Failing elites threaten our future
Leaders richly rewarded for mediocrity cannot be relied upon when things go wrong
In 2014, Europeans commemorate the 100th anniversary of the start of the first World War. This calamity launched three decades of savagery and stupidity, destroying most of what was good in the European civilisation of the beginning of the 20th century. In the end, as Churchill foretold in June 1940, “the New World, with all its power and might”, had to step “forth to the rescue and the liberation of the old”.
The failures of Europe’s political, economic and intellectual elites created the disaster that befell their peoples between 1914 and 1945. Their ignorance and prejudices allowed catastrophe: false ideas and bad values were at work. These included the atavistic belief, not just that empires were magnificent and profitable, but that war was glorious and controllable. It was as if a will to collective suicide seized the leaders of great nations.
Complex societies rely on their elites to get things, if not right, at least not grotesquely wrong. When elites fail, the political order is likely to collapse, as happened to the defeated powers after first World War. The Russian, German and Austrian empires vanished, bequeathing weak successors succeeded by despotism. The war also destroyed the foundations of the 19th century economy: free trade and the gold standard. Attempts to restore it produced more elite failures, this time of Americans as much as Europeans. The Great Depression did much to create the conditions for the second World War. The cold war, a conflict of democracies with a dictatorship sired by the first World War, followed.
The dire results of elite failures are not surprising. An implicit deal exists between elites and the people: the former obtain the privileges and perquisites of power and property; the latter, in return, obtain security and, in modern times, a measure of prosperity. If elites fail, they risk being replaced. The replacement of failed economic, bureaucratic and intellectual elites is always fraught. But, in a democracy, replacement of political elites at least is swift and clean. In a despotism, it will usually be slow and almost always bloody.
This remains true today. If one looks for direct lessons from the first World War for our world, we see them in the Middle East, on the borders of India and Pakistan and in the vexed relationships between a rising China and its neighbours. The possibilities of lethal miscalculation exist in all these cases, though the ideologies of militarism and imperialism are, happily, far less prevalent than a century ago. Today, powerful states accept the idea that peace is more conducive to prosperity than the illusory spoils of war.
Yet this does not, alas, mean the West is immune to elite failures. On the contrary, it is living with them. But its failures are of mismanaged peace, not war.
Here are three visible failures.
First, the economic, financial, intellectual and political elites mostly misunderstood the consequences of headlong financial liberalisation. Lulled by fantasies of self-stabilising financial markets, they not only permitted but encouraged a huge and, for the financial sector, profitable bet on the expansion of debt.