On Populism: Remarks by Dr. Ernesto Zedillo at the 2017 Latin American Policy Forum

Publication Note: These remarks were delivered by Dr. Ernesto Zedillo at the 2017 Latin American Policy Forum, which took place on April 21, 2017 at the University of Chicago. We thank the Harris School of Public Policy, Latin American Matter(s), and Dr. Zedillo for the opportunity to publish this transcript, which has been edited from its original version. 

This being a “Forum on Latin America” at a time when peculiar events are happening not only in our region but also in other parts of the world, I thought that finding a topic that could make us think of the peculiarities in front of our eyes based on the Latin American experience could be interesting.

Finding such topic was not very difficult. I was placed on the path to get it a few days ago when, as a participant at a round table discussion, the moderator turned to me and said, “OK, Professor Zedillo now let us talk about populism.”

Given how frequently nowadays the word is used to discuss some recent political outcomes and prospects, I had no problem understanding why she wanted to have a conversation about the topic. What I found harder to grasp on the spot was the reason why she had turned to me to deal with such issue.

So I questioned her: why me?

I got a very concrete and illuminating answer. She simply said, “Obviously because you are a Latin American!”

Flashing back momentarily to the history of our region, I had to concede that if even for the wrong reason, we Latin Americans should know a thing or two about populism.

In not just a few of our countries, including the big and the small, populism has had a recurrent presence with consequences not exactly glorious. This unhappy circumstance makes it very tempting to recover from our memory some elements of the Latin American populist experience that could resonate with current events in a number of important Northern, non-tropical, countries.

Obviously, my comments should not be taken as an attempt to provide a comprehensive and rigorous review of our populist travails. It is simply a hurried abstraction of multiple episodes of populism in Latin America.

Being a hurried abstraction serves as an excuse for my not giving, as a rule, specific references to cases (countries and characters), which I have in the back of my mind as I make these comments.

A first observation is that, against claims by some political scientists, populism as practiced in Latin America, is not really an ideology.

We have had populism from both the right and the left, which makes evident that the phenomenon doesn’t constitute a particular ideology. Plainly speaking, populism has been essentially a political tactic to gain or/and preserve power, democratically or not.

This is important: Political scientists like to claim that populism is kind of a bad child of democracy, for it cannot emerge and exist without the latter. Not really, populism has been used in our region to grab and retain power by wholly undemocratic means.

Nevertheless, both categories of populist-power-seekers—democratic and undemocratic—have in common a number of tendencies.

Populists pursue popularity and power by making sweeping promises to deliver magical solutions to the very real problems of poverty, social exclusion, insecurity and lack of economic opportunities effectively suffered by the population.

Every populist practices political Manichaeism.  In the populist discourse, every problem confronted by the country and its people only exists because the “bad guys” have been in charge. If the “good ones” are given the power, then problems will get solved just by virtue of good will.

Oversimplifications—bordering on (if not outright) lies to appeal to the emotions and frustrations of the public—are used freely by the populists to achieve support in their quest for power. Undertaking persuasion by means, not of reason, but of passion, prejudice and ignorance is a frequent expedient of the typical Latin American populist. They all claim to be not only calling upon to the people, but also in fact representing the people, as if with sacred designation.

The essential fantasy of the populists is that not only that they alone represent the people but also that they incarnate the people. They also like to claim that they are the redeemers of the people. However, for the populists, “the people” are regarded as only those who support (or at least tolerate) them.

Consequently, those citizens, who are neither active nor passive supporters, are not acknowledged by the populists as being constituents of the people; instead they are considered enemies of the people. For this reason, populists feel entitled to insult, ridicule and repress their opponents. Furthermore, it is not uncommon for populist politicians to encourage their supporters to intimidate political opponents with every conceivable means, even violence.

In short, populists despise pluralism.

In the name of their purported embodiment of the people, populists feel entitled to abuse power as soon as they have it. After all, whatever they do they claim to do it on behalf and for the benefit of the people. They seize the state institutions, weaken them with the excuse of eliminating the barriers between the leader and the masses, and whatever is left of those institutions, populists use them as an instrument to keep and enhance their own power.

