While surfing a bit on Brad DeLong’s blog I came across a reference to what looks like a very interesting paper by one of my favourite economic historians – Barry Eichengreen. He has co-authored the paper “Political Extremism in the 1920s and 1930s: Do German Lessons Generalize?” with Kevin H. O’Rourke.

Here is the abstract:

“We examine the impact of the Great Depression on the share of votes for rightwing anti-system parties in elections in the 1920s and 1930s. We confirm the existence of a link between political extremism and economic hard times as captured by growth or contraction of the economy. What mattered was not simply growth at the time of the election but cumulative growth performance. But the effect of the Depression on support for right-wing anti-system parties was not equally powerful under all economic, political and social circumstances. It was greatest in countries with relatively short histories of democracy, with existing extremist parties, and with electoral systems that created low hurdles to parliamentary representation. Above all, it was greatest where depressed economic conditions were allowed to persist.”

As usual when I see an interesting paper I want to share the reference with my readers before even reading the paper – this is also the case this time around.

So just two observations.

First, why only rightwing extremist parties? Why not also communists and other left-extremist parties? After all it was not only the nazis and other rightwing extremist parties that did well in the German elections in 1932, but also the Communist party.

Second, even though I think there is reason to fear that the present economic crisis can lead to extremism I must say that one of the positive surprises about this crisis has been that we have not seen a general rise in political extremism and even better we have not seen the kind of political violence that we saw in many countries in the 1930s. The Baltic States which truly have gone through a very deep recession since 2008 have so far come through the crisis without seeing any significant rise in extremism. There are of course horrible examples in Hungary, Bulgaria and Greece, but even in these countries the extremists parties are not in power.

Luckily these guys (“Golden Dawn” parliament members in Greece) are ‘outliers” today.