What Does a Leader Make?
Poor leaders make demagogues. Great leaders make lives worth living.
In the last few essays, for simplicity’s sake, I began to reimagine leadership with a simple theory. One of stark contrasts where leaders and demagogues are two poles of a spectrum, opposites — a dialectic: thesis and antithesis. In that tiny theory, the leader is the opposite of the demagogue, and so being a leader is simply not being a demagogue.
Let us now refine that theory a little, so it comes a step closer to truth. For the truth is that the relationship between leaders and demagogues is more intricately intertwined than a simple dialectic. It isn’t one of simple, neat opposition, but of interdependence, coevolution, and mutual feedback. In plain English: leaders and demagogues are like the river and the sea. One flows into the next. And so to be a leader, especially in an age of rage, you must understand much more than merely not being a demagogue. You must understand how not to make demagogues, how to fight demagogues, and how to undo the need for demagogues.
Let me explain.
Perhaps the best way to think of demagogues is as a form of leadership pollution. Demagogues can be likened to waste byproducts of poor leadership which may come, in time, to poison the body politic, should leaders pay them little heed, and thus allow them to grow. Hence, demagogues are not merely the opposite of leaders. They are a product of leaders—sometimes a product by omission, sometimes by comission. They occur when leaders fail at leadership. Thus, leaders may produce demagogues, and counterintuitively, demagogues, too, if leaders are wise enough to heed the warning that they represent, may produce better leaders.
Let us then explore this relationship and it’s intertwined causes and effects.
Demagogues arise when a class of losers emerges. I do not mean losers in the moral sense — nor am I judging them. If anything, I have great empathy for them. I mean losers in the socioeconomic sense. A class which grows more ever insecure, less stable, poorer.
The poverty that losers experience is rarely absolute — nor is it even relative: it is implicit. We cannot see it, and thus understand it, if all we are looking at is absolute or relative measures of poverty. To say that all Americans are still richer than Somalia tells us little about why demagogues are rising in America. To say that most Americans are still relatively rich, that they enjoy big-screen TVs and big-box stores, tells us littler still. The poverty that produces demagoguery, well understood, is subtler. It is often implicit poverty — poverty relative to people’s own expectations. When a people expect, for example, to grow richer at a certain rate, by a certain quantity, and find their expectations dashed and thwarted, then they begin to grow vulnerable to demagoguery.
Why? Because they begin to grow angry, anxious, and afraid. It is not so much the abyss that terrifies us as the plunge.
People grow vulnerable to demagogues when they become losers. That may sound like a trivial statement, so let us consider it carefully. We are used, still in the glow of the golden age of post modernity, to living in societies in which prosperity ascends ever upwards, effortlessly. In the post war era, that is the story of the advanced world — and many parts of the impoverished world, like Korea’s furious rise in fifty years from poor to rich nation.
In that golden age of post modern prosperity, the key defining feature was this. Everyone was a winner. There were no sure losers. To be sure, there was the odd loser here and there, the person who couldn’t make good, was struck ill, simply had bad luck. But there was on average no expectation that anyone had to lose: no good rational reason to believe that one’s life would be worse tomorrow than it was yesterday. The arc of prosperity stretched upwards, and seemed to be ever unbroken. Every new generation seemed poised to enjoy better living standards than its mothers and fathers.
When societies are booming, on average, everyone is a winner. Not necessarily in real terms — but in probablistic ones. You might not win the lottery — but you don’t have to get poorer. But when societies decline, things are very different. Suddenly, people become losers. They have to lose, and so there are sure losers. Someone must bear the brunt of decline, after all — just as it is unlikely that wealth will be distributed evenly, so too it is unlikely that decline will be. The people that must bear, by circumstance, by design, or by fate, the lion’s share of decline in a declining society I will more simply call losers. And so naturally societies in decline generate one key product that we, today, are not used to, unfamiliar with, which seems strange and alien to us, like beings from another planet: losers.
Let us understand what “losers” mean with more clarity. There are losers and winners in every society. And in capitalist societies, of which every advanced nation is at least some kind, there must ever be losers and winners. We are not speaking here of a loser in the colloquial sense, a person who has fallen through the cracks, or failed at success and belonging and happiness. We are speaking of a different class of “loser” entirely — an entire class of sure “losers”. A portion of society in which losing, decline, going backward, moving downward, reduction, diminution, becomes not the improbable exception — but the iron-clad rule.
What happens when the losing portion of society becomes the majority — not just the minority? When a majority of sure losers emerges, a society can said to be in decline.
To illustrate, let me put the above in more formal, and more easily understood terms, using the example of the USA. A few short decades ago, America shared a dream. It was a dream of middle class prosperity. That with enough hard work and dedication, every family might have the chance to steadily ascend into plenitude. It’s income, savings, and assets would grow — and thus it would be ever more stable, secure, and free.