In particular, populists set about at once, by legal or illegal means, to incapacitate precisely those institutions that exist to check and balance the executive branch. They go to the extreme of having their countries’ Constitutions changed or even fully replaced to enhance and extend their power, not least by allowing repeated reelections where it did not exist previously.

Similarly, populists in power do anything within their legal and illegal capacity to stifle and if possible fully suppress civil society. The same attitude rules with respect to the free press, which from the outset and as long as it survives is considered to be political opposition. For populists, no opposition is legitimate for only they themselves are supposed to speak on behalf of the people.

Populist leaders are effective in making their supporters believe that they are part of something historically unique, like a profoundly transformative social revolution or a decisive resistance against foreign imperialism.

It is thus not surprising that some Latin American populist leaders, even when democratically elected, have transformed themselves into autocrats or, even worse, outright dictators. It has also been observed that populist leaders, even if cool headed and rational at the beginning, end up being messianic and delusional as they gorge themselves with power. They would use every means at their disposal to foment their personality cult among the population.

They are not shy about naming government programs, avenues, parks, schools, monuments, buildings, etcetera, etcetera, after themselves. Weak institutional restraints, repressed civil society, and an intimidated or co-opted press, make it easier to abuse power with immediate consequences on how public resources are used.

Patrimonialism, unfortunately a constant throughout the history of the political ethos of Latin America, becomes exacerbated under populist regimes. The patrimonialist approach to using public resources facilitates corruption and very importantly serves to pay for clientelism.

As long as the populist leaders have the resources, these are applied to strengthen their core political base of supporters. Populists pay for loyalty while severely punishing criticism and opposition. They use that loyalty to promote conflict against the democratic opposition and ardently pursue polarization in society. Populists make patent and profuse use of class conflict.

It is interesting, however, that populist’s leaders’ relationship with the so-called elite typically goes through a hate-love-hate cycle.

Populists establish themselves in power by finding support from citizens with resentment, frustration and anger towards the economic and political elite. Once in power, rather soon the populist leaders, and at least some part of the elite, pursue mutual accommodation.

For a while the populist leader and the elite play with one another a “useful idiot” game, in which members of the elite bet on manipulating the populist leader by pampering his narcissistic and messianic inclinations, even becoming willing to support some policies that they have traditionally opposed and that could possibly go against some of their interests—but they do it with a view to preserving, on balance, their “capture” of the system.

In turn, the populist leader likes to believe that he has achieved early surrender from the elite and sets about using this group to advance his agenda. The tacit mutual understanding between the populist leader and the elite lasts while the economy stays out of deep trouble. When it “goes south,” the mutual acrimony and mistrust between the populist leader and the elite reemerges with great force. The “full package” of populism frequently includes anti-market economics; xenophobic and autocratic nationalism; and authoritarian politics.

Populists have a marked tendency to blame others for their countries’ problems and failings. They advance and disseminate conspiracy theories in which “bad” persons, organizations and entire countries cause all conceivable troubles.

They put the blame on fellow citizens who oppose the government and, with equal or more intense ardor, on foreigners who invest in or export to their country. Restrictions, including draconian ones, on trade and foreign investment are an essential part of the populist’s toolkit. Populists praise isolationism and avoid international engagement, except with their foreign populist cronies.

They are especially defensive towards international institutions and organizations that may denounce their abuse of power. In fact, they attempt to disqualify such entities as foreign aggressors trying to violate national sovereignty. Populists display their protectionism and xenophobia as proof of their “authentic patriotism” and excel at manipulating the public’s nationalistic sentiments to execute their retrograde economic and political agenda. From the perspective of economic policy, fiscal and monetary profligacy is the most distinct characteristic of populists.

When I was a graduate student I stumbled, in a book at Yale’s Sterling Library, onto a quote from a letter written in 1952 by President Perón of Argentina to the newly elected President of Chile, General Carlos Ibañez del Campo. The quote left on me a lasting, almost traumatic, impression as to what populism really meant. I regretted for years that I had not copied it so that I could repeat it textually later on.

That is why I was so happy to find it again in a 2010 book by the admirable Chilean scholar Sebastián Edwards (a graduate of the University of Chicago, by the way).

And I cannot resist the temptation to repeat to you what General Perón wrote to General Ibañez:

My dear friend: Give the people, especially to the workers, all that is possible. When it seems to you that already you are giving them too much, give them more. You will see the results. Everybody will try to frighten you with the specter of economic collapse. But all of this is a lie. There is nothing more elastic than the economy which everyone fears so much because no one understands it.    

