Beyond left versus right, beyond elites versus populists

The two outstanding features of our age are the globalization of problems and the localization of identities. Climate change, biodiversity loss, financial crises, geopolitical conflict, cyberterrorism, bioterrorism, and pandemics are all increasingly threatening global problems. Meanwhile, identity politics is sweeping the globe, dividing people’s affiliations ever more stringently to conflicting national, cultural, and religious categories.

International cooperation is required to address our globally shared problems, but such cooperation is sabotaged by our rising drawbridges of identity. We are stuck in a trap of our own making. Around the world, there is a sense of sliding towards an abyss.

The traditional, postwar debate between left- and right-wing politics rested heavily on the issue of free markets versus state intervention. The left-wing group argued that capitalism creates inequality and thus requires government intervention to regulate markets and ensure fair wealth distribution. The right-wing group emphasized the material gains from private enterprise in free markets. These positions had clear implications for foreign policy, with the traditional left wing supporting globalism, multilateral organizations, and human rights, and the traditional right wing emphasizing national sovereignty and protectionist trade policies.

Though this left-right divide remains influential, the debate has morphed into a vicious battle between populists versus the “elite” in many countries over the past decade and a half. In this context, “populism” may be understood as a worldview that divides society into “the pure people” and “the corrupt elite.” Populists claim to represent the unified will of the people against the elite, positioning themselves as the true voice of the populace. The “elite” is the group often seen as holding concentrated power in economic and political spheres and ostensibly making decisions in the public interest. This elite is a small, select group of individuals who occupy leadership roles in key institutions such as government, corporations, media, and the military, and who are perceived to wield disproportionate influence over public policy and economic decisions.

Both the populists and the elite are focused on the shortcomings of the other. The elites often look down on the financial, social, and cultural backwardness of the common people, who resent the elites‘ rootlessness and their exercise of unaccountable power. But both sides have major strengths deserving of policy attention. This article articulates a new vision, drawing on these strengths and aiming to point towards a politics that lies beyond left versus right and beyond elites versus populists. I will argue that (1) the left-right debate focused too narrowly on material gain—the size and distribution of the proverbial “economic pie”—and too little on social issues and (2) the elite-populist debate concentrates too much on identity to the detriment of a healthy balance between social, economic, and environmental prerequisites. I will outline a political vision that pursues such a balance, resting on a balanced relationship between markets, state, and society. This vision points to a possible way out of the unforgiving cycle of recriminations that has dominated much of the left-right and elite-populist controversies.

My point of departure is the hypothesis that collective challenges become serious problems when they threaten one or more of the following fundamental human needs: (1) Solidarity: the need to maintain the social cohesion necessary for collective action addressing one’s collective challenges; (2) Agency: the need to make and enact decisions, individually and collectively, through one’s own efforts that are beneficial for life; (3) Gain: the need for material goods and services to sustain secure and productive lives; and (4) Environmental stewardship: the need to promote and preserve the health and stability of one’s ecosystems. These needs—which may be summarized by the acronym SAGE—are all essential for human flourishing. Pursuing all of them in tandem is the way towards a sage approach to life.

Throughout much of modern history, policymakers have been concerned with the satisfaction of these fundamental needs. However, material gain received special policy attention after the concept of gross domestic product (GDP) was developed by Simon Kuznets in the 1930s (Kuznets, 1934) and GDP became a crucial tool for managing economies during World War II. After the war, GDP was standardized internationally as a key economic indicator by organizations including the United Nations, the International Monetary Fund (IMF), and the World Bank. In the postwar period, many nations adopted GDP growth as a primary policy goal, later reinforced by the Washington Consensus over 1980s until the early 2000s.

In the aftermath of World War II, many countries witnessed high social solidarity, promoted through battles with a common enemy, as well as a strong sense of agency, derived from postwar reconstruction efforts. These social strengths had faded by the 1980s, just as  “The Great Narrowing”—focusing national success on GDP growth—was gaining strength.

In the aftermath of World War II, many countries witnessed high social solidarity, promoted through battles with a common enemy, as well as a strong sense of agency, derived from postwar reconstruction efforts. Furthermore, environmental stewardship had not yet become a major global policy issue. Under these circumstances, the policy focus on GDP growth was clearly appropriate. It is also clear that the focus on GDP growth was a boon for economic development and poverty reduction in emerging economies. But with the passage of time, starting in the 1980s in many developed economies, the rise of inequalities and environmental degradation indicated that a more balanced approach—giving more equal policy weight to solidarity, agency, gain, and environmental stewardship—was called for. It was then that the adverse consequences of The Great Narrowing became apparent. The absence of a balanced approach led to “The Great Social Discord,” in whose conflicts much of the world is currently embroiled.

