To neutralise populism, give people more control

Providing individuals with greater agency can improve our politics, say Robin Varghese and Sarah Pray of the Open Society Foundations

 

This is a by-invitation commentary as part of The Economist’s Open Future initiative, to spur a global conversation across the ideological spectrum on individual rights, markets and technology.

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THE CURRENT wave of populism is often explained as a reaction against globalisation. The economic losers, the argument goes, have not been fairly compensated. This is undoubtedly part of the problem. Yet it is hardly the sole driver behind the eroding confidence in government and the fury at global elites.

If Brexit and the election of Donald Trump are any indication, the backlash against globalisation is about more than money and employment. Some of the anger seems rooted in a lack of control.

People who have lost their jobs loose not only an income but also a sense of place, of purpose and of solidarity. Community dislocation, absence of social belonging, loss of identity, lack of political control and self-determination—these things are extremely hard to measure in dollars and cents or pounds and pence.

Responding to this is urgent. Unless people get a more substantial voice and sense of agency over their lives, it is hard to see how the backlash against global trade can be quelled, and that threatens the global economy and democratic institutions.

So how might confidence and agency be restored to those facing the sharp end of globalisation? Our work at the Open Society Foundations (OSF) sheds light on how giving people a “path to participation” can help tamp the anxiety that drives people to embrace protectionism and populism. We have looked specifically at three contentious areas: refugee settlement, worker participation and trade policy.

First, refugee settlement. Many places in North America and Europe have experienced an influx of foreigners—and for existing residents, this can create an understandable sense of alienation from their communities.

It is not a new concern. For example, in the 1970s Canada faced a wave of Vietnamese refugees. It launched an innovative policy in 1979 that encouraged people, via faith groups or civic associations, to sponsor individuals or families for their first year in the country. The federal government in turn sponsored one refugee for each person that the public supported. The programme was expanded to let companies and charities support refugees too.

Since the programme began, it has helped around 300,000 refugees, including 19,000 just last year. Giving people an opportunity to play a role in integrating refugees has transformed views of refugee resettlement, fostering acceptance rather than fear or resistance. The hosts and not just the newcomers are transformed by the experience. Remarkably, almost one in three Canadians have been involved in sponsoring a refugee family or know someone who has. Surveys show it is a source of national pride.

At a time of heated rhetoric against foreigners, the programme is a model for other countries. Last year immigration officials from Spain, Argentina, Ireland and New Zealand endorsed the concept. Some, such as Britain, are designing similar programmes; Ireland and Germany are implementing them.

The second area where a sense of control is essential is economic wellbeing. German firms famously give workers board representation and shop-floor co-management through works councils. They provide information, consultation and negotiating ability over many managerial decisions. Workers have a greater say in the way companies adjust to the market, which reduces conflict when companies make painful decisions over cutting jobs or moving them overseas.

Some businesses are starting to adopt this idea voluntarily. Spain’s Mondragon Corporation is a network of employee-owned co-operatives with a “democratic” business model based on “one worker, one vote,” in which worker-members decide on major issues such as the distribution of profits and elect the governing council, akin to a board of directors.

This ownership model is often associated with smaller, “green” or “social” businesses. Yet Mondragon is one of Spain’s largest industrial groups, with more than 75,000 employees and 141 subsidiaries in over a dozen countries. Although it has not been free of tensions, these mechanisms—and the sense of agency that employees possess—gives Mondragon worker buy-in, including for offshoring.

Social innovators are learning from these examples to design new forms of worker representation for an increasingly borderless, digital workforce. They can be applied to help gig-economy freelancers, for example.

Our own work has sought to emphasise the voice of workers and communities in decisions. OSF has supported the conversion to employee-ownership of companies whose founders retire. And we have funded United for Respect, a group that works with investors on new forms of stakeholder consultation, notably for TRU Kids, the holding company for Toys R Us brands as it emerges from bankruptcy, to provide employees a direct communication channel with the company’s management and directors.

What we have seen from the refugee-sponsorship and corporate-ownership programmes is that they reduce the public’s resistance to the global movement of people and capital. By giving stakeholders a more effective say, they make their voices heard in the process—not by resisting change but by helping shape the rules that govern the change and how that change unfolds.

Governments can learn from these activities by developing models of policymaking that let citizens participate in decisions. One sensitive area is trade negotiation

In America, negotiating trade agreements is the sole responsibility of the US Trade Representative. Its policies are shaped by advisory committees—closed-door gatherings comprised mainly of the private sector. Even Congress finds it difficult to access information and draft texts. Regardless of who is in the White House, the distance from elected representatives and citizens’ interests is a problem.

In recent years, groups that OSF has funded such as the Roosevelt Institute, the Center for American Progress and the International Institute for Sustainable Development have pressed new approaches. These include more transparency in negotiations (such as publishing trade-negotiation documents throughout the process) and letting community leaders and workers seek redress for harms. It also has meant broader and more meaningful participation in trade-advisory committees by leaders from outside of industry. When people are part of the process, their values can influence the work, such as devising common labour and environment standards.

Together, the initiatives transcend refugee resettlement, company ownership and trade policy. They show how personal agency and control can be harnessed as mechanisms to shape perceptions not just outcomes—and that both matter. People can see and experience that the processes of globalisation are more legitimate and that they can influence what happens in their lives.

Not surprisingly, where people have a voice to shape the rules, the outcomes are more likely to feel and be fairer. That may turn people away from simple solutions proffered by populists and protectionists, and towards more sustainable economics that benefit more people.

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Robin Varghese is the associate director of knowledge and innovation, and Sarah Pray is the director of advocacy for economic governance at the Economic Justice Programme of the Open Society Foundations, a charity founded by George Soros that supports groups promoting education, justice, media and other causes.