Martin Wolf on the US midterms: What’s the risk of political violence?

0:00This episode is brought to you by Hard Lessons, a Morgan Stanley podcast. Iconic investors like Stan Druckenmiller, John Gray, and Rick Reeder break down calls that worked. I knew that this stock would go up for at least two or three years and go up a lot. Ones that didn't. I quite frankly thought the company could have reversed course. They didn't. And what they learned in between. When you buy everything and it goes up, it doesn't train you to be a great investor. It's these hard lessons that make all the difference. Listen to Hard Lessons wherever you get your podcasts. Martin, it's been the fastest decline of any advanced industrial democracy in the history of the world.

0:38I think the key moment is going to be in 2028, and that will give us a lot of information on whether the United States is going to continue to slide towards autocracy or whether that's going to be the start of a difficult but hopeful period of real democratic reform. I'm Martin Wolf, chief economics commentator at the Financial Times. Americans head to the polls for the midterms on November the 3rd, and I'm worried. Worried about what the result will tell us about the future of democracy. Can the United States continue to be the leader of the free world? My family's history taught me what happens when democracy fails.

1:19My mother was a Dutch Jewish refugee who fled the Nazis in 1940. My father was Austrian, also a Jewish refugee, who fled to the safety of Britain in 1937. Which is why I'm talking to leading thinkers about what's at stake in these midterms. For Donald Trump, for American democracy, and for the rest of the world.

1:49My guest for this episode is Professor of International Affairs at the University of California, San Diego, author of a sump stack called Here Be Dragons, and an expert on civil wars, insurgencies, and political violence, Professor Barbara Walter. With Americans heading to the polls next week, I wanted to understand what makes some democracies vulnerable to political violence and whether any of those conditions apply to the United States today. Professor Walter, welcome to the show. It's a pleasure to be here, Martin. Earlier this year, you warned in a much-read Substack post that in America, political violence is here to stay.

2:38Let me start by challenging that premise. Is there any reason to think these midterms will be anything other than peaceful, given millions of Americans have already voted, apparently without incident? Well, I'm going to start this interview by agreeing with you because I actually think these the midterms next Tuesday will be relatively peaceful for for a couple of reasons. I think the conditions right now are not ripe for violence. And we can talk in a little bit about what those conditions are. I think the Democrats are likely to win relatively big, which will make shenanigans by Trump and his team more difficult.

3:22I think it was quite close and Trump was, in fact, able to change the outcome, meaning to keep a Republican dominated House and Senate, even if Democrats appeared to have huge turnout and victories in key states. If that were to happen, I do think Americans would probably go out and protest. I think there's a lot of energy here for a change in the White House, for a change in Congress. I think the Democrats and the left especially are very energized. And the right is kind of unhappy, so passive. And so I do think there would be protests under those conditions, but I don't see them being violent.

4:08I think it might be a different story in 2028, but geez, a lot is going to happen between now and 2028. And a lot of that is going to be hard to predict. Indeed. So let's look a bit, though, at the underlying conditions in the United States. When you look at America today, what do you recognize from the countries you've studied that might suggest political violence could become a significant issue? Between 2017 and 2021, I served on a task force run by the CIA called the Political Instability Task Force. And it's been around since 1994. But one of the main purposes of that task force was to come up with a model that would help the U.S.

4:55government predict what countries around the world were likely to experience political instability and or violence within the next two years. So in quite a short period of time. And when the agency developed this model, they brought in two types of people into the room. They brought in experts on conflict and instability and violence like myself, and they brought in data analysts. and the data analysts asked the experts to tell them every possible factor that could possibly put a country at risk of political violence. And the experts gave the analysts 38 different factors. Some of those factors seemed very commonsensical, like whether a country was poor, whether it had high levels of income inequality, whether there were lots of minority groups and groups that were heavily discriminated against.

5:48And it turns out only two factors are especially important. And they were not the two factors that the experts expected. It turns out the two factors that put countries at high risk of instability and violence are something that political scientists called anocracy. That is just a fancy term for a partial weak democracy. So it has elements of democracy. Elections are held, but it also has elements of autocracy. The same party tends to win every election. So Hungary was sort of your classic case of an anocracy. The second factor was whether these anocracies had political parties where citizens were essentially joining parties, not because of any ideological bent, but because of their race, religion, or ethnicity.

6:44So think about Yugoslavia in the early 1990s. This is a new, nascent, weak democracy, an inocracy. And what did Yugoslav start doing in the first election? They formed a Serb party, a Croat party, a Basian Muslim party. And that's how people voted, down strict ethnic lines. If a country has those two features, the task force considered it at high risk of political violence and or instability within the next two years. And we put it on something we call the watch list. And when I wrote that piece on Substack, where I said political violence in the United States is here to stay, I asked myself, OK, where are we on the inocracy scale?

