Kiwibank senior economist Jeremy Couchman on the top 5 drivers of rising populism, including living in a material world, the robots taking over, the lingering GFC effects, the decline of labour's bargaining power, and inescapable rising inequality

Kiwibank senior economist Jeremy Couchman on the top 5 drivers of rising populism, including living in a material world, the robots taking over, the lingering GFC effects, the decline of labour's bargaining power, and inescapable rising inequality

Today's Top 5 is a guest post from Jeremy Couchman, senior economist at Kiwibank.

As always, we welcome your additions in the comments below or via email to david.chaston@interest.co.nz.

And if you're interested in contributing the occasional Top 10 yourself, contact gareth.vaughan@interest.co.nz.

See all previous Top 5s here.

The root cause of most of the economic and financial risks we face today is populism. From Brexit in the UK, to the man occupying the most powerful office on the planet, populism has created seismic shifts in our international rule based system (see our 2019 outlook note for details of these risks). But where has this political force come from? It turns out many of the driving forces of populism have been bubbling away for years.

Source: Bridgewater Daily Observations

The seismic shifts to the global order, such as Brexit and rise of seemingly fringe political parties into the mainstream, stem from the pull of populist politics.

The populist narrative provides a convincing, if not false, story to those in developed nations that have seen their incomes stagnate while at the same time watched those at the top of the tree (the ‘elites’) get a massive QE induced injection in wealth.

The rise in populism has weakened many western governments, enabling China, Russia and other nations to take a bigger role on the global stage – in direct challenge to our rules-based system.

Populism is not tied to any one side of the political spectrum - tending towards the extremes of both the left and right. What is common among populists though, is their anti-establishment rhetoric, and their supposed representation of the ‘common’ people. On the left, the narrative is built along social divides – i.e. super rich vs. the poor. On the right, the narrative is built along cultural divides, wrongly blaming minorities such as immigrants for the cause of society’s ills.

“Across Europe parties of the far left and the far right are seeking to exploit this opportunity — gathering support by feeding off an underlying and keenly felt sense among some people — often those on modest to low incomes living in relatively rich countries around the West — that these forces are not working for them… Those parties embrace the politics of division and despair and the sense among the public that mainstream political and business leaders have failed to comprehend their legitimate concerns for too long.”  - Theresa May, British PM.

What is clear is that populism is not the answer to society’s problems. Yes, there are legitimate grievances caused by liberal economic policies – such as multinational corporate tax evasion, and rising inequality. But history offers us a bleak outcome when populism is allowed to run riot – WW2. Below we list the top five drivers that have given rise to the current brands of populism.

1) Globalisation – ‘Cause we are living in a material world.

In the post-war period (that’s post WW2) we in the west have only known globalisation as the true path to prosperity – after all it did win over communism.

Breaking down barriers to trade, capital flow and movement of labour across borders. We now have a much more open and interconnected world, and with it has come significant benefits. It has expanded opportunities for exporters, boosting growth, productivity and wealth.

The incidence of armed conflict has been lessened, because if you own a factory in a neighbouring country you would hardly want your own Government to bomb your neighbour. In addition, millions – largely in the developing world – have been lifted out of poverty as they have become integrated into a truly global supply chain.

But for all its positives, there have been losers of globalisation, often forgotten or largely dismissed.

Simple economic models of trade tell us that if you become more open to trade, the owners of the factor of production used most heavily in imported goods are made worse off.

In developed economies this factor has been labour, and the owners are workers. In the US the term “the hollowed-out middle” is used to describe the loss of many skilled blue-collar jobs that have been replaced by the developing world to produce the vast number of cheaper consumer products.

2) Technology –The Robots are taking over.

Globalisation and the seemingly “unfair” trade it has created (according to US President Trump) is often the focus of populists.

But an arguably bigger generator of the yawning gap between the haves and have nots is the rapid change in technology. It is believed that most of the decline in manufacturing jobs in the US since the start of the century has been due to automation, rather than the liberalisation of trade (or China).

Technological change, via automation and artificial intelligence will continue to disrupt. However, this disruption won’t be isolated to low skilled blue-collar jobs. Increasingly at risk are many white-collar service sector jobs. Jobs involving repetitive tasks, often a law clerk is cited, are low hanging fruit ripe for disruption.

But before we start crying Armageddon for the working class, there is likely to be a whole host of jobs created out of technological change that we can’t even begin to imagine. The quality of our education system is key here to help society to adapt to these changes.