This in turn led to the transformation of left- and right-wing politics into a split between populists (representing “the people”) and the “elites”. That split has been associated with a rise in nationalism and identity politics, accompanied by what may be called “The New Imperialism” of major world powers. These developments have vastly reduced the opportunities for effective collective action in response to the proliferating global problems.

The argument of this article (summarized in Figure 1) is straightforward. First, I explore the background to The Great Narrowing and then trace its implications through The Great Social Discord to The Transformation of Left- and Right-Wing Politics toward the split between populists and elites. I argue that this shift has led to transactional political relations and The New Imperialism. I examine how these developments have progressively undermined the capacity of governments, businesses, and civil societies to satisfy the fundamental human needs of solidarity, agency, gain, and environmental sustainability (SAGE). Finally, I argue for a new SAGE Accord that can help heal the current rifts and promote a sage approach to politics.

Background: Postwar reconstruction

The period of postwar reconstruction from 1945 to the late 1970s provides the background for The Great Narrowing. Over this period, economies evolved quite differently across the regions of the world.

Western European nations rebuilt their economies with significant state involvement, promoting material gain while maintaining solidarity and agency. Nordic countries, such as Sweden and Denmark, established extensive welfare states designed to reduce inequality and provide universal social services (Esping-Andersen, 1990). In West Germany, the “social market economy” emerged, combining free-market competition with social policies (Badinger, 2006). Meanwhile, Eastern European countries were largely under then-Soviet Union influence and followed centrally planned economic models. Their economies were characterized by state ownership and extensive control over production with little reliance on market mechanisms.

The U.S. built on the legacy of the New Deal, adopting Keynesian economic policies that combined market mechanisms with active fiscal and monetary policy to stabilize the economy. Social programs like Social Security and Medicare were expanded, underpinning a mixed economy that balanced private enterprise with public intervention (Stiglitz, 2002).

Japan’s post-war recovery was driven by coordinated industrial policies, state-guided investment, and close collaboration between government and industry, fostering rapid industrialization and technological progress. Newly independent countries in Asia (e.g., South Korea, Taiwan) adopted state-led development strategies characterized by import substitution and later export-oriented industrialization, combining market incentives with significant state planning and intervention (Amsden, 1989).

Following decolonization, many African nations embarked on ambitious state-led economic planning. Governments nationalized key sectors (i.e., mining and manufacturing) and implemented import substitution industrialization (ISI) policies to reduce reliance on former colonial powers. Limited administrative capacity and external debt pressures often constrained these efforts.

Many Latin American countries pursued ISI strategies, where governments protected domestic industries through tariffs and subsidies while promoting state-led industrialization. This period was marked by high state intervention to stimulate domestic production and reduce dependency on imports (Bulmer-Thomas, 2003).

The Great Narrowing

The economic challenges in the 1970s—especially stagflation and oil crises—challenged the postwar Western consensus and initiated The Great Narrowing. The early 1980s was the beginning of a period marked by an unprecedented acceleration in globalization. This era saw the convergence of ideological, geopolitical, technological, and institutional shifts that reshaped the global economic landscape.

The Reagan era brought deregulation, tax cuts, and a reduction in the scope of some social programs. Many Western European governments turned to neoliberal policies that emphasized deregulation, privatization, and the liberalization of trade and capital flows. This policy stance effectively reduced the role of the state in economic affairs and with it, a rising emphasis on material gain. The wave of globalization transported this policy stance around the world.

In Eastern Europe, the collapse of communism in the late 1980s and early 1990s prompted a rapid shift toward market-based reforms. Privatization, deregulation, and the establishment of new legal and institutional frameworks transformed these economies, though many countries retained some state intervention in strategic sectors.

In East Asia, some countries and regions—such as South Korea, Taiwan, Singapore, and Hong Kong—experienced rapid economic growth from the 1960s onward, with many reaching even greater heights after the 1980s. Their development models emphasized export-oriented industrialization, substantial investments in education, and strong state support for strategic industries (World Bank, 1993). These “Asian Tigers” reformed their institutions to promote efficiency, innovation, and market competitiveness while maintaining a level of state intervention that guided economic growth. Their success demonstrated that, even in a global economy often structured by unequal power relations, proactive government policies and a focus on human capital could drive sustainable growth (Amsden, 1989; Wade, 1990). But this growth often came at substantial social and environmental cost (Ortega and Snower, 2024).

