The rise of populism reflects unmet expectations about living standards, but the answer lies in restoring productivity growth rather than blaming inequality.

Cost of living is by far the number one political issue today in Australia. This is the obvious reason for the dramatic rise in support for One Nation, which tries to appeal to those people whose living standards are falling short of their expectations and who feel that they have missed out.

Understandably, these people do not consider this to be their fault. It is much easier to blame others, most obviously migrants, whom they see as taking their jobs and competing for houses.

This rise in populism is not unique to Australia. A recent US study of democratic governance warned that “it is under threat globally, marking a sharp contrast with the post-Cold War era of democratisation and liberalisation”.

According to one of the authors, Zehra F Kabasakal Arat, “[a] deepening sense of insecurity and economic grievance creates opportunities for illiberal and anti-democratic politicians to exploit voter’s distrust, foment division and depict some segments of the population as an existential threat”.

If we are to stem the rise in populism and reduce the threat to our liberal democratic values, then we first need to understand its cause. Critics here in Australia, noting the increase in populist support is concentrated among manual workers, attribute this to an increase in inequality. Furthermore, many of these, including authors here in Pearls & Irritations, allege that this supposed increased inequality was caused by the spread of neo-liberal economic doctrines in the 1980s. No evidence is ever provided to support these ideological accusations.

While it........

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