Today, that dream is in tatters. No matter how hard the majority of people work, they will not realize security, stability, and freedom — because their financial, economic, and social positions are ever more precarious. Their incomes are stagnant, their savings are emptied, their assets are greatly diminished. The dream is an illusion.
The American middle class are the losers of meta modernity. While billions have been lifted out of absolute poverty in China and India, the unnecessary price has been the decimation of the American middle. They are the losers in the brave new economy of financial hypercapitalism — ruined by the triple forces of globalization, technologization, and financialization.
Now here is the catch.
They did not have to be.
Let me explore each of these forces to explain precisely why. Globalization restrained the wages of the American middle — by offshoring stable manufacturing industry to lower cost countries, notably China. Technologization reduced the demand for low-productivity workers: robots and algorithms could do many of their jobs more efficiently. Financialization shifted risk from institutions to people — for example, health savings accounts shift risk from healthcare providers to individuals — and as individuals bore more and more risk, financial market fluctuations hurt them more and more deeply, and more subtly, financial markets fluctuated more because a new universe of expanded financial products, made of everything from mortgages to student debt to human lives, became interdependent on one another, like a rickety house of cards. It was as if there was no way to escape the risks and costs of financialization except to move one’s accounts offshore — which is precisely what the ultra rich and corporations did, but the humble middle could not.
But none of these forces was inescapable.
There was no iron rule that said leaders could not make up for the wages the middle lost to globalization, the risk they suddenly bore from financialization, or the jobs they lost to technologization. How could they have rebalanced the scales against all three of these forces? Very easily.
With social subsidies — whether basic incomes, social insurance, or more generous unemployment benefits; with government investment, in new industries which created new jobs; with subsidized education, healthcare, and finance; with helicopter money from central banks to people; and that is just to name a small number of policy options that leaders could have opted for. Rescuing the middle class was something leaders could have accomplished, should they have chosen to. That globalization, financialization, and technologization destroyed the American middle class was a choice — not a necessity.
The ruin of the American middle class was a choice that its leaders made. And when they made that choice, American leaders failed to practice leadership. By failing to practice leadership, they created a class of losers that were soon burning with rage, anger, and fear.
Leadership, remember, is simply the maximization of human potential. But by decimating the middle class, a generation of leaders minimized human potential. They suffocated and diminished the human potential of millions of American.
That is not just a homily. Let me put in starkly concrete terms. The millions of Americans that went on to waiters, butlers, maids, chauffeurs, fast food cooks, hotel bellboys, could and should have accomplished more with their lives. They could and should have been tomorrow’s doctors, lawyers, teachers, surgeons, professors. They are not, today. And so society as a whole is impoverished.
That is what leadership failure means: to fail the fundamental eudaimonic task of leadership. It does not merely mean what we often think it does: failing to strike deals, reach compromises, bully, bluff, and so merely displease one’s constituents, voters, followers — but to fail to add to, benefit, improve, enhance, what is larger, truer, and greater: society, the moment, and the future.
The ruin of the American middle class was a choice, not a necessity. And it was this choice that undid their position as leaders.
Let us continue our story.
In 2015, at the precise moment in history when the American middle class reached an historic tipping point, from majority to minority, true demagoguery emerged. This was no miraculous coincidence. One produced the other: the fall of the middle class also ignited the rise of demagogues. And the fall of the middle class was in the first place the result not of inevitable economic, technological, or social forces — but a choice of leadership. Thus, it was leaders who produced demagogues.
Here is the lesson.
When a society’s middle class begins to implode — once it crosses the threshold from majority to minority — is when a society has reached the point of decline. And at that point, demagoguery is all but inevitable. There are few inescapable quantitive signals of the rise of demagogues, and this is perhaps the simplest, clearest, and loudest. The opposite is also true. For a once thriving middle class to suddenly decline — in the starkest of quantitative terms, from majority to minority — is a beacon that a society’s leaders are failing.
And though such a society’s intellectuals, scholars, and leaders themselves may write off the decline of the middle as mysterious, inexplicable, misfortune, bad luck, necessity, or blind destiny, they are not just almost invariably wrong — they are also blind to their own illogic.
Why? There are no good reasons, short of natural disaster, scarcity, or calamity, for a middle class to decline. Let us think about it for a moment. In an economy dependent on a single resource, like iron, or oil, or coal, a depression may ensue if that resource suddenly runs out. If an economy is struck by a truly great calamity, a historic earthquake or flood, for example, it will take a generation to rebuild what has been damaged, and rebuild the labor force. If a society is struck by fire, plague, or famine, then the economy will shrink, as both supply and demand wither.
Economist call such events exogenous shocks — they lie outside our control, and are the ambit of destiny. But in the absence of exogenous shocks, there is no good reason for a well managed post modern society to suddenly decline — indeed, the very opposite should be true. When a middle class begins to thrive, it should continue to grow, despite occasional setbacks, like recessions. For the very establishment of a middle class in the first place tells us that a society has reached modernity: it is probably democratic, constitutional, liberal, governed by law, free to create, innovate, and compete. Thus, the only good reason there is for middle class decline in the absence of exogenous shocks is mismanagement — or, in simpler terms, leadership failure.
