Elections, dear boy, elections

The world is voting again but the implications are rather harder to predict. 

Harold Macmillan is said to have replied, when asked what could knock a government off course: “Events, dear boy, events.” 

At present on the global stage, quite a few of those events involve ballot boxes. Elections have recently taken place across several potentially important countries, with the Americans going to the polls today for the midterms. Seen from a distance, the current raft of elections could resemble a great global political realignment. Seen close-up, it looks more like hundreds of millions of people becoming cross for quite different reasons. 

The current raft of elections started several months ago in Hungary when voters ended Viktor Orbán’s 16-year rule and handed Péter Magyar’s centre-right, pro-European Tisza party a commanding victory. This election was consequential beyond Budapest for a number of reasons, not least because Orbán’s departure removes one of the more persistent obstacles to a common European position on Russia and Ukraine. 

More recently in Brazil, Luiz Inácio Lula da Silva secured a fourth presidential term, defeating the Trump-aligned Flávio Bolsonaro after a close run-off. The markets, which had apparently made other arrangements, reacted badly. 

In Serbia, a student-led opposition movement led to the defeat of the ruling party of Aleksandar Vučić, another populist leader who had cultivated relations with Donald Trump. Israel has also voted. Likud remains the largest party, but Benjamin Netanyahu’s bloc has fallen short of a governing majority. And the UK, seemingly reluctant to miss out on the electoral ‘fun’, is entertaining its own rumours of an early contest, despite Andy Burnham insisting that one will not come “any time soon”. 

The big one is obviously the US midterms. Voters go to the polls to elect all 435 members of the House of Representatives, 35 senators and 36 governors. Control of both chambers of Congress is at stake, as is the practical freedom available to President Trump during the second half of his term. The result will shape the political constraints around tariffs, Ukraine, NATO, China and regulation, though not necessarily in predictable ways. 

The problem is that a Democratic victory in either or both chambers will not necessarily introduce an outbreak of tranquillity. Instead, it could give America two years of subpoenas, vetoes, investigations and government-by-executive-order. Constrained legislatively at home, Trump may become more dynamic and disruptive abroad, where presidents generally enjoy greater freedom of action. 

There is a precedent for domestic setback being followed by foreign-policy activism. After the Democrats took Congress in 2006, George W. Bush answered public rejection of the Iraq war with the troop “surge”, which the then Democratic majority challenged but could not stop. Trump, seeking to shape his legacy and potentially further encouraged by an embattled Benjamin Netanyahu, could follow a comparable instinct and press harder against Iran. 

What, then, is the direction of travel? The answer is nowhere really, leftwards in Brazil, towards the centre in Hungary, away from the incumbent in Serbia, another coalition puzzle in Israel and a US President constrained at home and unleashed abroad. What these elections really share is timing rather than ideology. They point in different political directions, while creating uncertainty at much the same time. 

Individual elections matter, but they remain stubbornly domestic. As the political scientist Cas Mudde has argued, elections remain national before they become regional or global and voters act primarily on domestic grievances, even when the consequences travel much further. 

History suggests that election clusters rarely settle the international order as neatly as commentators hope. They can accelerate a shift already under way, obstruct a government’s room for manoeuvre or replace one difficult negotiating partner with another. They seldom abolish geography, debt, demography or national interest. 

For business, the absence of a single ideological direction does not reduce political risk. Rather, it changes its form. The risk lies less in one global movement than in several national disruptions arriving at once. The danger is neither panic nor complacency, but false precision. The attractive fiction that one electoral forecast can be translated into one dependable policy outcome. A company may predict the result correctly and still misunderstand what follows from it. 

Which brings us to the practical point: prediction only gets you so far. Leaders need to know which parts of their strategy survive a change in tariffs, alliances or political fashion, and what they would actually do if the consensus forecast proved wrong. Some decisions can wait; others may need bringing forward. Above all, leaders need to explain uncertainty without sounding paralysed by it. “We do not know” is sometimes perfectly respectable, provided it is followed by evidence that somebody has thought about what happens next. 

So, should we worry about this round of elections? Yes, but selectively. As you would expect, the American midterms deserve particularly close attention because congressional control can alter the pace, scrutiny and credibility of US policy far beyond Washington. The task for business leaders and communicators is therefore to prepare for several plausible futures, identify what remains true in each of them and know which decisions can be delayed, accelerated or reversed.