7:30Where are we on this, you know, identity party scale? scale. And not only are we on this scale, but it's actually gotten worse, especially in the last two years, especially since Donald Trump came back into power. So it's clear to me that if the task force still existed, if the task force were allowed to study the United States, which it absolutely was not legally allowed to do, we would currently be on the watch list. And the expectation would be that there was going to be increasing political violence and instability here in the United States because those two conditions exist and they're not getting better.

8:08And this is actually consistent, isn't it, with some of the quite widely known data. The recent VDEM report shows an extraordinarily rapid decline in the United States, at least on the democracy versus anocracy scale. Martin, it's been the fastest decline of any advanced industrial democracy in the history of the world. The question I have, though, are you sort of reasonably convinced that the sort of model and modeling data analysis you talked about using U.S. data really works, given that most of the cases that you have got in your database are going to be extraordinarily different places, much poorer, much more fragile histories of democracy, much more recent histories of democracy.

9:08Can that really be applied to the United States, which has been a functioning republic for 250 years and a pretty functioning democracy for at least 100 of them? So the answer is yes. And it's not going to look exactly the same. So one of the things we learned from the model was that every year a country has these two features, the annual risk of political violence is about 0.4%, which is quite low. But again, if those features continue every year, that risk goes up over time. So after 10 years, it's much higher. After 20 years, it's even higher than that. So when I think about the United States, I'm thinking in terms of a decade or two decades.

9:57I don't think so much in terms of the next two years, but I'm much more confident that we're going to see more political violence over the next 20 years. And the reason for that is if you ask yourself, why is America's democracy declining today? Why are we suddenly having these deeply religious and racially based political parties. One of the biggest drivers of both of these factors in the United States is the huge demographic transformation that the United States is going through. And it's something that may be of interest to people in the UK because the U.S. is the first to go through this, but other advanced industrialized democracies are coming up behind us.

10:42And the big demographic change in the United States is that by around 2045, the United States is going to go from being a white majority country to a white minority country. And what we know from history and what we know from from all the other cases where ethnic, you know, ethnically based violence breaks out is the people who tend to start it are not the poorest people. They're not the people who are the most oppressed. The people who tend to turn to violence are the group or groups that had once been politically and economically dominant but are in decline. And the group that has been politically and economically dominant since the beginning of the United States have been white Christian men.

11:35And if you look at a whole host of measures, whether that's salaries or increases in salaries and employment and education and health outcomes. The group that is declining is white men. And the dominant group generally doesn't go down without a fight. So when I look into the future of the United States, I don't see this demographic change going away. And if the demographic change isn't going away, you're going to have angry white men. Do you think that has already explained in large degree the politics we're seeing, The transformation of the Republican Party as it's become a more southern party, the transformation from a basically upper middle class, pro-business, free market sort of party to the party of Donald Trump, which is very different.

12:28and the domination of Donald Trump himself, is all that a reflection of and a reaction against this profound demographic shift? And that, to you, is the core of what's been going on. Absolutely. You know, the studies that we have about violence all show that people who are losing power feel this deep, deep sense of grievance, this loss of status, this resentment at other people who seem to be doing better or who at least seem to be rising at a time where they're declining. And these once dominant groups are generally still quite powerful. So they often have access to the levers of power and they often can try to cement in their power while they still have it.

13:20And they'll try to do that. And if if you look at a whole series of things, the you know, the elimination of the Voting Rights Act, you know, voter suppression of of poor minority voters in the United States. If you look at cuts to education, to health care, to social services, these disproportionately hurt, you know, America's nonwhite population. If you look at the repeal of Roe versus Wade, if you look at the whole trad wife movement, this is all an attempt to to prevent the rise in the competition from from a whole segment of American society that that once was marginalized. So I think it explains a lot.

14:04And I'll make one more point. The Republican Party didn't used to be the party of whites. You know, in 20, you know, pre 2008, if you walk down the street in in the United States and you saw a white person, you'd have a 50 50 chance of guessing what party they belong to because the white working class voted Democrat and the white working class voted Democrat for very practical reasons. Democrats pursue policies, economic policies, social policies that tend to help the working class. But starting in around 2008 with the election of Barack Obama, the white working class started to gravitate towards the Republican Party and this message in their minds of hope and power and agency.