Well, that nobody understands the economy may be true, but about the rest of Peron’s advice to his friend I hope you will agree that it was not only not good but rather fatal.

In any case, populists as a rule disregard essential economic principles and try to use lavishly the elasticity of which Perón was such an enthusiastic—and obviously wrong— believer.

Volumes have been written about the economic consequences of populism in Latin America and logically this is not the moment or place to present all the evidence contained therein.

It is possible, however, to state categorically that as a rule all populist governments and leaders have failed in Latin America. They might have had periods of apparent success, explained ironically mostly by favorable temporary international conditions, but practically invariably their economic and political stories have come to a sad end.

The populists’ experiments to stimulate the economy and redistribute income with excessive fiscal deficits and command and control interventionist and protectionist policies, in many cases have ended in economic catastrophe where the poorest segments of the populations have suffered the most devastating consequences.

Untamed economic populism where practiced in the region has resulted in deep recession, high unemployment, runaway inflation, balance of payments crises, increased poverty and worse income distribution. Cruelly, but logically, populist governments, all of which promise to make their countries more independent from foreigners, end up making them more dependent on and vulnerable to foreign powers.

Tragedy is not a metaphorical description of how more than a few populist governments have concluded in Latin America. Tragedy for the people and tragedy also for the populist leaders has been the recurring concrete finale to those sad episodes of our history.

Making a proper recollection of this history—certainly more reflectively and analytically than what I have done during these few minutes—is pertinent at least for two important reasons. First, we should wish that those toying nowadays with their own populist experiments be enlightened by our well-documented populist failures in Latin America.

Unfortunately, our region has been the ground zero of populism and demagoguery, and we have paid immensely painful consequences. Let people know in faraway places, including in developed countries, what has happened to us when we have listened to the siren songs of demagogues.

Second, and closer to our hearts, we want to avoid a repetition, yet again, of history in our own quarters.

As we all know, after the euphoria of the good years supported by the super commodities cycle and the resilience exhibited during the worst phase of the Great Crisis, most of our economies have been suffering much slower growth—even unprecedented recessions like in Brazil, thus posing a threat of reversal for the significant gains in poverty reduction and improved income distribution achieved in the first decade and a half of this century.

As confirmed by the International Monetary Fund World Economic Outlook released this week, as the global economy seems to be gaining momentum making the Institution raise its forecast for world output growth in 2017, the opposite applies to the Latin American region where its GDP forecast for both 2017 and 2018 has been revised downwards again to 1.1 and 2.0 percent respectively.

This will be the fourth year in a row that the region will have a rather lackluster economic performance, not only relative to other emerging regions, as has been the case for too long now, but also relative to its own immediate past.

GDP growth, which had averaged close to four percent in the ten years previous to 2014, will have averaged between that year and 2017 only 0.3 percent. Needless to say, the biggest concern stemming from the region’s lackluster performance is its effects on poverty reduction and income inequality.

As reported by Economic Commission for Latin America in its Social Panorama of Latin America published in February, progress in reducing the average rates of poverty simply stopped in 2014 and actually could have backslid in 2015. Although average income inequality still decreased in 2014, it is doubtful that the trend towards less inequality was sustained in 2015. Given the disappointing overall economic performance of the region over the last four years, 2015 could well be marked, when the pertinent statistics become available, as an inflection point for the worst in the region’s struggle to reduce poverty and inequality.

Do these unfortunate events along with the populist wave in some parts of the developed world constitute strong tail winds for a revival of populism in Latin America?

It is possible but, I would hope, by no means certain. It is true that when the economy performs poorly and people’s expectations for progress are negative, there is fertile ground for demagogues to try to win power promising Manichean, painless and quick solutions for the population’s afflictions.

Populist politicians will retrieve, and if convenient update, their old manuals, which I actually summarized a few moments ago.

They will also know that the aggressive rhetoric of Northern populists in turn will make it easier to arouse nationalistic, xenophobic, and isolationist sentiments among the Latin American populists’ own electorates.

