A warning from the past: The politics of Trump and Corbyn – it is time for classical liberals to wake up

When I see what is being said about the new Labour leader in UK Jeremy Corbyn I fear that we are underestimating the change in electoral preferences in Europe.
It is said that Corbyn will cause Labour to collapse from within. That might very well be, but ask yourself why he was elected in the first place. And then ask yourself why Donald Trump is doing great in polls in the US and Syriza ruled Greece for six months and might – god forbid – continue to rule the country for sometime. 
What we are seeing is 1930s style politics. It is the politics of fascists and communists. It might be much less extreme, but remember these things don’t happen overnight. It is a gradual process where men in nazi uniforms put on suits – as they are doing in Sweden in the form of the Swedish Democrats. Or keep on the uniforms as Jobbik in Hungary.
It is a reflection of the fact that we are now eight years into an economic crisis – in my view mostly a results of failed monetary policies – as it was the case in 1930s. Mainstream democratic politicians failed to get us out of this crisis. In fact they made it worse and therefore people who otherwise would never have voted for Corbyn or Trump are now willing to listen to them.
And with mainstream democratic politics weakened in the US and Europe authoritarian figures from Putin, Erdogan, Orban and Assad are now increasingly setting the agenda for Europe and the world.
We might be on the way out of the crisis economically in both the US and Europe, but remember that was in fact also the case in 1936. The US had given up the gold standard as had many European countries, but the economics turnaround came too late to change the political sentiment. The result was catastrophic. And with anti-immigrant sentiment increasing in both Europe and the US we have reasons to fear the worst. The fact that it is now becoming political acceptable to suggest mass deportation of Mexican immigrants in the US or of muslims in Europe is horrendous.
The similarities between the Great Recession and the Great Depression are unfortunately many. That also goes for the politics and geo-politics of the times: Populism, extremism, anti-foreigner politics, protectionism and war.
And who are most to blame other than the central bankers that brought us into this mess? Well, the classical liberals – like myself – who again and again failed to speak out against these tendencies.
Classical liberals initially had a very hard time identifying the causes of the crisis and many resorted to ill-informed internet-Austrian analysis of the crisis instead of embracing the monetarist explanation of the crisis (think of Hayek versus Cassel in the 1930s). This has caused classical liberals to oppose monetary easing that would have ended this crisis long ago. As a result many classical liberals – particularly German style ordo-liberalists – should be blamed for helping to create an economic situation, which have created the fundation for the populism and extremism.
Classical liberals also failed because they ignored the social injustice done by the massive rise in unemployment in Europe and partly in the US and the effect that has on the political sentiment. Classical liberals didn’t really care about the suffering of Europe’s unemployed – as was the case in 1930s. In Greece and Hungary parties like Golden Dawn and Jobbik show that they care (or rather pretend to care) for the suffering of the unemployed.
At the same time many classical liberals out of fear of the effects on public finances have not spoken out against the anti-immigrant rhetoric and as a result borderline racisme has become politically acceptable on the political right in the US and Europe.
Effectively the centre-right is no longer providing a message of hope and optimism. Instead the centre-right is increasingly being taken over by anti-immigrant crazies like Donald Trump and on the left the centrist and market oriented (social) democrats of 1990s have been replaced with people like Jeremy Corbyn who has praised IRA, Hezbollah and Hugo Chavez and who dream of a Great Britain where militant labour unions rule the land.
It is time for a counter-revolution against the politics of fear and hatred. It is time for liberals of the left and the right to speak out against those who would like to close the borders for goods, capital and people. It is time to speak out against the authoritarian tendencies in Europe and US politics and to the the libertarians who like the feeling of revolution and the anti-establishment sentiment, which is in the air when Trump and Corbyn speak I tell you – Hitler was also anti-establishment.
If we fail to speak out against racism and protectionism of Donald Trump and the economic fantasies of Jeremy Corbyn we will lose our freedom. 
Leave a comment


  1. Vangelis

     /  September 18, 2015

    Typically wise and thoughtful words – a warning indeed and something to ponder

  2. One remark : Thomas Sowell often made the following point over immigration, humans are not goods, when they cross borders they are not neutrals, they bring with them their culture, their mentality, their beliefs, and noone can claim that the impact is overall good when you have such a gap of common grounds of understanding. It cannot be said that a classical liberal would defend unchecked immigration based on the abstract and non-differentiated image medias give on them. This cannot simply stand the test of reason

  3. Sierra Tango

     /  September 18, 2015

    For most of the European welfare states, the problem with immigrants is that they cost the taxpayers a lot of money. That is a major strain on especially the overtaxed countries. Add that they bring an incompatible culture and often a refuse to adapt to the host country and you should understand why the solution can’t be to import more people. We have again and again shown that we don’t know how to assimilate immigrants especially those with a muslim background, but also plenty of other groups. The failure to assimilate the immigrants leads to splits in the population and that leads to conflict. Worst case is war, but plenty of terrible options lies before that.

