In this paper, we claim that Downs’s theory of democracy provides a framework to build an economic and positive theory of populism. Our purpose in this paper is threefold. First, we highlight systematically overlooked aspects of Downs’s work. In particular, we demonstrate that Downs is a thinker of political polarization and that his focus on uncertainty is relevant to build an economic theory of populism. Second, we take the issue of populism as an opportunity to test the explanatory power of Downs’s political economy. Third, our reconstruction of Downs’s political economy enables a comparative analysis with the theoretical political science literature on populism to achieve a wide reflexive equilibrium on the understanding of both the nature and the causes of populism. In accordance with such a method, we conclude that populism is, in essence, a political force in a democracy, always present in a latent state, and rationally promoted by political platforms when the minimum consensus required for democratic stability is in crisis. That is why populism is likely to regenerate as much as to sound the death knell of a democratic political system.