This interview was conducted by Victoria Watts and originally published in the Department magazine .inspired No. 12 in German.

In a fast-moving world time for reflection and contextualization is scarce. However, to understand social phenomena fully, you need to place them into cultural and historical perspective. Joachim Voth does this by using economic tools, and has refuted a number of established theses in the process. We talked to the expert in economic and financial history about the rise of populist movements such as the NSDAP, about democracy, elite criticism and the value of economic methods in the social sciences.

How do economists explain radical social movements?

Radicalization is, first and foremost, irrationality. Therefore, it is valid to ask if irrational behavior can be studied using methods designed for rational everyday problems, such as purchasing decisions. There is a very broad movement within the field of economics that has shown that the economic methods we have developed to understand markets can be applied to almost everything, even if the left side of the equation has a noneconomic outcome. Even political decisions or the success of radical social movements can be modeled by costs, benefits, constraints and limited rationality.

What are the factors that facilitate the rise of radical populist movements?

A few years ago, I conducted a study on anti-Semitism in the Middle Ages with a former doctoral student. Germany experienced a plague outbreak back in the 14th century. A false, but not implausible thesis was circulating at the time, claiming that the Jews had poisoned the wells in order to exterminate the Christians. Although physicians and even the pope declared the explanation to be incorrect and untrue, the idea persisted in some cities. Massive pogroms were the result. Our data shows that six centuries later, in these very same cities, during the interwar years, the NSDAP was more likely to be elected, more Jews were deported and more synagogues were destroyed during the Reichskristallnacht in 1938.

So the origin of anti-Semitism lies in historical anti-Semitism?

In part, yes. There are other factors too. Most cities in our study were rather small and there was little mobility. The majority of the people who lived there were direct descendants of people who had already lived there in the Middle Ages. We know a lot about the transmission of beliefs and values; children of risk-averse parents are often very cautious themselves. Another finding points towards the transmission of attitudes from parents to children: in places that experienced a lot of immigration during industrialization era, a kind of dilution of ideas and values took place. The misconception from the Middle Ages lost its predictive power for the behavior of people between 1920 and 1939.

What about the idea that industrialization led to a loss of social communities and thus facilitated radicalization?

This example illustrates the value of economic methods for understanding ideas within social sciences and humanities. There is this famous thesis by the philosopher Hannah Arendt, who explains the development of radicalization through the loss of small-scale and tight-knit communities. In a village, where everyone knows everyone, she argues, radical movements do not arise. However, when people are uprooted as a result of industrialization and move to cities where they have to live under precarious conditions and without social ties, they become susceptible to incitement by demagogues. Other theses regarding the importance of social connections for democracy draw similar conclusions. Alexis de Tocqueville and Robert Putnam describe associations and clubs as important places for the development of social capital. This is where trust, cooperation and democracy is practiced on a small scale, they argue.

Both theses seem to explain the observed facts well. However, when you look at the data, it tells a completely different story. During the Weimar Republic, there were many associations and strong social cohesion in many cities and communities. We studied this and found that in towns and communities where there were more clubs, membership in the NSDAP spread faster than elsewhere – regardless of whether you only look at nonpolitical clubs such as small animal breeders, chess clubs and hiking clubs or also take political associations into account. Radical movements spread like a virus in these social networks.

So club memberships and social capital do not protect against the disintegration of democracy. The opposite is true. Associations facilitate cooperation. That can go in a good direction, then everyone donates blood and helps each other, or it can backfire and people organize the mafia or join radical movements. The hypothesis of the industrial mass societies is wrong – it was not the rootless proletarians in overcrowded industrial cities who flocked to the NSDAP, but the well-integrated petty bourgeoisie who went to their club’s regulars’ table every week.

Why are populist movements currently experiencing an upswing?

The resurgence of populism over the last ten years has a lot to do with the financial crisis. Populism is always elite criticism. There is this pitting of the good people who should be ruling, against the supposedly corrupt elites who do everything wrong and generate crises. “The elite” is this culturally different group, a very small minority that lives a very different life from the rest of the population and has enormous influence. We hear the same rhetoric as we did the 20s of the last century. The globalized elites who grow up in one country, go to school in the next, go to university in the third, marry someone in the fourth, while working here and there, in a way cause the same unease as the Jews did back then.

Isn’t elite criticism basically healthy for a democracy?

I don’t know. In recent decades, we have fallen victim to a fundamental misunderstanding of the concept of democracy. Most states do not practice democracy in its pure form, which we know from the Athenic experience can degenerate quickly. Rather, they are parliamentary democracies – quite a different animal. There are central areas within the public administration and government of developed countries, e.g., central banks, monetary policy, the judicial system, where politicians and civil servants make decisions without the public having any say. Parliamentary democracy is not reflect people’s wishes in a delegated form of continuous voting, but to organize a rational discourse, allowing the best solutions to emerge. This works well as long as the solutions actually work, and the values and opinions of the voters are taken into account.

During the financial crisis and on the issue of immigration, an increasing split between the political positions of the parliament, or elite, and the people became apparent. In particular, the issue of immigration was consciously kept out of public discourse in many countries for a long time. Anyone who expressed doubts about the sense and benefits of large, uncontrolled, often illegal migratory movements was quickly portrayed as a racist. Suppressing this discourse paved the way for parties with programs that are focused on these issues, but then go on to sell a much wider agenda. Thus, we end up seeing a rise of the Lega in Italy, Vox in Spain and the AfD in Germany.

How do you prevent populists from coming to power?

First and foremost we need to remember that things can go very wrong, very quickly. In 1928, the Nazi Party just received 2.6% of the vote. Five years later Hitler was chancellor. Even if such a cataclysmic event seems unlikely today – a political system can lose its legitimacy very quickly. An enlightened form of parliamentary democracy is needed: politics should not deviate too far from the preferences of the population, otherwise it paves the way for a populist backlash.

Or more direct democracy on the Swiss model?

The Swiss model is sound. It has an automatic disciplinary mechanism, if the political direction goes against the grain for too many people, they will call for a referendum. However, you can’t just export the Swiss model. Successful direct democracy is an art, a matter of practice and size. Referendums did not work in the Weimar Republic, they became a platform for radical forces. If you repeatedly practice direct democracy in a small context over a long period, people learn that their decisions have consequences. If you go out and ask an inexperienced group to vote on a major question, e.g., Brexit, it can backfire very quickly. In my opinion, the Swiss model explains why the level of economic discourse in Switzerland is so high. Sometimes I have the impression that Swiss taxi drivers have a better understanding of economics and the necessities of good housekeeping than do some academics in other countries.

What factors strengthen the democratic system?

In many cases smaller units and smaller countries are better able to deal with the political and social challenges, not least because they are more homogeneous. I would like to see the meta-organization EU shift the majority of national competencies downwards to lower levels. There is no reason why Thuringians and Bavarians, Milanese and Romans, or Galicians and Catalans should have to agree on so many policy issues. Regions simply have different preferences and interests.

The economies of scale of larger administrative units are often exaggerated. People believe that countries must not be too small, or public administration becomes too expensive. However, this is obviously wrong. With 26 cantons, Switzerland operates a very small-scale administration, while providing well-functioning public services at a low cost. Of course, there are political decisions that need be taken at a pan-European level: Internal market, trading area, monetary policy, etc. However, below those, one can and should push for decision-making at very low levels of aggregation.