If the experience of the Great Depression is anything to go by, economic crises help the far right rather than the far left. In a recent paper, Alan de Bromhead, Barry Eichengreen and Kevin O’Rourke find that
the Depression was good for fascists. It was especially good for fascists (based on the interaction effects between the period dummy and country characteristics) in countries that had not enjoyed democracy before 1914; where fascist parties already had a parliamentary base; and in countries on the losing side in World War 1.
the Depression was of no great help to Communist parties on average. In addition, the Communist vote was higher in countries without a pre-war democratic tradition and in countries that had been defeated in World War I.
Using a different model, the authors find a significant relationship between economic growth over time and support for fascism.
while growth had a large impact on voting for right-wing extremist parties in countries which had not been democratic prior to World War I, a history of prewar democracy almost completely eliminates this effect. (That is to say, the interaction term between growth and prewar democracy is positive, almost as large as the coefficient measuring the direct impact of growth, and strongly significant.) … in countries without a prewar history of democracy and with a pre-existing fascist party, a one standard deviation increase in growth is associated with a decline in the extreme right-wing vote share of 4.8%. In such countries, a decline in growth on the order of that experienced by Germany between 1928 and 1932 is associated with an increase in the fascist vote share of 12.9%. In countries that had not been democratic prior to 1914, a one standard deviation rise in growth is associated with a 61% decline in the probability of observing a positive fascist vote. These are large effects.
The currently available version of this paper was written in February 2012. Nonetheless, its findings have implications for current debates about austerity politics in the European Union, (in which both O’Rourke and Eichengreen have participated). The authors conclude:
Our analysis thus suggests that the danger of political polarization and extremism is greater in some national circumstances than others. It is greatest in countries with relatively recent histories of democracy, with existing right-wing extremist parties, and with electoral systems that create low hurdles to parliamentary representation of new parties. Above all, it is greatest where depressed economic conditions are allowed to persist.
Their argument anticipates more recent events, and in particular the rapid ascension of the neo-Fascist ‘Golden Dawn’ party in Greece. If they are correct, the austerity measures that the Greek government is implementing are likely to lead to increased support for fascism in Greece.