Ajit Ranade: What Mamdani’s rise in New York tells us about welfarism versus populism

Cuomo has name recognition. He represents a powerful political dynasty, is a well-funded establishment figure and was backed by national heavyweights and endorsed by  labour unions. Mamdani is a relatively unknown democrat socialist with a left-wing vision for the city, focused on issues of affordability, fairness and redistribution. 

If elected, he would be New York City’s first Indian-American mayor and also the first Muslim to hold that office. His win made news in the US as a major upset that has overturned expectations and perhaps signalled an ideological shift. Mamdani was careful to assert that if elected, he would duly represent all New Yorkers.

Also Read: How Zohran Mamdani beat Andrew Cuomo

Clearly, Mamdani’s campaign promises and messaging have touched a chord with voters. The election had a record turnout. His main theme was affordability, directly addressing the issue of inflation. On average, New Yorkers spend about 12% of their household budget on food. These costs have gone up by 50% in the past decade in the city, outpacing general inflation. 

Mamdani has promised city-owned grocery stores in each borough to tackle food security and keep prices low. This may sound familiar to Indian readers accustomed to fair price ration shops and state-run Amma kitchens. Mamdani also promised fare-free buses across the city and a freeze on subway fares. This is to make mobility more affordable. 

He has promised a rent freeze on stabilized apartment units, plus strong tenant protection and the construction of 200,000 new affordable homes. Rent stabilization, as practised in New York, is a regulatory cap on annual rent hikes. It is not outright rent control, but an attempt to mediate between profit-maximizing landlords and tenant rights. It aims to preserve affordable housing and also protect tenants from displacement. 

Those who squat on prized apartments in heritage precincts are not necessarily from lower income brackets. So New York’s rent stabilization policy needs periodic review and tweaks to address abuse and goal drift. An affordable housing shortage afflicts all major cities and New York is no exception. 

Also Read: Welfare schemes have reshaped the retail prices that matter to people

Mamdani has promised universal childcare for children aged six weeks to five years. Lack of affordable quality childcare is one of the major factors behind families moving out of the city. Recall the priorities of Shinzo Abe, Japan’s longest serving prime minister. Between 2013 and 2020, Japan added nearly half a million licensed childcare slots, especially in Tokyo’s suburbs. 

This involved funding and subsidizing privately-run or local government-run childcare centres. As a result, female participation in the labour force jumped to a rate of 70%, surpassing even the US. As observed, reliable  creches being out of reach had been leading Japanese women to drop out of work after their first pregnancy, often never to return. Creche support was a big component of ‘Abenomics.’ It was neither anti-free market, nor purely socialist central planning. 

Also Read: Welfarism: We’re not just beneficiaries but citizens and voters too

Mamdani’s focus on affordable food and housing, quality creches and cheap transport can be seen as welfarist and not populist. There’s a crucial difference between the two. 

For instance, a welfarist frame would have the state intervene to make rent stabilization deeper and public housing available, but a populist frame in the city’s context would project real estate developers as villains and define affordable housing as a right. 

Welfarism recognizes the need for intervention to remedy an externality. It uses economic tools like taxes and subsidies or other regulatory controls to nudge market behaviour and reduce its adverse effects. 

Populism, on the other hand, is often clothed in the language of rhetoric and slogans, but uses public outrage and incites confrontation. It often pits one class against the other, or the public against elites, thus  endangering social harmony.

In contrast, the discourse of welfarism uses concepts of fairness, inclusiveness, rights and universality. It is based on economic logic and recognizes the costs and benefits of a middle path between the free market and state control. In political and policy practice, however, welfarist and populist elements tend to get mixed up and it is not always possible to disentangle them.

Also Read: Indian welfare: Beneficiaries and benefactors must overlap more

Mamdani’s emphasis on public expenditure to fix perceived externalities will need to be funded. New York city’s budget is about $150 billion, but will need additional tax revenues, which he expects to raise by taxing the super-rich. He also wants to raise the top corporate tax rate. These tax policy changes may need the approval of the state’s governor and possibly the federal government under President Donald Trump. This looks like an uphill battle and can’t be won without some dialogue and compromise. 

Although some right-wing folks seem shocked at the prospect of a Mamdani mayorship, many concede that issues of  inequality and affordability need to be addressed. By focusing on the concerns of low and middle income households, the city can become a magnet for talent and investments. Economic dynamism in a densely populated urban agglomeration usually exhibits positive externalities and network effects. Mamdani’s welfarism might just be the shot in the arm that New York City needs. 

The author is senior fellow with Pune International Centre.