14:55and now 80 % of the Republican Party is white in a country that is multi-ethnic, multi-racial, multi-religious. And so that's a real change where you see a subset of the white population now voting for the Republican Party, even though the policies of the Republican Party hurt them. In my own analysis of this phenomenon, because when I wrote my book, The Christ of Democratic capitalism, I made the point, which is pretty obvious, that if you look to the social and economic structure of the antebellum South, most whites were poor. Most whites had few or no slaves. And yet they identified so strongly with the elite who were in the states that were dramatically more unequal than in the US as a whole because of the immense wealth and power of the planter classes.

15:57They fought for them and they died for them, as it were. The racial cleavage was so powerful. And so the suggestion I had, which I think is very significant, that was what the South sort of culturally and politically built itself on. After the Civil War, after Reconstruction, we had the so-called Jim Crow South. So is it fair to say that what you're describing is an attempt to make the Jim Crow system, I'm being very crude about it, which was Southern politics for almost a century, except 50, 60 years, the national policy. And that's what really the Republican Party today is about. Yes. And it's the parallels are just unbelievable.

16:47So to get back to the 11 Confederate states in 1860, the reason why landowners decided they had to declare independence, they had to secede from the Union, was because the election of Abraham Lincoln in 1860 was the very first election that a president could come to the White House without the support of the Confederate states. Prior to that, you couldn't gain the White House unless you had the support of the South, which meant the South could guarantee that they would have a pro-slavery president. Lincoln got into the White House on the strength of the Northern vote, And the northern vote was only going to get bigger because immigration was happening and immigration was disproportionately going to the north.

17:37So the southern landowners, white landowners, understood that from now on, they would not control the federal government. And the federal government would eventually get rid of slavery. And when slavery was gone, they were in trouble because at the time, South Carolina and Louisiana were majority black. The black population in the South was enormous. And if you had democracy in the South, real democracy, which which didn't exist until the 1960s, by the way, a one man, one one person, one vote in the South, whites would be disenfranchised in many places. And again, so what did landowners do? They convinced the white working class that keeping slavery was going to be good for them because if slaves were free, they were going to rape their wives and their daughters, that they were going to take their jobs, that their lives were threatened as a result.

18:37So they used fear. The same thing is happening now throughout the country. The demographics of the South were very close to equal and and blacks dominated in some in some states. Now you're starting to have whites become a minority in the rest of the country. And so you're seeing kind of the same dynamic of whites looking around going, shit, like we don't have the votes anymore to win elections. And if we don't have the votes to win elections and if Latinos are growing and non-whites are growing and they're disproportionately voting for the Democrats, then we have to do something to suppress that.

19:16So that's one way of thinking about how what was once the concern of the southern states and created a peculiar southern political structure after the Civil War is going more national. But it doesn't indicate necessarily that this uncontrollable violence is going to determine things tomorrow, as it were. And if we look back on the history of the United States during civil rights, there were lots of riots, bombings, violence, but it was actually contained and the American Republic went on. Why should it be different this time? Is it because American demography has got so much closer to being 50-50, as it were, across the country, that you're actually more pessimistic about prospects now than you would have been.

20:21And I remember this very, very well in the late 60s and 70s when American cities were burning. There was a lot of violence. So I'm more pessimistic now because in the 1960s, the White House was on the side of democracy. It was the White House that was enforcing the rights and freedoms of all Americans. We have the opposite today. You know, if you have a president in power who doesn't believe in democracy, who wants to intimidate citizens, who wants to suppress citizens, who wants to concentrate more and more power in his hands, he's going to respond to protests much differently. So again, these underlying conditions of weak democracy and identity parties can exist for a long period of time, and there's no violence.

21:15So that means something's got to trigger the violence. And two things tend to trigger it. One is elections, especially two consecutive elections, where the loser in the election feels that the outcome has been manipulated or stolen from them. You know, we've now had one election for sure where the MAGA base absolutely believes the Joe Biden stole the election. And Donald Trump is continuing that narrative saying that, you know, if the Republicans lose on Tuesday, the Democrats once again stole it. And that narrative is going to be used in 2028. And there's going to be a subset of the Republican Party that is going to feel that it's their duty as Americans, it's their right as Americans to rise up and prevent the outcome of an election that they lose to Democrats to prevent that from being implemented.

22:17So that's one of the triggers. And a second trigger is protests, but it's, you know, protests can be peaceful for long periods of time. But when violence tends to break out is usually when the government responds with harsh, disproportionate force. You know, nothing radicalizes citizens more than, you know, seeing the government attack innocent civilians. So when I think about the future, America is going to be facing a bunch of contentious elections. They will be losers in that election. The far right is likely to lose those elections. Many of them are mobilized. They were willing to fight on January 6th.