Meanwhile, China’s economic reforms, initiated in the late 1970s and accelerated through the 1980s and 1990s, gradually introduced market mechanisms while retaining significant state control—a model often described as state capitalism. India’s liberalization in 1991 spurred significant growth in its service and technology sectors (Naughton, 2007; Panagariya, 2008). While the paths vary, common factors in these success stories include investments in education and infrastructure, sound macroeconomic management, openness to foreign investment and trade, and policies that foster innovation and competitiveness.

Faced with debt crises in the 1980s, many African countries adopted Structural Adjustment Programs (SAPs) prescribed by the IMF and World Bank. These reforms pushed for privatization, deregulation, and market liberalization, although the outcomes were mixed. While some sectors became more dynamic, many countries continued to struggle with persistent inequality and limited institutional capacity (Easterly, 2001; Mkandawire, 2001).

Economic crises in the 1980s led Latin American countries to adopt neoliberal policies under SAPs. This involved large-scale privatization, deregulation, and opening up to global markets. The approach spurred growth in some cases but also led to increased inequality and social tensions. By the 2000s, some countries (e.g., Brazil under Lula) had begun to reintegrate redistributive policies, blending market reforms with social protection measures (Bulmer-Thomas, 2003).

The Great Narrowing was supported by the creation of the World Trade Organization (WTO) in 1995, establishing a multilateral framework for negotiating trade agreements, reducing tariffs, and resolving trade disputes. These rules and institutions provided a predictable and transparent environment for international commerce.

Rapid advancements in information and communication technology (ICT) and transportation transformed global business practices and also promoted The Great Narrowing. The widespread adoption of the Internet, improvements in logistics (e.g., containerization), and enhanced telecommunications reduced the cost and complexity of global operations. Multinational corporations leveraged these technologies to create intricate global supply chains, sourcing inputs from around the world and accessing new markets with unprecedented efficiency.

Meanwhile, starting in the 1960s and 1970s, environmentalism transitioned from an elite concern to a mass movement with significant political influence. Governments worldwide responded by establishing environmental protection agencies and enacting comprehensive environmental laws. In the late 20th and early 21st centuries, environmental stewardship became a globally recognized policy goal. International agreements, such as the Kyoto Protocol and the Paris Agreement, exemplify collective efforts to address environmental challenges. Businesses, influenced by both regulatory pressures and consumer demand, have adopted Environmental, Social, and Governance (ESG) frameworks to guide their operations. In Europe, for example, the European Union has implemented regulations mandating sustainability disclosures, aiming to enhance corporate transparency and accountability.

Environmental policies and business practices have repeatedly fallen short of averting environmental crises. Because environmental challenges (such as climate change, biodiversity loss, and pollution) cross national borders, the lack of effective global governance has severely hampered efforts to implement cohesive strategies. Many environmental regulations have been weakened by the influence of powerful industry lobbies. Environmental policies have often been characterized by fragmented jurisdictional approaches and short-term political priorities. The dominant business model often fails to account for environmental externalities. By not incorporating the true cost of environmental damage into their financial calculations, companies have indirectly contributed to overexploitation of natural resources and ecosystem degradation. Both governments and businesses have tended to invest more in remediation after environmental damage occurs rather than in preventive measures.

The Great Social Discord

The neoliberal reforms of the 1980s and 1990s contributed to economic growth and efficiency in many countries. Developing economies, especially in East Asia, benefited from export-driven growth (Rodrik, 2006). The privatization of government-owned enterprises (such as telecom, banking and energy sectors in Latin America) improved service delivery and fiscal stability (Edwards, 1995). The implementation of strict monetary policies often reduced inflation and stabilized national currencies (Williamson, 1993). Nevertheless, neoliberal reforms also had significant downsides. Due to reduced state oversight and loosened labor protections, workers lost bargaining power and job security, leading to increased economic precarity and a sense of disempowerment. The privatization of key services such as healthcare, education, and transportation further shifted the focus from social welfare to profit-making. This not only increased inequality—since access to quality services became increasingly dependent on market ability—but also fragmented communities as public institutions that once fostered social solidarity were dismantled. The widening gap between the rich and the poor undermined a sense of shared destiny and community. This social fragmentation often led to political polarization and a breakdown of trust between citizens and their institutions.

By the turn of the 21st century, the limitations of an exclusive focus on material prosperity and individualism became increasingly apparent. The financial crisis of 2007-2008 and subsequent economic instability, followed by the upheaval of the Covid-19 pandemic, prompted a broad, nearly worldwide change in the political landscape.

The Transformation of Left- and Right-Wing Politics

Whereas traditional debates were often framed in terms of economic gain—with right-wing parties emphasizing free markets and limited government to enlarge the size of the economic pie and left-wing parties favoring state intervention and more equitable division of the pie—the contemporary political split is frequently described as one between “elites” (on the new left wing) and “populists” (on the new right wing).

