Economics Month Kick-Off! The Populist Temptation by Barry Eichengreen

by Aline Schmidt

Over the next few weeks, the Heidelberg Center for American Studies is hosting its first Economics Month with a number of events discussing economic perspectives on the United States – from changes in global economic geography or the future of work in the US to the interweaving of populist surges and economic turbulences.

To kick it off, the HCA has collaborated with the Economics Department and the American Chamber of Commerce in Germany to welcome economic historian Barry Eichengreen to Heidelberg. Eichengreen currently holds the George C. Pardee and Helen N. Pardee Professorship of Economics and Political Science at the University of California, Berkeley. His work is balancing dedicated in-depth research, detailed observation, and careful documentation of patterns and fluctuations throughout the economic history of the West. In his talk The Populist Temptation: Economic Grievance and Political Reaction in America, he discusses some key arguments from his 2018 book of the same title, placing contemporary populist surges across Europe and the US in historical and sociocultural contexts. As the HCA’s Director Welf Werner puts it, “Barry Eichengreen’s research reminds us of the economic turmoil and socio-structural tendencies before Trump, and that history casts a long shadow.”

While populism has become a buzzword over the past few years, Eichengreen acknowledges a kind of populism fatigue, a reluctance to place the rise of right-wing movements, from Trump’s electoral success and Brexit to the recent EU elections, in the ‘populism bin.’ Certainly, the political landscape has changed significantly, and we seem to observe similar patterns in the EU and the US. But is there actually any consensus about the definition of the term, and is it a meaningful concept to make sense of the political phenomena we observe at the moment?

In a way, Eichengreen notes, the only consensus appears to be strangely parallel to Supreme Court Justice Potter Stewart’s categorization of pornography – “I know it when I see it.” In other words: there is barely any consensus about the conceptual boundaries of populism. Eichengreen follows his own definition of populist movements as those movements that show “anti-elite, authoritarian, and nativist tendencies” (Eichengreen 2018: 7).

Populism may be an elusive concept, and Eichengreen’s parameters may help place certain political movements along a populist spectrum. But in order to understand populism, we must look farther and deeper. Why do some populist movements gain more traction than others? And why now?

Eichengreen’s argument is clear: Poor economic performance is the hotbed for populism. Current political shifts go hand in hand with rising inequality, declining social mobility, a loss of hope and a dire vision for future generations; people perceive a sense of economic insecurity, and they lament a lack of political alternatives. Political outsiders like Donald Trump and new parties like the Alternative für Deutschland benefit from these economic anxieties and can successfully stage themselves as the saviors of the people.

At the same time, globalization and technological advancement promise an immense improvement of the economic conditions and possibilities. And, of course, everyone wants a share of that pie. Yet, some people feel that they are left with merely crumbs. They experience greater social inequality and economic insecurity in their lives. Who is to blame? Economic hardship and a sense of exclusion increase the susceptibility to the populist temptation that pits the common people against the elites.

USA, 2009. “Tea Party” by Susan E Adams.

Of course, populism is about identity, too. The rhetoric populists employ is textbook identity politics. Right-wing populist movements tend to foreground nativist resentments against foreigners and liberal ‘social justice warriors’ or Gutmenschen. They feel a threat to the majority, a loss of tradition and a decay of value systems by ethnic, racial or religious minorities. What is perceived as progress by those embracing values of religious and sexual freedom, equal human rights and open borders, seems to undermine the ontological security of others. Populist politicians appeal to these fears and tap into a dangerous nostalgia of mythologized national history and tradition in order to push a right-wing/nationalist agenda.

Identity politics is powerful, Eichengreen notes, but it is most powerful when it can unfold against a backdrop of economic hardship. “Economic grievances and identity politics feed on each other.” (Eichengreen 2018: 11)

Populism in the US is deeply rooted in national identity and an American individualist ethos, Eichengreen argues. Individualism, the glorification of income and entrepreneurship as well as market fundamentalism are inscribed in the material roots of American culture, and so is anti-governmentalism. Historically, this is exemplified in the populist revolt following patronage and corruption concerns in Postbellum America, or in FDR’s New Deal. Today, businessman-made-politician Donald Trump is a figurehead of these individualist values and the distrust of the political establishment.

Small economies like those in the EU are not only more vulnerable to external shocks and thus must rely on governmental buffering; anti-authority attitudes have also produced an insufficient welfare system. Looking to Europe, the role of the government in the economy is more prominent (e.g., trade adjustment assistance, taxation of income, social insurance systems). Eichengreen notes that the idea that the primary role of the government is to regulate markets in a way as to counteract detrimental effects on social equality seem radical to an American. He admits that he may be romanticizing, but from a European perspective, Bernie Sanders’ 2016 campaign was not perceived to be as ‘radically socialist’ as in the US, but rather comparable to the agendas of centrist European social democrats.

According to Eichengreen, another reason for the American susceptibility to populism (or a lack thereof) may also lie in the presidential system and the electoral college versus, for instance, electoral reforms following WW2 in Germany. The World War has also left deep marks on European identity, a history lesson on populism that the US does not share. Eichengreen does not mean to generalize, and he notes important historical exceptions (e.g., the expression of anti-elitism as the distrust of the EU by the UK) and further factors that need to be considered when talking about the potential of populism (e.g., the role of the media and the makeup of national mediascapes).

Nevertheless, Eichengreen aptly traces the interworking between politics, policy, identity and economy, and teaches us a lot about our time, but also about the role of the scholarly expert. Crossing disciplinary boundaries may open a dialogue that builds bridges – both between disciplines, and between research and the public. The obligation of researchers is to  make their knowledge accessible for the public, to offer them a gateway into building an informed opinion based on well-documented research – no matter the topic. For the issue of populism, this seems to be more relevant than ever.


Eichengreen, Barry. 2018. The Populist Temptation: Economic Grievance and Political Reaction in the Modern Era. New York: Oxford University Press.

“Tea Party”, by Susan E. Adams, 2009. Photograph licensed under CC BY-SA 2.0. Online at <>

The next lecture in the series is on June 11, Alte Aula, where Robert Zoellick, former President of The World Bank, former US Deputy Secretary of State, former US Trade Representative, will be speaking on The Changing Global Economic Geography. For more details about upcoming events see the program, and stay in the loop by following along here on our blog where we will be posting regularly.

Cite this blog post
The Editors (2019, June 5). Economics Month Kick-Off! The Populist Temptation by Barry Eichengreen. HCA Graduate Blog. Retrieved May 22, 2024, from

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