23:06I suspect they'll be willing to fight in different capacities in the future. But it could also go the other way. Let's say that Trump and the Republican Party is successful in creating a playing field that is so unlevel, that's so skewed in their favor, that Democrats just can't gain power anymore. They can't, even if they have the votes, they can't take their seats in Congress and govern as a majority. They'll win the popular vote, but they don't win the presidency. If this happens over time, then the left will eventually rise up because those who are excluded from politics, if they have no other means of affecting change, at least extremists within their ranks will eventually turn to violent means to try to affect change.

24:03Presumably, the underlying reality here before we start thinking about the near-term future is that in the US today, both sides regard the other side as essentially illegitimate. If you're in a situation in which one side regards the other as illegitimate, elections are, as it were, always fraught. They are structurally fraught. They can blow up, and indeed political life generally can blow up at any moment into something serious. So we are wrong to focus on what will happen in the next week or so, though that's important. The really important point to understand is that as long as this continues and you're suggesting it's bound to continue, politics in the United States just can't calm down because it's too existential for both sides.

25:00Am I getting this right? Absolutely. Absolutely. So this is a fight that both sides believe is absolutely worth fighting. And as long as this goes on, every election is in some sense a cliff edge moment, which could lead to really serious violence. Is that right? I don't know. I'm going to, because I'm generally an optimistic person, I'm going to say I think the United States is going to avoid major violence. And I think it's because the MAGA movement is already losing steam. Donald Trump is 80 years old, 82 years old, or he'll be 82 in two years. He's going to disappear from the scene, whether he likes it or not.

25:53And he's such a charismatic, powerful figure that I don't think there's going to be an easy substitute for him. And so I think the MAGA movement will slowly, slowly fade away. And the Republican Party and Republican leaders are going to realize this strategy that we've had to desperately hold on to and rile up a declining white male base is a losing strategy in a democracy. So if we're still a democracy, we've got to broaden our tent. And they will start shifting to more support for democracy. So I think the really dangerous group in the United States is the far right. They're the ones who have militias, have been talking about and training for violence.

26:45They've been quiet in the last two years because their man's in the White House and they're pretty happy about that. But once he's out, I don't think they're going to have an equal leader to make them passionate the way they are now. And I think the Republican Party is going to cut them loose pretty quickly. And again, if you have a White House and an FBI that's willing to monitor these groups and arrest their leaders if they do something illegal, then you can actually start to gain some control over them. And so I'm hopeful in that way. Where I am less hopeful is if the Republicans are actually successful in really weakening our democracy to the point where Democrats can no longer compete.

27:36Because if that happens, then more than half of the country will essentially have no voice in politics. And again, if half the country has no voice in politics and they're being ruled by a party whose policies are really, really hurtful to them, then they will eventually rise up. So in some respects, I think if America becomes an autocracy or an autocracy light, I think over time, the more likely uprising is going to be from the left. How close is the U.S. to tipping in the benign direction or the malign direction in the near future? Are we looking at a situation in which the sort of future of the U.S.

28:23will, in fact, be settled in a relatively short time? Or are we actually going to be seeing these questions and questionings continue? I think we're closer than people think. and by close, I mean within the next two years. And I base that on data. So we know that when a country moves from a democracy into this middle zone, this inocracy space, which is so unstable and tends to produce violence, they tend to stay there on average seven to 12 years. Now, the countries that stay there longer are democracies with winner-take-all majoritarian politics, which is what the United States has. So it suggests the United States could be in the middle zone for longer than that.

29:12What happens next is about 50 percent of them end up continuing to slide and eventually become autocracies. About 30 percent of them just kind of muddle along in this middle zone. Only about 20 percent return to full healthy democracy. So it is not easy to to reverse this and and to reform and to become the the healthy democracy you were before. It happens, but it's not easy. If it happens, it tends to happen in the first electoral cycle. And the first electoral cycle since the United States has been deeply in this anocracy zone will be in 2028. And and that first election tends to be very indicative of whether the executive branch is able to concentrate even more power, making the results of future elections less fair, or voters, there's a voter surge and you throw the bums out of power, which is what we recently seen in Serbia and in Hungary.

30:20And you could argue in Brazil where Bolsonaro Jr. was sort of kicked out as well. I think the key moment is going to be in 2028, and that will give us a lot of information on whether the United States is going to continue to slide towards autocracy or whether that's going to be the start of a difficult but hopeful period of real democratic reform. In February, you wrote a Substack post under the heading, they're losing America, so they're rigging the game. And you listed a whole series of signs to watch. How far are the things that you worried about materializing? And is your relative optimism about the election because they're not really materializing sufficiently?

