Complacent insiders sow the seeds of their own demise


After 17 years, this will be my final column for this newspaper.

Instead of ruminating about the past and repeating what has been said before, I think this is a moment to bring a unifying perspective to the issues that informed my writing in the later years. This column never quite fitted into the categories of pro or anti-European discourse, left or right, pro or anti-government. I must have left some readers confused about whether I am a European federalist, a Eurosceptic, or a cynical contrarian.

I find these classifications useless. I think about Europe and other current issues as a power struggle between insiders and outsiders. European integration started off as an outside challenge to national political and corporate cartels. But the EU, too, has displayed some cartel-like behaviour, for example in the way it dealt with small countries during the financial crisis.

I find this insider-outsider classification more useful than, let us say, establishment versus anti-establishment, or liberalism versus populism. I do not believe that populism will endure. But the rules-based multilateral order is crumbling for reasons that have nothing to do with populism. Many traditional power centres of our democracies — centrist political parties, the mainstream media, some industries — are oligopolies under siege for a reason.

Oligopolies can be competitive, but they compete under rules set by themselves, rules that safeguard their interests. The car industry is a good example of an oligopoly that went to lawbreaking extremes when some used cheating devices to fool emissions testers.

Newspapers used to enjoy a dual oligopoly — over readers and advertisers — until the advent of search engines, social media and new online media entrepreneurs. Politics in western countries has been mostly a duopoly between a dominant centre-right and centre-left party, but these power structures have crumbled, each in their own ways.

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France was unique in that the challenge to the two-party oligopoly came from a centrist outsider when Emmanuel Macron won the presidential race in 2017. The 2018 Italian elections flushed up two populist parties, one on the left, one on the right. In Germany, the Greens are overtaking the Social Democrats as the nation’s second party. The US and UK electoral systems protected the two main parties. But there, the challenge happened inside them, with a new breed of politicians defeating the old party aristocracies.

It is not hard to see why oligopolies are crumbling. Digital technology and globalisation lowered entry barriers in business and politics. What is surprising is that the oligopolies are not putting up a more effective fight. Objectively, many of them were once well placed to see off the challengers.

Carmakers earned huge profits in the past 20 years. If they had invested in electric batteries, hydrogen power and artificial intelligence, there would have been no Tesla. If you had worked in the industry 10 years ago, you would have short-circuited your career if you had advocated diversification, let alone blown the whistle on those who fitted software-cheating devices.

Party funding laws protected established parties against outsiders. But the powers of crowdfunding were stronger. Remember the days when newspaper publishers talked about their industry as a licence to print money? Why did none of them even try to become a modern social media tycoon?

There is clearly a pattern here. Success within an oligopoly does not translate to a competitive market. The qualities needed to make it to the top of an oligopoly are very different from those needed for outside challengers.

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Brexit was perhaps the ultimate insider-outsider battle. That story had it all. A complacent, status quo-supporting campaign, with a top-down organisation, doubling down after every defeat. The second referendum campaign started the same day the first one was lost. They were the quintessential insiders, who were blinded by their own virtue and misjudged the politics.

Fanboys of the diesel car in Germany consoled themselves with the thought that electric cars have a higher carbon footprint. Political strategists persuaded themselves that elections are always won from the centre. These are cautionary tales of what happens when you tell yourself, your voters, your readers or your customers the same story too many times. And when you believe it yourself.

Success often begins with doubt, followed by the courage to explore a different narrative. This is what I was trying to do here, and will continue in the future. You know where to find me.

The author is director of www.eurointelligence.com



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