What we are witnessing in Europe — and what may loom for the United States — is the exhaustion of the modern social order. Since the early 1800s, industrial societies rested on a marriage of economic growth and political stability. Economic progress improved people’s lives and anchored their loyalty to the state. Wars, depressions, revolutions and class conflicts interrupted the cycle. But over time, prosperity fostered stable democracies in the United States, Europe and parts of Asia. The present economic crisis might reverse this virtuous process. Slower economic expansion would feed political instability and vice versa. This would be a historic and ominous break from the past.
It’s this specter that hovers over the U.S. election and the entire developed world, though it need not come true. Modern economies — especially the United States’ — possess great recuperative powers. Democratic traditions are strong. Still, a reversal can’t be excluded, because most advanced countries face slower economic growth, even if (hardly certain) they successfully navigate the fallout of the global financial crisis. Semi-stagnant societies can’t meet all expectations for jobs, higher wages and government benefits. Political institutions then lose legitimacy. Europe could foretell this dismal spiral.