Elites are seen as the established political, economic, cultural, and academic classes who have a disproportionate amount of privilege, wealth and power. They are perceived by the populists to be disconnected from the concerns of ordinary citizens. Populists claim to represent “the people” against these out-of-touch elites. Populism mobilizes a sense of alienation and disenfranchisement (Inglehart and Norris, 2016; Mudde and Kaltwasser, 2017). These two groups stand in implacable opposition to one another, tearing societies apart and leaving everyone helpless in the face of proliferating global crises.

The elitist approach is scientific, technocratic, managerial: define the problem; use the latest scientific insights to construct a solution; and implement the solution through policy instruments in the hands of private- and public-sector decision makers.

This approach requires expert knowledge in scientific research, technology, management and public policy–something that is available only to the initiated, each working in their narrow area of specialization. Explaining the insights, solution proposals and implementation mechanisms is complex–not well suited for untrained human brains.

The technocratic elites following this approach belong to the well-educated, influential, advantaged class, with ready access to financial, political and social resources. They are proponents of meritocracy, giving power to those with the greatest expertise, as defined by the experts. While they are opponents of what they consider to be the loci of unaccountable power—inherited privilege, along with customs and traditions lacking scientific rationales—their power, based on expertise, is practically unaccountable as well, since ordinary citizens don’t have access to this expertise and the implications of this expertise are not communicated to them in advance.

The populist approach is to give power to “the people.” “The people” are driven not by spreadsheets, but by stories—stories that highlight values, ambitions and aspirations, stories with protagonists and antagonists, stories that are anchored in place and time. These stories provide simple explanations for how the world works, expose injustices that must be righted, and shed light on power structures that must be overcome.

In the eyes of the elites, experts are making steady progress toward solving the world’s problems, but implementation is thwarted by “the people,” who do not follow elite-sanctioned rules and who vote for unhelpful politicians. When “the people” doubt the edicts of the experts, they allegedly reveal their ignorance. The severely underprivileged—some living in rural backwaters wracked by illness, drug and alcohol addiction, criminality and domestic violence—become objects of managerial solicitude. When “the people” show preference for their own nation, race, and religion, they allegedly reveal themselves to be supremacists, racists and fanatics. Hillary Clinton called them a “basket of deplorables.”

In the eyes of the populists, the alleged merit of the elites is inherently impossible to assess except by the elites themselves, who control the citadels of learning, bureaucracy and politics. What “the people” see is a world where elite rule has not solved the problems the elites claim to address—poverty, climate change, financial crises, and so on—but elite rule has definitely enriched the elites, while leaving “the people” behind.

In the words of David Goodhart, the elites are the “anywheres” while the common people are the “somewheres” (Goodhart, 2017). The elites are not place-based, since their expertise—in science, technology, management and administration—can be put to use anywhere. They are cosmopolitan, comfortable across national and cultural borders. They favor immigration, free trade, free exchange of ideas. By contrast, the common people are attached to their turf—for the underprivileged, this means pockets of rural poverty, urban slums, zones of industrial decline. When they oppose immigration, they reveal themselves to be xenophobic.

The elites value their privileged education and training, and especially the economic and social standing that it brings. Their lives rest heavily on the trappings of material affluence. “The people” have relatively few opportunities to gain access to the top educational institutions, and when they do so, they find themselves removed from their communities and neighborhoods of origin. When they choose to remain with their communities and neighborhoods, they allegedly reveal themselves to have deficient ambition. They are resentful of their relative deprivation, their disempowerment, and their fraying social bonds.

It is striking to observe that while developed and developing nations pursued radically different economic and social trajectories prior to the 1980s, both—for their distinctive reasons—engaged in The Great Narrowing and The Great Social Discord. The Great Narrowing was accompanied by rising inequality and job insecurity. In many developed nations, populist movements have capitalized on these economic grievances by blaming a global elite, technocrats, and international institutions for eroding national sovereignty and economic stability (Inglehart & Norris, 2016). In addition, a perceived erosion of national identity and traditional values—often linked to immigration and multiculturalism—has led right-wing populists in the United States and several European countries to argue that elites are out of touch with the “real” people and that they undermine the cultural foundations of society (Mudde, 2004; Pappas, 2019).

