Elite Overproduction Meets Social Mood in Europe

One of the points I've made over the years is those responsible for setting government policy should understand social mood, or at least have a deep understanding of history and cycle theories to prepare for what happens when mood shifts. Instead of building robust international institutions, they built fragile institutions that could survive small corrections in mood as happened in the 1970s, but cannot survive a higher-order correction that lasts a generation.

Wolfgang Münchau explains it in the Financial Times:

The trouble with the EU is that its stability depends on the likes of Mr Salvini and Mr Trump never coming to power.

Socionomic theory, cycle theories, and history tells us not only do they come to power, they come to power every few generations. And they are not Lenin or Hitler or Stalin or Mussolini. They are not advocating a revolutionary change. Their policies are well within the mainstream of Western politics. They only look like outliers from recent history because of peak social mood and effective control over the Overton window.

The mainstream drifted too far and started treating mainstream opposition as extremists. As more and more mainstream ideas became "racist," "sexist," "xenophobic," as holding mainstream ideas made one a "Nazi," the Overton window excluded topics such as immigration restriction. However, eventually the labels wore off and the taboo broke. Once it breaks and people no longer think the ideas are racist, sexist or xenophobic, then they immediately come crashing back into mainstream debate. That's why many in the establishment are having a moral panic: many of the younger set, Gen X and Millennials, believed the rhetoric. They drank their own Kool-aid and really believe Nazis are taking over.

Another factor is what Turchin calls elite overproduction. During boom periods the society produces too many elites. Only one can be president, only nine can sit on the Supreme Court. When there are too many elites, there is elite competition for a limited number of power positions. Much of the -isms that have developed over the past 20 years are a form of elite exclusion. If you are a "racist" you are excluded from polite society, certainly any serious political office. You must become independent and anti-fragile to survive.

Elites also chose a "stupid" system. Exclusionary policies are likely to be stupid (such as how the aristocracy chose itself in prior centuries), but it can be functionally smart as a system. The people being excluded will be smart and capable of beating the current ruling elites. The system must work well enough such that the cost of throwing out the current elites (regime change) isn't worth the benefits (if any) for other players in the society: businesses, church, "the people."

Modern elites decided to exclude nationalists (aka people who love their own people most) in democratic systems. They favored foreigners/outsiders over their own citizens and made it a moral taboo to be self-interested. They imported foreigners en masse and they derive growing political support from foreigners and recent immigrants, creating a self-fulfilling split from a large portion of the people they govern.

This was destined to blow up as soon as social mood turned negative and it turned negative at least a decade ago, if not nearly two decades ago. There is no sign that mood has bottomed yet either. Recent years have seen a positive mood rally amid a primary trend of negative mood. Nationalists are far from their peak.

FT: Fearless Matteo Salvini’s threat to the EU establishment

What makes Mr Salvini’s threat to the EU’s established order so potent is his fearlessness. He is the first modern Italian politician without an emotional need to be among friends in Davos or Brussels. And while the more experienced EU leaders managed to ensnare the relatively inexperienced Mr Conte, the political reality is that Mr Salvini can pull the plug on the coalition at any time. He will probably wait until after next year’s European elections.

Remember that Italy is the country where the EU’s two crises come together — immigration and eurozone. A majority of Italians still support the EU, but Euroscepticism is rising. The EU will need to deliver solutions to both problems, not just paper over the cracks as it did last week.

The trouble with the EU is that its stability depends on the likes of Mr Salvini and Mr Trump never coming to power. It risks becoming the Weimar Republic of our times — a construction fit only for a temperate political climate.