31:05Oh, Martin, can you remind me and your viewers what those were? Well, federal changes to voting rules, post-election certification with partisan officials able to delay or refuse certification very much under discussion, election administration, replacement of officials with partisan hacks, rhetoric that preemptively delegitimizes defeat, an enormous ad spend on one side, which can shift. When I read those, it's what's happening. So my suggestion is that you are being more optimistic about 2026 midterms now than your own article suggests you should be. So the Republicans are using every single dirty trick in the book.

31:59Absolutely. I mean, Trump's already contesting Alaska and we haven't even had the election. The, you know, I think when I wrote that, I didn't, I really didn't expect the degree to which the Justice Department and the FBI would be weaponized and how Trump is using the Justice Department in every possible way, everything he's doing. Why I'm still hopeful is, gee whiz, the American voters seem to be with it, right? They have a sense that we have a president who's deeply corrupt, who's deeply harmful to the country. At the very least, they certainly see that gas prices are really high. They certainly see that inflation keeps going up.

32:42They certainly see that their life is not getting any better. And they are angry and they're motivated. So the big uncertainty when I wrote that was, OK, but how are American voters going to react? And we have more information today on voters. Early voting is already happening here in the United States. The numbers are quite are are quite high. So we're having high turnout in midterm elections that usually have low turnout. The left is energized and independents are energized and independents likely will determine the outcome. And the right just seems to be less eager to vote. So we suspect a lot of Republicans are going to stay home.

33:29And that's what's going to lead to this, or we hope will lead to this overwhelming victory. And Trump can do all those things I listed, and it will be very, very hard to overturn an overwhelming victory. So basically what you're saying, one way of putting it is they're doing everything they can to rig it, but they are being so extraordinarily incompetent that they've lost the voters on a scale, which means they're quite likely to lose anyway. That is certainly a very cheering sort of view. So let's assume that happens. There's a decisive result. It's accepted because it's essentially overwhelming.

34:15There's nothing they can really do about it. Very much what we saw in Serbia very recently, in Hungary earlier this year, assume that that is accepted without mass violence because it is overwhelming. Does that mean that we could be out of the woods? Or is there still going to be a huge problem, at least in 2028, and a possibility that we will be back with this sort of worry again? I think winning on Tuesday is going to be the easy part for Democrats. That's going to be the easiest part for them. Governing in the next two years is going to be much harder. And that's because Trump is not going to back down.

35:03Trump is going to use his veto. He's going to use every executive power he has. And he is going to try to continue to pursue his agenda and certainly block anything the Democrats are going to want to do. So on the one hand, I think the Tuesday election will set up what could be a potentially huge battle between Congress and the executive branch. Congress is the main check on presidential power in the United States. The Congress we've had for the last two years, the Republican dominated Congress, has chosen not to exercise its power and essentially has given it to the executive branch, which is why we've seen Trump run roughshod over so many things.

35:52But, you know, the Democrats, if they control the House and even better, if they control the Senate, will have real power. Now, they're going to be up against a formidable, cagey, crafty, creative, aggressive president. So they they're going to have to take the gloves off and and be willing to to fight and wield their power. But if they do that, they they certainly could stop Trump. They certainly could start to push through some of their own agenda and they could start to set themselves up for a potential victory in 2028. If they don't, if they are either unwilling or unable to wield their power and Trump is able to stop, you know, everything that they try, then I think this is going to play poorly with the American public.

36:44And the American public will say, here we are once again. The Democrats are weak. And I think that could potentially set America up for a Republican victory in 2028. So so I am already looking beyond Tuesday. I'm looking at the next two years and I'm looking very, very carefully at what the Democrats in Congress are going to be willing to do. And they they better be willing to fight. Thank you, Barbara Walter, for speaking to me. It's been very enjoyable. My pleasure.

37:26Some travelers want the charm of an independent hotel. Others want the confidence of a trusted global brand. With Series by Marriott, you get both. Each property is uniquely connected to its destination, delivering local experiences and memorable stays, while being backed by the quality, reliability, and Marriott Bonvoy benefits travelers know and trust. Experience the destination without the compromise. Series by Marriott is part of Marriott Bonvoy. Book direct at Marriott.com or on the Marriott Bonvoy app. You save. You invest. You keep an eye on spending. So why do your finances still feel so complicated?

38:04Quicken helps you put the whole picture together and make sense of what to do next. Connect accounts from more than 14 ,000 financial institutions and see how all the different pieces of your financial life fit together. With Quicken, you can make sense of your options and decide what to do next. Quicken. Know what to do next. See how at Quicken.com.