    • I think you just have proven my point.

      • Sierra Tango

         /  September 19, 2015

        If I understand your point correctly. It is that we have to continue to take in refugees and that people who speak out against this should be opposed by the classical liberal segment. As you write “It is time for liberals of the left and the right to speak out against those who would like to close the borders for goods, capital and people.”. While I do see the advantages of free trade, we do have a problem with the costly refugees. I’ll take the bad guy side of your argument and be the one to speak out against receiving more refugees. Part of the population believes (correctly or incorrectly) that the refugees will cost the country money and that there is a potential for terrorists among the refugees. This will cause an opposition to the refugees. Most of the anti-refugee segment of the population are (like most everyone else) unwilling to listen to rational or scientific evidence (just like most of the pro-refugee part of the population) and thus we will be guaranteed to have problems with them in the future. The refugees who experience the hate from these groups will likely also become more extremist in their opposing attitudes and that’s when we will see conflict begin to arise.
        SO what do we do about this development? All the solutions I have seen proposed have a major segment against it and is thus likely to breed problems. The only solutions that won’t lead to conflict is keeping the refugees away from the people who don’t want them, but we also want to help, so how do we do that? I guess that you understand, that “speaking” out against the opposition won’t do much, some form of action have to be taken, but which actions won’t lead to the war that you are predicting?

        Or are you just saying that we will see a major s**t-storm in the next 10 years, so gear up and get ready?

  4. Excellent post, Lars.

  5. Excellent, thought-provoking post.

    And doesn’t increased immigration mandate an increase in the money supply? Are these new immigrants the magic to soaking up the excess reserves?

    We need to wake up and insist that we nominate adults to leadership positions, not flamethrowers. Trump’s shtick will soon grow tiresome, as will Bernie’s. Hillary’s lifetime of lies and deceptions have, hopefully, become apparent. Who is left?

  6. Letting unlimited number of Islamic immigrants arrive in Europe in not less crazy than returning to the gold ratio.The immigration policy you seem to support is part of the problem, not part of the solution.

  7. The support for Trump and his anti-immigration policies in the US comes from the same kind of stupidity as support for microscopic levels of inflation during a recession with skyrocketing unemployment. But unlike tight money that stealthily robs millions of the fruits of their labors and opportunities for the future that can be easily blamed on someone or something else, it’s quite difficult to lay blame for the ugly scenes of forcibly removing people and ripping families apart on someone other than government. Many of Trump’s supporters have been told by demagogues, including Trump himself, and believe it that illegal immigration hurts them economically. But they do not have a clue what his policy really means in much the same way we don’t really think about how hamburger gets to the grocery store; we just buy it and eat it. In an undeserved defense of my fellow countrymen, I am pretty confident that if Trump ever gets the opportunity to implement his immigration policy, a long shot as his support is a noisy minority, it will be very short lived once the non-stop video accounts of deportations start hitting the 24×7 news outlets for people to see and be appalled by their government in action.

  8. This is probably a step too far, but I think you need to consider that the indifference to the problems of ordinary people is built into classical liberal economics and politics. It’s a natural result of the philosophy.

  9. Jean

     /  September 19, 2015

    Good news Lars! Fiorina has taken the lead in New Hampshire amongst likely Republican voters – by four points.

  10. Jose Romeu Robazzi

     /  September 20, 2015

    Mr. Christensen, although it looks that the classical liberals did make a mistake on monetary policy, that is about the only thing I think is reasonable about your post. To put it very frankly, you seem to blame a victim of rape for the rape event …

  11. Postkey

     /  September 20, 2015

    “It is said that Corbyn will cause Labour to collapse from within. That might very well be, but ask yourself why he was elected in the first place.”
    ” . . . and Corbyn speak I tell you – Hitler was also anti-establishment.”


    Dog whistle politics!

    No need to ‘worry’?

    He was ‘elected’ by a very small minority of the UK electorate and, unless there is widespread economic collapse, appears to have no chance of being elected?

  12. Daws

     /  September 24, 2015

    is it clear that we can defeat anti-immigrant positions with arguments?

    it seems more important to bring arguments for liberal reforms and monetary expansion before our centrist politicians while they still rule, so tat they can deliver comforts that pacify some of the aggrieved constituencies

    which r the easiest / most consequential reforms available to help advanced economies? in Latin Europe there r important labor market reforms to b made, but the pro-immigrant forces there r opposed to labor market reform. what can N. Europe do? housing deregulation seems to b the most wanted prize, but it seems unlikely

    I’m afraid we can consider interethnic, international animosity a sort of constant

    low minimum wages and work-dependent transfers seem crucial, but they will b fought tooth and nail by the forces sympathetic to the migrants. oof

  13. The intervening months only showed that the dangerous populist tendencies in US and Europe have intensified. Let’s hope that the democratic systems will be able to withstand this latest onslaught of the authoritarian populists.

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