3) The GFC – It came on like a sandstorm.

The effects of the GFC of over a decade ago hit hard across the developed world. And these effects still linger.

While unemployment rates have fallen substantially, a feature of developed economies since the GFC has been depressingly weak income growth. This has aggravated the despair felt by many simply trying to get ahead. Meanwhile, quantitative easing (QE), central banks’ process of buying up bonds to fight the fallout of the crisis, helped to drive up the prices of equities, bonds, and even real estate.

As a result, the owners of assets benefited at the expense of others.  And many have been priced out of the aspiration to own a home.

4) The decline of labour's bargaining power – We can work it out.

A clear trend in the developed world over the last 30-40 years has been the decline in the bargaining power of labour. Labour union membership has dwindled across many industries. At the same time labours’ share of income has fallen. Here in NZ, labour’s share of GDP fell following the economic reforms of the 1980s and 90s. The share has been largely unmoved since the early 2000s.

Also adding to the lack of bargaining power is the credible threat posed by some employers. Firms have the choice to outsource many aspects of their operations. If labour costs rise too quickly, outsourcing begins to look attractive.

5) Rising inequality – It’s hard to imagine.

Inequality is an inescapable feature of our world, in part because talent and ability are not spread around the population in equal measure. Although as Kiwis we pride ourselves on our egalitarian society, inequality in NZ is high by international standards (see chart below).

A degree of inequality is accepted by society so long as there is a sense of fairness, of social mobility, that if you work hard you can get ahead – a type of implicit social contract if you like.

However, global inequality is increasing, meaning the wedge between the haves and have nots is widening.

People are rightly questioning this social contract.

The problem is the perception that those of privilege stay privileged because they have undue influence over things, but not necessarily the talent.

In essence: ‘the system is rigged’. And if you needed an example, the case of wealthy celebs bribing their children’s way into top US universities seems a cruel joke. Added to the sense of unfairness is the prevalence of multinational corporate tax avoidance. The owners of mobile capital benefit from corporates being able to keep large chunks of their profits at arm’s length of the tax man.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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""What is clear is that populism is not the answer to society’s problems. "". Then he gives 5 good reasons for the rise of populism. What he doesn't do is give any answer to his five questions. The solutions pushed by populists in Australia, Hungry, France, Italy may all be divisive and lead to unpleasant to ugly racism but where are the alternatives?
Take one example after the GFC no banker went to jail but some of their behaviour would have sent any self-employed trader to prison.
So if populism will not dislodge the elite what will?

So if populism will not dislodge the elite what will?

Possibly, an emerging trend in political ideology called localism. As Steger writes, if we consider globalism/globalization as the dominant political ideology of our time, then;

Challengers of globalism on the Right might include national populism, new localisms, and various religious fundamentalisms with strong political inclinations. Oppositional ideologies on the Left might include global feminism, international-populism, and various ideational clusters associated with global social justice’ movements.

http://socialsciences.people.hawaii.edu/publications_lib/JPI%20Ideologie...

Here's an example of the type of literature/platform being promoted by such a localism movement;

https://www.localfutures.org/wp-content/uploads/Insane-Trade-Factsheet-F...

I wondered if the insane trade fact sheet was published on April 1st but then thought of several examples myself.
Those challengers on the Right may exist. Your challengers on the left seem to represent exactly what populism hates: some elite busybodies telling the public what to do and abusing them if they chose to do what their parents and grandparents thought was normal.
Opposing the rise of populism is left wing 'global feminism'? Seems highly unlikely.

Localism is the idea, however, we have gone too far down the track of relying on big business and giant multinational corporations to do it easily, going to be hard to even bake a loaf of bread without the involvement of the world's largest palm oil processor, Wilmar who control everything under the Goodman Fielder banner and Chelsea sugar. It just gets worse from there.
I have just shouted myself the book "Doughnut Economics" by Kate Raworth which tries to address some of this. I hope it's not too dry for me.

Managed to read the first 3rd and then lost heart and read a detective story instead. It is determined to replace each and every traditional simple concept with a more complicated concept so the supply/demand diagram becomes a donut. No problem agreeing that the old ideas are wrong - especially the idea that anything including economic progress can go up forever. But the new diagrams with a donut with (from memory) a dozen things outside and nine inside and feed back mechanisms may be a better match for reality but has little predictive value (well other than we are on the road to destruction of vital resources and who needs a donut to know that?).
Hope you finish it and it becomes clearer after the first third.