In many developing nations, by contrast, populist leaders have emerged as a response to long histories of colonial exploitation and neocolonial economic arrangements that have left local elites and institutions weakened. Populist movements often frame themselves as defenders of national dignity against both domestic oligarchs and foreign powers, asserting that local elites have betrayed national interests by aligning with external forces (Chandra, 2004). Furthermore, the extraction of natural resources by multinational corporations—often in collusion with domestic elites—has exacerbated economic disparities. Populist rhetoric in countries like Venezuela and Brazil, for example, has mobilized citizens around the idea that a small elite benefits from the nation’s wealth while the majority remains impoverished (Levitsky & Roberts, 2011).

The battle between populists and elites, both developed and developing nations, has been largely destructive of the four fundamental human needs with which this article began:

1. Solidarity: As the social and political lines between the technocratic, managerial class and the “left-behind” harden, social polarization spreads and social cohesion weakens (Mudde, 2004).
2. Agency: While populism could enhance the sense of agency among citizens by challenging established power structures, the concentration of power on both sides—in a single technocracy or a single populist leader—ultimately limits genuine participatory democracy and curtails pluralistic debate (Inglehart & Norris, 2016).
3. Gain: The combination of protectionist policies and restrictions on immigration—arising from identity politics and geopolitical tensions—reduces the efficiency of global value chains and hurts productivity growth.
4. Environmental stewardship: Under the influence of rising social tensions and economic vulnerabilities, environmental goals are receiving less attention from governments and businesses around the world.

If the battle between populists and elites continues, the outlook for human flourishing in both developed and developing nations is bleak. This battle promotes identity politics. The populist “us-versus-them” approach fosters an identity politics centered on the grievances of the disadvantaged. By contrast, the elites, particularly in liberal democracies, have often promoted policies of multiculturalism and inclusivity, pursuing an identity politics embracing diversity and protecting minority rights. While these policies intend to foster a more equitable society, populists argue that they disproportionately favor minority groups at the expense of the majority’s cultural identity.

Media coverage and political rhetoric amplify the populist-elite divide, often highlighting divisive cultural issues. This focus brings identity politics to the forefront of public discourse, as sensationalist narratives about cultural clashes or elite insensitivity to majority concerns attract significant attention. As identity politics intensifies, political debates shift from policy-based discussions to confrontations over identity issues.

The New Imperialism

In the ___domain of international relations, identity politics has reshaped international relations by shifting state behavior from broad, principle‐based cooperation toward more narrowly defined, transactional deals. When politics is driven by identity, the resulting policy choices reflect a narrower conception of national interest—one that is less about common human values and more about immediate, culturally defined gains (Fukuyama, 2018). States begin to value direct, immediate benefits—such as securing favorable trade terms or strategic military arrangements—over long‐term, multilateral cooperation. Instead of building institutions that address global challenges collectively, nations focus on transactional relationships that serve specific identity-based goals. This approach often undermines the broader, more collaborative efforts needed to tackle issues like climate change or global security, where shared interests and trust are critical.

This shift not only alters how states negotiate but also lays the groundwork for a “New Imperialism,” in which major powers seek to create spheres of influence reminiscent of historical colonization. When a state’s foreign policy is driven by a desire to protect its distinct identity, it is induced to pursue strategies that expand its influence over neighboring regions or culturally similar areas. Major powers may use economic aid, military cooperation, or diplomatic pressure to secure alliances with states that share similar identity markers. By framing international relationships as contests over cultural or national survival, dominant nations justify interventions that resemble colonial practices. They might, for example, undermine international institutions in favor of bilateral agreements that reinforce their own identity narratives. This can lead to situations where smaller states become dependent on, or subordinate to, the strategic imperatives of a major power.

The New Imperialism relies on instruments in the military, political, economic, and social domains. Some military power is exercised overtly, as in Russia’s invasion of the Ukraine. Moreover, major powers maintain extensive forward military bases, engage in joint exercises, and form strategic alliances to project power and secure strategic locations. Extensive arms export networks allow powers to influence regional balances.

Economic influence is exerted through preferential trade agreements, large-scale foreign direct investment, and infrastructure projects. By extending loans with onerous conditions–or even without them–major powers can place countries in a position of economic dependency. Critics argue that such practices—often termed “debt trap diplomacy”—undermine sovereign decision-making and resemble a new form of recolonization (Brautigam, 2009).

Powers also leverage soft power—cultural, educational, and ideological influence—to shape the political landscape in target regions (Nye, 2004). This includes high-level diplomacy, exchange programs, and international media that disseminate preferred narratives. Through institutions like the International Monetary Fund (IMF) and the World Bank, major powers often attach political and economic conditions to financial aid. Such conditionalities can force recipient countries to adopt policies that align with the donor’s strategic interests, effectively shaping domestic governance and economic policies.

