone else, and the pockets of the fat cats should be juicy targets for redistribution to the herrenvolk.

We need to rethink the nature of the problem. The plutocrat-populist axis is not some shaky coalition of exigency, but a robust and enduring power bloc. It does not depend on misinformation or false consciousness. The populists aren't rubes getting suckered by the billionaires. They have a common cause. In a previous essay, I argued that the concept of rent was key to understanding the dysfunctions of the American economy. And it is the shared devotion to rents that unites plutocrats and populists—in the former case economic rents, in the latter case social rents. And in each case, those rents are maintained by social stasis. This is the common cause that unites these two divergent constituencies.

The rentier economy

An economic rent is lucre extracted not in exchange for real production, but from exclusion and artificial scarcity. A social rent has the same structure as an economic one. A social rent is the approbation, the status and position, and crucially also the psychic wage of hierarchy one receives not for anything particularly meritorious one has done, but simply because others are excluded from social participation. A social rent, like an economic one, can translate into very real power—into the ability to exercise arbitrary power over the subaltern, the ability to dominate, the ability to engage in cruelty without accountability. Just ask anyone who lived under Jim Crow.

The rentier economy is characterized by low growth and therefore less material prosperity for everyone, but more guaranteed relative position for those on top. And people, it turns out, really like relative position. We like to be waited on by humans not robots, even if the robot is faster; a boy fanning you with a palm leaf reeks of "leisure and luxury" even if an electric fan would cool you better. As I argued elsewhere, these hierarchies tend to be fractal, the structure repeating itself at multiple levels of analysis, from the family to the region to the nation, and thus even people who are quite far down the ladder still have yet others to feel they are above.

One of the key insights of North, Wallis, and Weingast's Violence and Social Orders is that economic and social rents are inherently linked. The rentier economy is built on exclusion from social participation, and because different forms of social participation feed back in to one another, it must be a thoroughgoing exclusion if it is to be stable. 

Take a simple example. A businessman discovers a new area of profit and reaps rich rewards. Entrepreneurs see this and want their own slice of the profits, so they seek to enter the new sector. But the businessman uses his outsized profits to undercut them, corner suppliers, exert market power, and generally leverages the rents of his monopoly to maintain that monopoly, thereby stifling competition. In a democratic system, this is where those excluded competitors begin to mobilize using other modes of social organization—aka, they get a law passed to restrict monopolies and crack down on anticompetitive practices. Exclusion in the economic realm prompts countermobilization in the political realm. This is fundamental to our open societies, but it is unusual as well: in limited-access societies, the monopolist buys not just economic power but political power and associational power, and attempts to exclude competitors in every domain. (In most societies in most of history, they succeeded.)

The point applies equally to social rents. A world in which the patriarch's wife can just leave him and be assured of finding a good job and affordable housing is a world in which the chains of the patriarchal bargain weigh far less heavily. The price of a human helpmeet to reflect a patriarch's greatness back at him rises and rises. And so the shape of the bargain changes to become more equal. As women earn more and more, the social rents of maleness decrease.

The unity of plutocrats and populists

What this shows is that there is a coherent picture of society that both plutocrats and populists cohere around: a world of stable hierarchies and durable exclusion. These hierarchies are pervasive, and they protect the economic position of the plutocrats just as they protect the social position of the populists. The system forms an integrated whole, dependent on thoroughgoing exclusion and social stasis at all levels. Both parties accept less absolute material prosperity in exchange for greater security in their relative positions. Modern prosperity is a result of dynamism, and dynamism is not friendly to hierarchy.

"But Samantha neither plutocrats nor populists have read North, Wallis, and Weingast! If you asked them they would not describe their politics as the conscious endorsement of a stagnant rentier economy." That's correct. The rentier economy is not the self-conscious choice of reactionaries, but rather a way of describing their picture of the world in an objective way. But this still leaves us with a puzzle: how can the idea of the rentier economy unite plutocrats and populists even if neither thinks in those terms?

Zero sum mindset

The key here is to realize that humanity spent a few tens of thousands of years maintaining the rentier economy before North, Wallis, and Weingast came along to theorize it. As modern economic historians uniformly agree, the premodern world was a zero-sum world—all hundred thousand years of it. Technological change was imperceptible, the possibilities for productive investment scarce. The largest economic factors were simply land and labor, and if you wanted more of those, you had to take them from someone else. This immense length of time leaves a mark on the human psyche. The zero-sum mindset is an identifiable suite of emotional and ideological reactions to the world—though you may be more familiar with it under the name "authoritarian personality."

The authoritarian personality likes hierarchies and dislikes change. They like strongmen and they dislike new ideas. They like knowing who they can look down on. This is all emotional, or instinctual, or at least pretheoretical: these are libidinal emotional responses to the world in front of their noses. But great social structures are maintained by the actions of individuals: hundreds of thousands of individual people, acting out their own limited instruction-set, together generate an overall pattern, even if the exact shape and nature of that pattern is not truly understood by them. And so it is with the authoritarian personality. Each individual grasping after their own slice of the rents yields a world in which they themselves profit less than if they simply lived and let live. Individuals all acting according to this program together yield the stagnant rentier economy.

This is why plutocrats and populists alike react in characteristically zero-sum ways in response to the perception of risk—which is to say, change, which is to say, difference. "If someone Different from me is gaining, that means I must be losing, which means I better squash them down before they do me." This atavistic mindset expresses itself differently in billionaires and millionaires, in obsessions with economic vs. social rents—though not that differently, in the end: witness one-time trillionaire Elon Musk's bizarre brainworms about transgender equality, for instance.

Unraveling the axis

Pundits often pretend that Trump's populist base of support is the "forgotten man" or the "white working class." But as Arlie Hothschild shows, this has never been true. Trump's most ardent supporters own big boats and big cars and big houses. They are big fish in small ponds, the local wealthy of fading counties—in a word, American gentry. They own car dealerships or multilevel marketing companies or beer distributors or simply large tracts of resource-rich land. They like things the way they are and don't want them to change—because they are afraid of that change. They are afraid their social position or their economic position—or both, them being so closely intertwined in America—are going to be eroded by new industries or shifting culture. And so they support mass deportations and corrupt capitalism, tax cuts and a war with Mexico, genital inspections and ending welfare, flailing against the tide of modernity wherever they find it.

So what is to be done? Answer: prove to people in a visceral way—prove in their lived experience—that change is growth and difference isn't dangerous. There's a reason that the three most powerful forces in the world for creating liberal citizens are cities, schools, and unions. Live and work and learn alongside other people much different from yourself and benefit from the exchange. Feel in your blood "we are not so different, you and I."

So what is to be done? Make cities, schools, and unions more accessible and more functional. Actually build housing where people want to live, rather than forcing us by code and law to live in exclusionary suburbs. Rather than pouring ever more money into hyperelite colleges, fund and expand state colleges accessible to the many. Support unions and unionization; work towards sectoral bargaining to make sure those unions align not with exclusionary policies but dynamism and growth. Build a dynamic economy and a dynamic society that expose people to those different than themselves and let them learn on that emotional level that freedom and equality work.

Featured image is Freedom Convoy 2022, by ΙΣΧΣΝΙΚΑ-888