Trump is a populist in a suit and tie, not a jackbooted fascist

Panic is setting in. “Watching Donald Trump’s rise, I now understand … exactly how Hitler could have come to power in Germany.” Thus my Harvard colleague, political theorist Danielle Allen.

“(Trump’s) remedy is 1930s to the core: nationalism, crude bombast, mytho-history and sloganeering.” Thus Victor Davis Hanson, also a colleague at Stanford’s Hoover Institution.

Welcome to Weimar America. I respect these writers, but I’m afraid I don’t buy their analogy. If we had re-run the Depression after 2008, then Weimar Germany might be relevant.

But we didn’t. The US stockmarket cratered after 1929. Eight years later it was still 54 per cent below where it had been at the peak.

Today, US equity markets are 24 per cent above where they were at the pre-crisis peak in 2007. The German jobless rate in 1932, the year of Hitler’s two election victories, reached 25 per cent.

The unemployment rate in the US today is 5.5 per cent. This is not the 30s.

In fact, a much better analogy is the period from the mid-1870s to the mid-1890s. On both sides of the Atlantic, the crash of 1873 was followed by a period of deflation.

This was an age of industrialisation, globalisation and mass migration. Rapidly expanding production of iron and wheat and the tight monetary policies imposed by the gold standard resulted in deflation. Contemporaries spoke of a “great depression”, but the impact on output and employment was minimal compared with the years after 1929.

Like the late Victorians, we, too, are living in an age of industrialisation (in our case China’s), globalisation (they had the telegraph, we have the internet) and mass migration (in those days people fled Europe, now they flock to it).

We, too, have seen a vast expansion in the production of industrial and agricultural commodities. True, we don’t have the gold standard, but despite the creative exertions of our central bankers we do have something close to global deflation: very low inflation in most countries, falling prices in a significant number.

We avoided a 1930s-style slump. But, like our great-great-grandfathers, we are experiencing a period of stagnation compared with the pre-crisis boom.

And if you doubt my analogy, just ask yourself when beards were last as popular as they are today.

In a delightful 1976 article, based on a study of pictures in the Illustrated London News, sociologist Dwight Robinson showed that facial hair peaked in the 1880s and declined steeply thereafter until the 1970s. The correlation with rising inflation is remarkably close.

But as inflation has fallen, beards have returned.

In the 1880s, as today, the result of stagnation was not fascism but populism.

Fascism was all about violence: marching men in uniforms, battered opponents, rearmament, war. The violence of populism is mostly verbal. Populist leaders are demagogues in suits, not jackboots.

They insult their opponents, they don’t break their legs. They tend to be against overseas wars. This is not to say that Donald Trump is identical to William Jennings Bryan, the bombastic populist orator of the late 19th century, only that he is much closer to Bryan than to Hitler.

As in Bryan’s day, the populist backlash is directed against: a) financial elites and their political cronies, b) free trade, c) immigration and d) racial integration (though this last is not explicit today).

Populists base their appeal at least partly on xenophobia. Today, Trump complains about Chinese, Mexicans and Muslims; in the 1880s populists were more likely to be anti-Semites or segregationists. Yet populism is about more than bigotry; its core economic argument has some substance. “My fellow white Americans,” Trump is essentially saying, “I know you feel less good today than you expected to feel. I know you feel America is no longer great.

The people you should blame are people like my opponents (professional politicians with ties to the banks), the Chinese (shorthand for globalisation) and Mexicans (immigration).”

I think this is mostly wrong. But Trump is winning because no other candidate has a more convincing explanation of why so many Republican voters genuinely are worse off today than in 2000. And the key to his success is that he blames George W. Bush and Barack Obama — both Republican and Democratic party elites.

There is nothing specifically American about populism.

As in the 1880s, we have it in Europe, too. Here, the EU has become the scapegoat for all the grievances of middle England.

It is not just that Boris Johnson has the Trump-like quality of being a tousled, unfiltered version of a national archetype. Everyone who is jumping on the Brexit bandwagon is indulging in an English version of Trumpism. It is all about bashing party establishments and limiting the mobility of labour.

The populism of the Left differs from the populism of the Right. Democratic contender Bernie Sanders and Labour leader Jeremy Corbyn are more likely to blame bankers for inequality than to blame immigrants for low wages.

But the key to populism is that it comes in these two flavours, so it attacks the dominant forces of the postwar era — the centre-Left and the centre-Right — from both sides.

Can populism come to power? Of course. There are populists in power already in Greece, Hungary and Poland. Anti-immigration parties are riding high in The Netherlands and Sweden. And Russian President Vladimir Putin is in some ways the ultimate populist, whose interests all of this serves.

What, if anything, can be done? The German answer is the “grand coalition” of moderate Right and moderate Left. That at least keeps the populists out of power.

We saw a version of that coalition decide the Scottish referendum in 2014.

David Cameron will be hoping that joining forces with Labour will work for him again in June.

But the US doesn’t seem to have this option. So long as there is more than one other contender for the GOP nomination, Trump wins.

Meanwhile, he knows that Sanders is knocking chunks out of Hillary Clinton.

She will probably still win the nomination, thanks to the rigged system of “superdelegates” at the Democratic convention. But no one can rule out Democratic defections to Trump when it comes to the crunch on November 8.

The only hope we are left with is that the US constitution was purposefully designed to prevent a demagogue from becoming president (Bryan failed three times) — and, if one nevertheless made it to the White House, to stop him exercising dictatorial power.

The irony is that populism so clearly doesn’t work. In the part of the world where constitutions repeatedly have failed to keep populists out — Latin America — it has been tried again and again, by the Right and the Left. Bankers get arrested. Tariffs get imposed. Border fences get built and sometimes fought over. The result? Visit Venezuela.

The question is whether we in the northern hemisphere need to relearn this lesson the hard way. That is the right thing to panic about.

The Sunday Times

Niall Ferguson is Laurence A. Tisch professor of history at Harvard and a senior fellow of the Hoover Institution, Stanford.