Own the Future: 50 Ways to Win from The Boston Consulting Group

Chapter 36

The Return of the Politician

Dieter Heuskel and Martin Reeves

Today, Vilfredo Pareto, the Italian economist and philosopher, is best known for his principle that 20 percent of a group is responsible for 80 percent of its results. In the early part of the twentieth century, however, Pareto was equally well known for his theory about the rise and fall of power in society. In Pareto's view, power rotates among different groups of elites. Overlooked in recent years, Pareto's “circulation of elites” theory may be about to make a comeback.

For the past 30 years, business leaders have essentially called the shots, proclaiming markets, deregulation, and globalization as their mantras. Global capitalism has triumphed at the expense of national governments. The world of business has attracted the brightest talent and offered the most attractive careers and compensation.

The next few years will likely witness the return of the politician and the advent of a larger role for the state in the economy. When this article first went to press in 2010, Barack Obama, Angela Merkel, and Nicolas Sarkozy had shoved business titans off the front page. Politicians are now the ones in the driver's seat.

Evidence for the swing in power from corporations to governments is all around us: new trade barriers, the 2009 U.S. takeover of General Motors, the nationalization of banks, greater regulation of financial markets, and the reshaping of economic activity in the interest of climate control. Business ...