Martin Wolf, writing in the Financial Times captured much of what has been going wrong in the western world. We don't expect that our elite leaders will get things exactly right, but we are in trouble when they get things terribly wrong. They got things terribly wrong in the first half of the 20th Century as Europe tore itself apart by mismanaging wars fed by grandiose concepts of empire. Today our elites are mismanaging peace instead of war. Wolf argues that our elites have made three major mistakes that are feeding right wing populism.
The first failure was the failure to understand the consequences of uncontrolled financial liberalization. Elites believed in the virtues of debt expansion which required governments to rescue the financial system. This was necessary but it was not popular. Those who benefited most from the mistakes that were made benefited most from the rescues made by taxpayers.
The second problem is globalization has weakened the notion of citizenship. Plutocracy is a necessary outcome of capitalism but it has become exaggerated today. The benefits of globalization go to a narrow elite and the distance between the elite and ordinary citizens has broken the bonds between the plutocrats and everyone else.
The third problem is most visible in the European Union. Elected leaders in the most distressed countries are accountable to their citizens but they are powerless to act. Power has been concentrated in creditor nations and in unelected technocrats in Brussels, Frankfort and the IMF who are not accountable to the citizens of the troubled countries.
The powerlessness that is experienced by many as a result of elite mismanagement has created a vacuum that can lead to unintended consequences in our political and social systems. Our elites have created a mess that will not be easy to rectify.