The West: Between Incompetence and Folly
When explaining the success of the Chinese economy and its state capitalism, many authors emphasize cultural factors. Confucianism, with its stress on education and traditional selection of officials through competitive examinations, has facilitated the modern adoption of meritocratic mechanisms. Some even view these mechanisms as an alternative to democracy. Competition within the Chinese Communist Party thus promotes state efficiency, further supported by the Taoist-rooted pragmatism famously expressed by Deng Xiaoping’s indifference toward a cat’s color, as long as it catches mice.
In much of the West, selecting political leaders faces greater challenges, particularly in countries like Spain, where citizens prefer choosing leaders based on ideological affinity rather than competence. The predictable outcome is leaders who are subservient to voters and obedient to privileged groups, as revealed by policies favoring pensioners and public servants. Instead of true leaders, we elect continuity managers. It makes sense that their selection follows insular, non-meritocratic processes. Their role is not to lead but rather to distribute rents and preserve the status quo, making minimal adjustments at most to keep it intact.
When the status quo enters a crisis or falls into a vicious cycle, these continuity managers prove incapable of responding effectively. This is evident today in immigration, housing, education, and defense, where grand gestures abound but actions remain minimal, inexpensive, or delayed.
As problems persist, leaders and parties from outside the establishment emerge. Some originate from political fringes, while many others come from the business world (like Berlusconi, Ruiz Mateos, Gil, or Conde) or intellectual circles (Ciudadanos, Podemos, Miley). When outsiders enter politics, they suffer from the old "Peter Principle": success in another field sends a positive signal but does not guarantee electoral success or competent public management.
Donald Trump and Elon Musk clearly illustrate this phenomenon.
Trump’s business and media experience shape his negotiating, decision-making, and communication style. Applying business methods to governance is always challenging, especially when derived from specific sectors. Trump’s negotiation style reflects his real estate background, characterized by one-off transactions with little reliance on reputation. Consequently, he handles commercial and strategic partners with a very short-term perspective. He undervalues national reputation, treating international relationships like isolated deals. Trump is not alone; many American politicians, starting with Vice President Vance, whose background is in finance, also exhibit symptoms of this short-sightedness.
Trump’s decisions also reflect his television background. Since his first term, he has brought his media savvy to international politics with spectacular summits and grand gestures. His 2018 meeting with Kim Jong-un in Singapore projected a bold image but yielded no verifiable results in denuclearization and caused significant tensions among traditional allies. Something similar may now happen with his handling of Russia’s invasion of Ukraine. Treating international politics like a reality show can be costly: alliances weaken, and adversaries gain time without making real concessions.
If Trump is a business celebrity turned politician, Musk is a celebrity turned public manager, now leading the Department of Government Efficiency (DOGE), tasked with cutting and restructuring the federal administration. His credentials derive not only from his innovative entrepreneurship but also his radical cost-cutting abilities. For instance, after acquiring Twitter, he laid off 80 percent of the staff, renegotiated many contracts, and eliminated entire departments, yet the company continued to grow.
However, public administration is vastly more complex than private enterprise. It comprises thousands of organizations providing diverse services, each requiring specialized knowledge for management. Musk is unaccustomed to these complexities. His approach of "cutting deep" first and repairing later, if at all, is unsuitable for long-term professional careers, where damage is often irreversible or takes decades to repair.
Musk and his team lack full knowledge of what they are cutting since specialized knowledge resides within each department. They suffer severe informational asymmetry. Bureaucrats typically exploit such informational advantages strategically, as seen in the selective reporting about USAID budget cuts. Thus, it makes sense that the ministries themselves should handle the cuts while remaining in tension with DOGE; however, it remains unclear if Musk will accept this indirect role and whether ministerial leaders can demonstrate competence. The recent security fiasco involving the attack on Yemeni militias raises alarm. Furthermore, Musk’s entrepreneurial incentives were aligned with outcomes affecting his own finances. The new Musk fails to appreciate that public management requires additional checks and balances provided by the rule of law, hence his tirades against judges scrutinizing his decisions. Lastly, the impact of public spending cuts—critical for Trump’s deficit-reduction goal—is minimal. Many canceled contracts had already ended or had minimal budgets, while major expenditures on pensions and healthcare remain nearly untouched and possibly untouchable.
It is natural that both Trump and Musk excessively rely on their favorite tools, even though these tools are now inappropriate. Nevertheless, the Trumpian shakeup could end positively under two conditions. First, facing potential defeat in the November 2026 elections, Trumpism needs to better channel the energy of its initiatives. Second, traditional parties must recognize their new role and set a new course. Some countries, like Denmark with its immigration policy, or Germany and the United Kingdom with plans to fund increased defense spending through cuts, are already starting this shift. In contrast, other governments, like Spain’s, continue relying on accounting and semantic tricks.
Notably, old and new leaders face a similar underlying issue stemming from their self-selection. Conventional politicians excel at managing continuity but not change. New politicians have proven effective in business, but their political competence remains uncertain. Success for both depends on overcoming their limitations. Crucially, traditional parties, as managers of an exhausted model, must learn to lead its transformation. If they fail, they risk disappearing, leading to uncertain and potentially dangerous outcomes.
English version prepared with ChatGPT-4.0