An interesting read could be Tim Jackson's "Prosperity without growth". We definitely have to address this, or we will end up in a disastrous situation and at loggerheads with each other and at war. Seems to be our old tried and true, blow it all up, burn it all down, cull a generation then start all over again. Surely, we can come up with something better than that.

MMT informed economics could save capitalism from itself. I've looked long and hard over the years for a viable progressive solution to the problems listed above and it's the best I've found.

Get beyond the "money printing"' Zimbabwe false critiques and read about it from it's credible sources - Mosler, Mitchell, Kelton, Wray. It makes sense. It offers a lot more than just lowering the OCR a few points.

So. In other words...
"Hey, I think the current system is broken. Let's turn away from the stuff we do understand and replace it with a (a not even) new approach (but some hodge-podge amalgamation of old Keynesian economics and with new over simplifications) that is championed by only a handful of poorly cited economists."

Nah. No problem there, mate. Should work fine.

Sorry to burst your bubble, but the criticisms transcend the simple Zimbabwe money printing critique.

A few questions cs. Seeing how ineffectively the provincial growth fund money is being spent currently, wouldn’t MMT just increase the incentives for politicians to buy votes seeing as how it’s basically infinite money creation and spending? MMT would be very reliant on whoever is directing the money flow. We are currently having issues with centralisation and too big to fail, wouldn’t this just be that on steroids? And do you see the MMT system as being eneviatably corrupted?

MMT is NOT "infinite money creation". It is not a command economy either. It is sensible deficit spending to fill the spending gap between what the private sector chooses to spend and what needs to be spent to ensure full use of productive resources, including idle labour. It simply recognises that this is possible because of fiat currency and flexible exchange rates.
Infinite money creation will create hyperinflation.
Fiscal policy is controlled by governments who are democratically accountable. A government that creates hyperinflation is a government that needs to be voted out. The private sector makes its spending/savings/imports decisions. The role of an MMT informed government is then to decide on what is the appropriate fiscal setting - balanced budget, surplus or deficit. It is NOT the economics of a command economy or a totalitarian leftist state. It is an economics designed to stabilise capitalism and make it work for more of us without relying on the private sector to reach a full employment equilibrium. Do you think that the current settings can go on forever? That is Utopian - to think the current ruthless settings will survive a populist backlash. MMT is not Utopian. It is sensible. Something has to be done otherwise there will be violence and instability.
The Job Guarantee is the best automatic stabiliser there is for governments. In a recession it kicks in immediately. In a boom it winds down as people prefer the high wages in the private sector. MMT, done properly, encourages spending at the bottom first to stabilise the economy. Tax cuts/ GST increases etc can be used in an inflationary setting. Politicians can make bad decisions. But so can Reserve Bank governors. At least we can vote out the former.
I would suggest reading Bloomberg - google MMT and Bloomberg- to get a sense of just how much discussion MMT is getting overseas and how traders are taking it on board and how mainstream economists are desperately trying to grapple with explaining things like why Japan never hyperinflates or defaults or experiences runs on its bond market without MMT theory. Dare I say it, Rebpublicans in the US have quietly embraced MMT - though I don't like their particular version off it.

"It is sensible deficit spending" - and there in lies the issue. Sensible to whom? We are witnessing more and more popularity politics and buying votes, this would only make it worse. Again, imagine Winston determining what is "sensible deficit spending." Terrifying thought.
It will fail for the same reason as socialism always fails when fully implemented - the centralisation of power leading inevitably to it's corruption and undoing. Basically MMT is reliant on a faultless, virtuous and wise leader which we will never have. We need systems that minimise the damage people can do, not system that amplify damage.

"Do you think that the current settings can go on forever?" - No I absolutely don't and I comment on that frequently. I've been quite clear with my critiques.

"I would suggest reading Bloomberg - google MMT" - I have been and I still can't find a convincing arguement for it. MMT isn't really a change of system, just a change of who gets the control to create money.

To offer an olive branch, I would slightly prefer MMT to what we have now but either will still lead to a collapse.

As far is I can tell unless your a Totalitarian Leftist you should want to stay as far away from this as possible. MMT allows the government to (over time) effectively redistribute wealth as it wants to. It would allow is for the government to ignore the budget, create and spend as much money as they want to and then tax existing currency back out of the system.
A truly benevolent competent socialist could get some millage out of MMT if it is used minimally (but this is hypothetical).