Nevertheless, I am confident that the risk of a populist resuscitation in Latin America will be significantly mitigated. I base my modest opinion on three sets of considerations. First, our electorates will not have to go far back in history to visualize the fallacies and failures of populism in Latin America. The worst calamity caused by populism in our region is taking place as we speak.

We are watching in real time the catastrophic economic, political, and social consequences of a populist “revolution” that has assiduously applied every single policy, artifice, and trick contained in the most comprehensive handbook of Latin American populism.

It is practically unprecedented in modern world history that a country that for a number of years enjoyed an immensely favorable external shock in the form of record high prices of its main export product, which translated into huge revenues, could over the same period become impoverished, have its physical and human capital decimated, become practically insolvent, and manage to become an archetype of political repression and destruction of democratic institutions.

Unfortunately, though certainly the worst, this is not the only living example of Latin America populist travails. Present and past calamitous populist experiences should provide food for thought to our electorates in the years to come.

Second, mitigating the risk of a populist revival should also depend on the quality of the truly democratic alternatives for political leadership in our countries. In the present context of moody and resentful electorates, flawed political competitors—even if true believers in democracy—would be easy prey for populist demagogues.

One thing that seriously democratic politicians should not do is to compete with populists on the latters’ own terms, that is by making irresponsible promises. Our electorates should be treated with respect and offered candid diagnoses of our problems and realistic solutions to them.

Integrity is the best antidote to demagoguery. Integrity is not just a matter of personal honesty; in politics, it is also about proposing to citizens with clarity what should be done along with how it will be done.

Integrity requires speaking truth to people about the challenges that lie ahead to make our countries’ development converge at last with those with which we prefer to compare. Political integrity comprises certainly the recognition of progress made in our countries since the lost decade of the 1980s but more importantly the admission that the tasks still pending—to achieve higher growth and truly inclusive development—are numerous and highly demanding.

Informing and deliberating frankly with citizens about those pending tasks will be of paramount importance to achieve the political and social consensus without which significant progress would be impossible. Thirdly, I am hopeful that, ironically, the newly reinvigorated Northern, non-tropical, populism will also serve to inoculate us from a relapse into the Latin American populist disease.

On the one hand, I trust that the Northern populists will soon be discredited due to the flagrant inconsistencies, bordering on absurdities, of their purported policies and actions.

On the other, I am very confident that the established checks and balances—admittedly much more solidly built than those in our Latin American political systems—will not only limit the damage made by the non-tropical populists but also will be capable of applying exemplary correctives to their deviant behaviors, correctives that should serve to reinforce our own democratic convictions and practices.

Ultimately the message is that we should not imitate those who sadly are now imitating what some of our Latin American countries did in the past and sadly a few still continue doing in the present. Let us just feel sorry for our Northern friends while we Latin Americans keep trying to do the right thing for our own development, never forgetting that international coordination, interdependence, cooperation, and solidarity are in our own national and regional interest.

Biography:

Dr. Ernest Zedillo was president of Mexico (1994-2000). He started his career in public service as an economic analyst in the Bank of Mexico. During Carlos Salinas Administration (1988-1994), he served as Secretary of Programming and Budget (1988-1992) and Secretary of Education (1992-1994). In 1994, he served as the Campaign Manager for Luis Donaldo Colosio, presidential nominee of the Partido Revolucionario Institucional (PRI). After Colosio was assassinated, Zedillo took over as the candidate and went on to win the presidential election in August 1994.

During his six-year term, President Zedillo dealt with a deep economic crisis and growing demands for democratization from the civil society. He strengthened the electoral and human rights commissions and created Progresa, the first conditioned-cash transfer program in Latin America, which became the model in the region. In 2000, his last year of office, the Mexican economy grew six percent in real terms. President Zedillo oversaw a peaceful democratic transition when Vicente Fox, from the opposition party Partido Acción Nacional (PAN), won the presidential election, ousting the PRI after 71 years.

After retiring from public life, President Zedillo became the Director of the Yale Center for the Study of Globalization at his alma mater. He also sits on several corporate boards as an independent advisor. He is still active in global forums, where he pushes for an agenda towards the legalization of drugs, fights climate change, and promotes trade.

​Dr. Zedillo holds a BA in Economics from the Instituto Politécnico Nacional (IPN) and a PhD in Economics from Yale University.