Dominant powers use global media networks, entertainment, and digital platforms to propagate cultural values, lifestyles, and ideologies that favor their worldview. This form of “cultural imperialism” shapes perceptions and norms in target societies, often marginalizing local traditions and narratives (Tomlinson, 1999). Scholarships, academic exchanges, and research collaborations help inculcate certain values and standards that align with the interests of the sponsoring power. These initiatives can subtly influence the future leadership and intellectual climate in recipient countries (Rizvi & Lingard, 2010).

While these instruments have long been used, they are employed more aggressively in the new international relations regime. Hard power is becoming more important relative to soft power. The military, political, and economic instruments are becoming more important relative to the social ones. In today’s increasingly transactional, multipolar world, maintaining forward military bases, conducting joint exercises, and modernizing armed forces are seen as essential to deterring rivals and asserting influence. The rising centrality of economic and political instruments—such as trade agreements, sanctions, and investment in critical infrastructure—reflects a move away from soft power, where cultural and social exchanges once played a larger role (e.g., Fallon, 2015). This shift can weaken long-term social cohesion and the mutual understanding that underpins stable international relations.

Insofar as the transformation of traditional left- and right-wing politics into a battle between elites versus “the people” has changed the norms and values governing the distribution of power within developed and developing nations and the international relations among them, this transformation may have far-reaching implications for the future of the world order.

The Way Forward

In times of internal and external instability, new ideas are called for to provide a foundation on which a new stability can be built. These new ideas commonly involve a new understanding of human flourishing. Both elites and populists focus on different aspects of flourishing, which—contrary to the current political debates—should not be in conflict with one another since they are, in fact, complementary.

The elites—whether they are technocrats, business leaders, or policy experts—often view a nation’s success through the lens of material prosperity as well as environmental stewardship. This focus on material prosperity rests on the belief that economic success will eventually translate into better living standards, improved technology, and enhanced quality of life.

The populists decry the fraying of national, cultural and religious traditions, addressing an unfulfilled need for strong social bonds and a sense of belonging (Moffit, 2016; Fukuyama, 2018). They oppose that policies aimed at enhancing economic metrics at the expense of community cohesion and mutual support. They also condemn the absence of agency, or the failure to give ordinary people a real voice in the political process. There is, at least implicitly, a demand for individual and social empowerment.

Expressing the values of both sides in positive terms, a way forward becomes visible. Social solidarity, individual agency, material prosperity, and environmental stewardship are all necessary to achieve human flourishing—a state in which individuals can live fulfilling, healthy, and autonomous lives.

Humans are inherently social beings, and a sense of belonging and shared purpose is crucial for psychological well-being and social stability. Communities with strong interpersonal ties tend to have better health outcomes, higher civic participation, and greater overall happiness (Putnam, 2000). Solidarity also helps mitigate the adverse effects of economic inequality by fostering collective responsibility and mutual aid.

Agency is the capacity of individuals to make choices and influence their own lives. It is a cornerstone of democratic societies and is crucial for self-respect and personal fulfillment. Without agency, material gains and supportive communities may feel hollow, as individuals remain powerless to shape their own destinies. Agency enables citizens to participate actively in governance, advocate for their needs, and hold institutions accountable.

Material prosperity provides the economic foundation for meeting basic needs such as food, shelter, healthcare, and education. Material wealth enables access to technology, infrastructure, and services that improve quality of life.

Environmental stewardship is necessary to sustain life and maintain one’s physical and mental health.

The operating system of capitalism needs to be reoriented around these fundamental needs—SAGE for short. The current capitalist systems are heavily focused on material gain. Nations measure their success largely in terms of economic growth and businesses measure their performance primarily in terms of shareholder value. This approach is exemplified in the Washington Consensus (Williamson, 1990)—the set of economic policy prescriptions (market liberalization, fiscal discipline privatization and deregulation) that emerged as the “standard” reform package promoted by Washington, D.C.–based institutions (such as the IMF, the World Bank, and the U.S. Treasury Department) for developing countries facing economic crises. The underlying rationale was to create a macroeconomic environment that would attract investment, boost productivity, and spur economic growth by minimizing state intervention.

Even the Post-Washington Consensus (PWC)(Rodrik, 2006; Stiglitz, 2002)—which blends market-friendly reforms with policies aimed at building robust institutions and promoting education, healthcare and social protection, taking account of differing country contexts—still rests heavily on material gain, but this time it is focused more on its distribution that merely on its aggregate level. This has not proved sufficient to blunt the battle between populists and the elites.