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On the left, the narrative is built along social divides – i.e. super rich vs. the poor. On the right, the narrative is built along cultural divides, wrongly blaming minorities such as immigrants for the cause of society’s ills.

I call BS on this. So the left are nice welcoming people who just want to make the world a better place. And right wingers are racists/xenophobes.

This constants splitting of 'left' and 'right' by the media is just fomenting hate actually. And of course it's factually incorrect too.

Jacinda wanted to slash immigration by 20,000 - 30,000.

Wasn't that was Andrew Little - he knows something about real workers and real life. Jacinda dropped the policy like a hot potato. However the changes by the Nationals has cut permanent residency approvals (although we remain a world leader in legal immigration)

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"The United Kingdom has gone mad."

Politico reported the other day that the French European affairs minister, Nathalie Loiseau, had named her cat “Brexit.” Loiseau told the Journal du Dimanche that she chose the name because “he wakes me up every morning meowing to death because he wants to go out, and then when I open the door he stays in the middle, undecided, and then gives me evil looks when I put him out.”

https://www.nytimes.com/2019/04/02/opinion/brexit-news.html

Though in reality the House of Commons is keeping the door shut in defiance of the demos. A clear indication of how much the French and the Yanks understand Brexit. And how at risk democracy is worldwide.

In NZ Winston is in charge of opening and shutting the door so our democracy is showing cracks too.

The cause is low interest rates. Populism relies upon the notion that money is freely available for popular endeavour and currently money obviously is freely available.

Low interest rates lead to increased rent seeking over productivity and accordingly greater inequality. Yes low interest rates helps populism but not for popular endeavour but more to undermine to existing structures so people want change.

Low interest rates combined with making labour bear a disproportionate amount of the tax load while giving capital and land a free ride. And then also asking the working sods to bail out the folk at the top when their plans go wrong.

The case for 5% import tariffs on everything?
Added to the sense of unfairness is the prevalence of multinational corporate tax avoidance. The owners of mobile capital benefit from corporates being able to keep large chunks of their profits at arm’s length of the tax man.

It is not the tax avoidance that is the problem, it is the job exporting. Income from jobs is what is needed. If we have well paid jobs we can afford to fund the government via GST and income tax.

“Inequality is an inescapable feature of our world, in part because talent and ability are not spread around the population in equal measure. Although as Kiwis we pride ourselves on our egalitarian society, inequality in NZ is high by international standards (see chart below).”

While that is a small part of inequality, one might be encouraged to look at historical inequality graphs and pinpoint what happened at different points when there were large changes:
https://encrypted-tbn0.gstatic.com/images?q=tbn%3AANd9GcRxgIVikaPHhpQcfk...
Got to identify the problem correctly to fix it!

Amazing chart.

Thanks Kate. The answers are there in plain sight if we can get past our dogma :)

Jeffrey Tucker has some thoughts about the rush to Statism...

The tendency toward loss of political control has inspired new, more extreme, and more obscurantist forms of selling state control to us. As the dynamics of public vs. private continue to shift, we can look forward to ever more obfuscation about the reality of displacing market forces. But once you see what’s going on you, can’t unsee it. The most effective path toward helping others see too is simple: name the state.

The bitter truth about most public policies being sold by the political class is that they give them more power to control our lives. If you favor some of these policies, be honest with the rest of us about what you mean, so that we can make more clear-headed judgments about the kind of society we want to live in.

And for Richard Fernandez (with a perhaps-obvious IT background) it's not about populism as much as about Information vs Chaos:

But which ideas must be stopped? Do the memes promoting the fear of collusion, global warming, or self-identifying gender belong to the "zone of order" or are they part of the empire of chaos? Did "collusion" originate on the Trump side or the Hillary camp? Doubtless, opinion will be divided. This requires a fine balance between privacy and freedom of speech that institutions are struggling to define.

(my bolding).

And not only 'interacting..in a manner that preserves peace' - interacting at sufficient depth to grasp the nub of the arguments and debate them rationally.

Instead of trying to interact with 'mobs of howling moralists' - another Tucker quote....

Oh, wait......

He makes some interesting points;
On Populism - I suggest he missed, although possibly implied, that politicians and the established political community, at all levels and including the bureacracy, were perceived at least, to be corrupt. This is reinforced by the increasing equity gaps that he does mention.