There is not a single example in modernity of advanced nations’ middle classes mysteriously declining in the absence of exogenous shocks without profound and systemic leadership failure. More simply put: where you see a society in decline, and you do not see misfortune or calamity, you will also probably see leaders failing at leadership. The decline of middle classes in the absence of exogenous shocks tells us that leaders have produced a class of losers: a stratum of society, now perhaps the majority, which is born to lose. Who cannot, no matter how hard they work, how lucky they get, or how morally they behave, win. Losers not just because of poor life choices or unfortunate life events — but by design.
Let me discuss the design of societies for a moment to make the point clear. Not design as in deliberate engineering — but design as in emergent structure.
In a declining society, when a class of losers emerges, a once harmonious and broadly supported social structure — in both static and dynamic terms. In static terms, where once a society was composed of the wealthy, the prosperous, and the poor, now it begins to be composed of the ultra wealthy — for there are always those, clever, immoral, and deserving of scorn, who benefit from benefit from leadership failure—the poor, and the new poor. The ultra wealthy are richer than yesterday’s wealthy, for they have siphoned off the wealth of the former middle — it did not magically evaporate, after all — and the old poor are much the same, impoverished and bereft as yesterday. What is truly different then, in a society in decline, is the new poor.
It is not the old poor who respond most strongly to the call of the demagogue, but the new poor. For the simple reason that a society with a class of losers is different in dynamic terms, too. The new poor are downwardly mobile — moving down in a world they expected to effortlessly move up in, they are alarmed, shocked, and enraged. They are used to having someone to be above — but now they are the peers of those they once used to call servants. They are used to dreaming of the slim but real chance, should their day come, of moving from the class of the prosperous to the truly wealthy. But now the distance between the two has grown past the point of reason, and there is no way that they can see they might ever join the ultra wealthy, whom they soon come to bitterly resent.
Thus, the social structure of a society in decline is very different from one that is growing. A growing society’s structure is self-supporting: each class buttresses and reinforces the next, and the top, middle, and bottom live more or less in harmony. There are tensions, true — but they are not structurally threatening, they do not promise to bring the whole down.
But a declining society’s structure is self-destructive: each class seeks to ruin the other. Its tensions are structurally threatening. The imploded middle, who are now the new poor, because they cannot spend, save, or invest as they once used to, cannot create the virtuous cycle of growth— and so should the ultra wealthy wish to stay so, they must siphon off ever more wealth from the poor, impoverishing them further.
Thus, a society in decline is something like a house of cards — with a very few cards at the top, and many at the bottom. Though those at the top may feel secure, the truth is that they are not. The threat of upheaval is ever present, and the top will have to resort to ever more coercive means to keep society stable.
And that brings us full circle.
Here, then, is how demagoguery is born. The poor choices of leaders demolish middle classes — and reduce the people formerly known as the middle become the new poor. Reflecting their downward mobility, a class of ultra wealthy emerges — rich enough not just to buy fine mansions, but entire cities wholesale. The new poor, insecure, unstable, working harder only to get poorer, grow angry. An age of rage is born. And that rage is the spark that lights the fire of demagoguery.
The key task of every leader in an age of rage, then, is simply awareness of three fundamental lessons of history.
First, the relationship between leaders and demagogues is not a simple dialectic. Demagogues are not the opposite of leaders. Leaders produce demagogues, through omission or commission, by choices that fail to offer the people leadership. Which, instead of creating shared prosperity, produce instead widespread impoverishment. Thus: a leader must not just not be a demagogue, him or herself. He must not produce demagogues, by making the very same mistakes which failed to elevate people’s lives just yesterday.
Second, the rise of demagogues reflects real profound and widespread changes to the structure of a society. People are not just frustrated and angry because their passions have been unreasonably aroused. Rather, they are enraged because a class of losers has emerged. Thus: a leader must undo the need for demagogues. He cannot merely attempt to placate, appease, or tell people their lived experiences are not real — for that will only enrage them further. He must learn to lead people who are going backwards — not merely who stride confidently forwards. That means mastering the art of healing the wounds underneath people’s anger, with the salves of empathy, grace, forgiveness, and humility — not merely empty policy, plans, and directives, which do not speak to hurt and traumatized people.
Third, because a class of losers has emerged, the leaders’ job is radically different in an age of rage than in age of contentment. In an age of contentment, a leader competes with other leaders, by the means of incrementalism, policy, and reason. The battle is placid, civil, governed by rules, and predictable. Everyone is winning — and so the stakes for leaders are low. But in an age of rage, leaders must compete with demagogues — and they cannot do that with incrementalism, policy, and reason.
Fighting a demagogue is a different battle, fought on a different battlefield, with different weapons entirely. One which few leaders know how to fight — and fewer still understand how to win.
Umair
London
March 2016