An outstanding symptom of this insufficiency is the contrast between the consistent measurement of economic performance across countries and the inconsistent measurement of social and environmental performance. Gross Domestic Product (GDP) is one of the most widely used indicators of economic performance, largely because it is measured using standardized, internationally agreed‐upon accounting frameworks such as the United Nations’ System of National Accounts, or SNA (UN, 2009). This consistency allows for reliable comparisons of economic output across developed and developing countries.

In contrast, there are no single, universally accepted metrics for social solidarity, personal agency, and environmental stewardship. They are typically measured through qualitative surveys or diverse indicators that vary by country, making them less comparable internationally. Different countries and organizations use different survey questions, data collection methods and periods of assessment, making comparisons virtually impossible.  The update of the SNA does not promise to solve these problems.

In the absence of consistent measurement, there can be no consistent reporting, which means that there can be no consistent set of policies to promote a balanced approach to economic, social, and environmental progress. But precisely such a balanced SAGE approach is necessary to address the ills highlighted by the battle between the elites and “the people.”

The SAGE Accord

The time has come to move beyond the current international policy system to a “SAGE Accord,” pursuing a balanced approach to solidarity, agency, gain, and environmental stewardship. It is an accord in the following senses. 

First, solidarity, agency, material gain, and environmental performance are all universal human needs that must be satisfied in order for people to thrive. Solidarity provides the social bonds and trust necessary for mutual support and collective problem-solving. The desire to form deep social bonds and belong to social groups is a fundamental human motivation, critical for mental health and emotional resilience (Baumeister and Leary, 1995). Social capital and collective identity are crucial for building cohesive communities (Putnam, 2000). Agency empowers individuals to make choices and take responsibility for their lives. The exercise of autonomy, competence, making choices, and exerting control over one’s life is central to intrinsic motivation and psychological well‐being (Deci and Ryan, 2000). Material gain ensures that basic needs are met, serving as a platform for higher-order aspirations. It enables individuals to sustain their physical lives, achieve economic security and live in freedom (Sen, 1999). Environmental sustainability preserves the natural resources and conditions essential for health, well-being, and economic stability. Exposure to natural environments is linked to improved cognitive function, stress reduction, and overall well‐being (Kaplan and Kaplan, 1989). Environmental degradation not only jeopardizes individual health but also disrupts community resilience and economic stability.

Second, SAGE can be considered an accord since many governments around the world–with important exceptions like the United States under the current administration–generally structure policies and institutions with the aim of fostering social solidarity, promote individual agency, secure material prosperity, and ensure environmental sustainability. Regarding solidarity, governments invest in public healthcare, education, and social security programs to build community bonds and reduce inequality. By supporting local organizations, public spaces, and civic participation (e.g., town meetings, community centers), governments help to foster social capital. To promote agency, governments establish electoral systems, independent judiciaries, and free media to empower citizens. By protecting freedom of expression, association, and thought, many governments create an environment in which people can pursue their goals and exercise personal autonomy. Needless to say, governments devote much attention to material gain, seeking to create conditions for economic growth through monetary and fiscal policies, investments in infrastructure, and support for innovation and industry. Progressive taxation and social security systems are used to distribute the gains from economic growth more equitably, ensuring that material prosperity supports a broad base of society. To promote environmental sustainability, governments enact laws and regulations to protect natural resources, reduce pollution, and combat climate change. It is worth emphasizing, however, that governments do not satisfy these SAGE needs in a balanced way, since only material gain (in the form of GDP) is measured regularly and consistently across nations and time.

Finally, SAGE is an accord since the SAGE dashboard covers the main elements of the prominent existing measures of well-being. In the OECD Better Life Index, solidarity is covered by “community and civic engagement,” agency by “education and skills,” material gain by “income, housing, jobs and earnings, and environmental stewardship by “environment (air quality, water).” In the Sustainable Development Goals (SDG) Index, solidarity is covered by SDG 1 (No Poverty) and SDG 10 (Reduced Inequalities); agency by SDG 4 (Quality Education) and SDG 16 (Justice & Strong Institutions); material gain by SDG 8 (Decent Work & Economic Growth) and SDG 9 (Industry & Infrastructure); and environmental stewardship by SDG 13 (Climate Action), SDG 14 (Life Below Water) and SDG 15 (Life on Land).

Furthermore, solidarity is measured by the Social Capital Index and the World Values Survey (2020). Agency is measured by the Human Development Index (UNDP, 2022) and the Self-Determination Index. Material Gain is captured by GDP per capita, its distribution by the Gini coefficient, and poverty by the Multidimensional Poverty Index (UNDP, 2022). Finally, environmental sustainability is measured by the Environmental Performance Index (Wendling et al., 2020) and the Ecological Footprint Index.