#1 I was most interested to hear the view that globalisation reduced the risk of war. i accept to a limit, that this may be true, at least for countries who try to be democratic. however for those who aren't, well I feel that there are som serious [bullet] holes in that position!

If globalism means multi-cultural (and it doesn't if you are Japanese or Korean) then you end up with a society like the Lebanon. Taleb mentions when he was young and there was minor conflict between groups his uncles said ' don't worry this has happened on an off for 1400 years and the leaders get togther and it will all go away in a few months. Then there was 11 years of war that left Beruit in ruins. As per Northern Ireland where their multi-cultural life ticked along quite well for four hundred years and then exploded - it cost the UK govt a massive fortune and many lost lives to resolve an issue they had swept undr the carpet for decades.

"5) Rising inequality. The problem is the perception that those of privilege stay privileged because they have undue influence over things, but not necessarily the talent".

Governments are one of the worst enablers this privilege. Instead being for the people they are for the powerful and the biggest donors to the campaign.

The depiction of populist voters is just plain condescending. Seems to me that folk usually have a very good evaluation of their situation. I would respect their view more than Jeremy Couchman does

Right and left should only be applied to things economic and the simplest expression of that is that right is of the individual and left is of the collective. An economy could be far right where it is every man for himself (or woman) and the far left could be where everything is pooled and equally divided. You can have all manner of a mix of the two along a line that could be as long as you liked. This is where you get mixed economies. Mixed economies can tend to be moving feasts where you can to greater or lesser degrees have the collective taking large amounts of taxes to provide certain services like education, policing, health care, aged care, family support, social housing, to provision of other essential services like power and communications. I am sure anyone reading this will recognise these things and a few I've left out are things we are constantly at each other about.
OK so that is left and right, next we come to the line between authoritarianism and libertarianism. Think of these as being in a north and south line, so now you have a graph rather than a line. You can put your dot anywhere along the left and right (economic line) then you can put another according to how libertarian or authoritarian you are. Where they meet gives you a far, far better idea of things than just talking in terms of left and right, We might even stop trying rip each others throats out over it,
As to globalisation, on the left and right thing, forget trying to fight it, it is here. Tell me, what do we have left here that we could really call ours, Edmonds, Molenburg, Vogels, Silver Fern Farms, power supply, communications, cars, Turners and Growers, we can't even park our own cars (Wilsons) or pick up our own rubbsh (Waste Management) without foreign ownership, so we only have to gripe about is the personal stuff, culture and laws, and the environment getting steamrolled by big business.
We need to focus on what is really going on.

left and right do correlate with other issues - say Abortion, death penalty, drug legalisation but it is quite easy to find individuals who any of the 8 combinations of those issues. Maybe you put those on the liberal/authorisation axis but you cannot map those eight combinations along with the increase/decrease taxes issue. So a useful mental aid and better than the old left-right but still simplistic.

Even on purely economic issues you need more than one spectrum. Where do you put me? Strong believer in Universal child benefit, land taxes, congestion charges, lower company taxes and higher personal taxes, no CGT but a windfall tax on the land element of all property sales, lower VAT to 10%, big cost for immigrant workers (say all income taxed at 45%), less generous superannuation, higher fuel taxes and carbon taxes.

Go to the political compass site, see link in Kate's comment. Do the test before you look at anything else on the site. It takes a wee while but it is quite in depth asking questions on morality to economics. Very interesting.

Plonked me as a mildly left wing libertarian which is not a bad summary. One or two of the questions were loaded or ambiguous but on the whole interesting. I remain unconvinced that describing anyone's views by a two dimensional graph can ever be anything but a rough summary - given a new issue (say making Winston the next GG) you cannot be sure of anyones response (well except Winston's).

The grid that you describe sounds very much like that used in The Political Compass (an analytical tool written by NZers, I believe).

You can take the test here;

https://www.politicalcompass.org/test

It's quite fun.

Yup that's it. Interesting exercise was to do that but answer as if you were Jesus. (I am an atheist fyi but accept that someone in history was that person, the ideas had to come from someone). The conclusion I came to is that some of the most fervent "Christians" fall very much into the polar opposite quarter to what I found he did.

"The root cause of most of the economic and financial risks we face today is populism"... That's a bit rich coming from a bank, I would think populism is more of an effect.. for example, in the US where the banks got bailed out and the CEOs gave themselves massive bonuses. That left a bitter taste for many, same in the EU.. politicians are not listening. And globalism? I still hear cheap labour.

The decline of labour power in NZ :

1 : Helen Clark & Michael Cullen introduce WFF ... effectively a subsidy for some workers , allowing employers to pay low wages ... at the expense of non-WFF taxpayers ....

2 : John Key and Bill English flood NZ with 400 000 or more immigrants , not specialists such as surgeons , software programmers or the like , but chefs , cow squeezers , fruit pickers and courier drivers ... thereby keeping a lid on wage pressures ...

.... Taxcinda's response to the crisis in education ? ... import hundreds of teachers from other commonwealth countries ... to blunt the negotiating power of the teachers union ....

And so it goes .... SIGHHHHHHH ...

"But before we start crying Armageddon for the working class, there is likely to be a whole host of jobs created out of technological change that we can’t even begin to imagine. The quality of our education system is key here to help society to adapt to these changes."

Unfortunately all manual labour jobs will eventually disappear. The quality of the education system will be unable to help those who simply are not mentally equipped for a job that requires the application of logical and nuanced thinking – computers will be doing all the rest of the work. And it’s not a case of being unintelligent – many intelligent people are unhappy being behind a desk and prefer working with their hands.

What will we do with them? – give them a Universal Basic Income and feed them soma as in “Brave New World”?

Technology will do far more than take over just menial tasks, it will affect almost everything, except maybe the creative. Yes a UBI will eventually need to be looked at, and it will have to be the machines that pay for it, bringing the next question "Who will own those machines?"

I think it is interesting that somehow many people think it is wrong for the voters to elect people who are popular but not always part of the political elite. I also think it is disingenuous if we refer to one group of politicians as Popularist and not refer to the other group as Elitists. The political elite has promoted policies that benefit the political elite.

The political elites do not live in the same suburbs that the huge numbers of migrants that enter Europe or the USA do and they are insulated from the social problems that arise from it. In fact, when the global financial crisis occurred it was the banks ( read political elite ) who were bailed out. The workers just lost their jobs and their houses.

There is a real issue with who pays for the political elites decisions.

UK voters saw what was happening in Germany with immigration and many understood that the only way to stop the same thing happening to their country was to Brexit the EU.

You make an interesting and valid point. These bumper-sticker labels 'Populist' and 'Elitist' are very unhelpful. It turns out 'populists' often aren't that popular, garnering support not worthy of the label. Trump's America First lost the popular vote, for example. Peters' NZ First barely scraped over the MMP threshold. But both now wield real power. On the other hand, 'elitists' always seem to win the popular vote (being truly popular). Their problem is that they preach the politics of inclusion which is hard to talk about in a bumper-sticker way. And easy to be purloined to scare-monger among those who don't want others included. But 'elitists' still win. It's odd. But the biggest difference internationally is that when 'populists' do win power, they work hard to exclude others in such a way that they gerrymander reelection. 'Elitists' do the reverse, broadening inclusiveness to include those usually outside public discourse. That infuriates the populists who see that as a loss. 'Populists' tend to use lessons from Eastern Europe to use divisive messages to rally their supporters to use that inclusiveness against them. So yes, I agree, these particular labels are being applied in a twisted way.

Interesting thoughts. All I know is that in the 70's we were spun a load of bs re the future. How machines would do all the menial tasks and the rest of us would work 20 hours a week and have loads of time to pursue our interests. Instead people are working harder and longer. We went from one adult income earners per house to a minimum of 2 and the hours have increased. So much for the "Utopian dream." A dystopian nightmare more like! Those narcissists who naturally aspire to be top of the pile in everything just can't help themselves. The will demand more and more and contribute less and less until the cycle gets blown apart just like every other period of excess in history.

In one of the opening paragraphs you say - "The populist narrative provides a convincing, if not false, story to those in developed nations that have seen their incomes stagnate while at the same time watched those at the top of the tree (the ‘elites’) get a massive QE induced injection in wealth."

Exactly what part of that narrative is false? The only thing false these days is the fake news narrative in the MSM, owned by the narcissists I am talking about, whose job is solely to maintain the status quo. Then the same MSM blink and stare in amazement when someone like the Donald gets into power. Are these people really so stupid? Don't they see that no matter how dumb they feel the general population are, they do know when something is wrong and will respond to any stimulus as long as it promises change.
Those narcissists and their poodle media really need to wake up. There will be a day of reckoning just like in previous times and it will be brutal and unforgiving. Not a threat, just an observation from a couple of thousand years of repeat behaviour from people who don't know that the outcome will always be the same.