The SAGE Accord builds on the PWC but brings its implications into sharper focus. In line with the PWC, the SAGE Accord emphasizes the need for social policies to complement market reforms and macroeconomic stabilization, but the SAGE Accord goes further by specifying solidarity and agency as explicit goals of government policymaking, alongside economic and environmental goals.

The focus on solidarity and agency goes beyond the traditional focus on reducing inequality. Solidarity and agency are separate domains, distinct from material gain. They can be achieved in equal and unequal societies, as long as the politics are participatory and socioeconomic opportunities are widely available. In the SAGE Accord, solidarity- and agency-promoting policies should become explicit categories of government activity that are monitored and reported on, alongside economic and environmental policies.

Solidarity-promoting policies include universal healthcare (to ensure that all citizens have access to medical services regardless of income), support for inclusive schooling (to help create common social experiences and equip citizens with critical skills for civic participation), investments in community centers, public spaces, and local cultural programs (to encourage face-to-face interactions and civic engagement and strengthen social ties), labor and employment regulations to support fair treatment and economic security.

Agency-promoting policies—designed to empower individuals to make decisions about their own lives, participate actively in society, and pursue personal development—include investment in high-quality, inclusive education (including curricula that emphasize critical thinking, civic participation, and problem-solving), initiatives to broaden access to higher education and promote lifelong learning (such as subsidized college tuition or vocational training programs), active labor market policies (to encourage skill acquisition and job search), microfinance and entrepreneurship programs (such as start-up grants and business incubators), as well as laws safeguarding freedom of expression, privacy, and political participation.

In line with the PWC, the SAGE Accord stresses that these policies must be tailored to the unique circumstances of each country. Governance institutions should be strengthened not just to ensure that markets function effectively and equitably (the focus of the PWC), but also to promote social cohesion and empowerment. This framework promotes a more concrete, holistic view of growth and development that links economic, social and environmental policy.

The SAGE Accord insists that solidarity, agency and environmental sustainability be measured with the same consistency across countries and through time as GDP. A significant step in this direction has been made through the SAGE dashboard (Lima de Miranda and Snower, 2020, 2022a,b), which covers over 100 countries for the past 15 years and is the subject of lively ongoing theoretical and empirical research (Mayer and Snower, 2023; Coyle, Mayer and Snower, 2024; Snower, 2024; Snower, 2025). The measurement methodology is imperfect and inevitably arbitrary, but that is not different for the measurement of GDP.

We would do well to remind ourselves that GDP fails to capture many aspects of economic prosperity (such as income inequality, unpaid work such as household labor, many environmental costs, or the quality of healthcare and education), GDP calculations involve arbitrary decisions on its components (e.g., speculative financial activities, like high-frequency trading, contribute to GDP even though they may not create real value) and arbitrary methodological choices (such as price index constructions and shadow economy adjustments). The measurement of solidarity, agency, and environmental stewardship also involves arbitrary decisions on what to include and how, including the assessment of subjective variables. Nevertheless, consistency and comparability in measurement are as important for solidarity, agency, and environmental stewardship as they are for GDP, since consistent and comparable measures place these drivers of flourishing firmly into the public discourse and make government policy objectives in this regard operational.

Consistent measurement of the SAGE dashboard should be understood as a first step towards the measurement of government policy effectiveness and business performance on this basis. This, in turn, is a first step towards accounting for and reporting of economic, social, and environmental costs and benefits of government and business activities. Without this, there is little hope of constructing a new model of growth and development that covers the traditional economic concerns as well as the concerns highlighted by populists.

For nations to succeed, they need to perform well across the entire SAGE spectrum. For businesses succeed, their pursuit of profit needs to be brought into alignment with solidarity, agency, material gain for all, and environmental stewardship. Governments can promote such alignment through taxes and subsidies, government procurement contracts conditions, license to operate, law and regulations.

Needless to say, a SAGE approach to policy will not automatically bring the elite-populist battle to an end, since the battle is currently driven by two-sided moral outrage at injustices committed by the opposing side. Threats attract more attention and emotion than the pursuit of positive values. But addressing the ills underlying the battle—alienation, disempowerment, poverty, and environmental degradation—is a necessary step toward achieving a new order of social, political and economic stability. Beyond doubt, the pursuit of SAGE will need to be reinforced by concrete SAGE policies, as well the threat of instability that a continuation of the battle is likely to bring. Finally, SAGE policies are likely to promote a rebalancing of societal goals around the values underlying SAGE, namely: care, liberty, utility, and ecoethics.

The time has come to pursue growth and development in these terms. This means that the G20 should promote a policy and institutional context whereby governmental success and business performance is evaluated in terms of the SAGE dimensions.

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