Epstein exposes democracy’s fault lines

Over 30 years ago, on one cold November night, when tens of thousands of Germans from east and west tore down the Berlin Wall, they were trying to send a powerful message: that there shall be no barriers, no hurdles and no walls to human freedom and endeavour in a free and open new world.

In the years that followed, a sprawling global architecture was built to give voice to that aspiration. Borders vanished across Europe with the adoption of the Schengen framework. A World Trade Organisation was formed to advance and regulate trade, attracting the participation of sundry political systems from China to the United States. Erstwhile socialist and communist economies loosened restrictions on foreign trade and investment. And vast numbers of people from those countries began migrating to the West to access new economic opportunities.

Political change followed as well. On either side of the turn of the millennium, there was a surge in the transition to democracy across the world. Leaders from various minority communities made history in their respective countries by becoming the first from their groups to win elections.

Behind this wave of optimistic fervour, there was a loud and oft-repeated belief: that no matter where one is born, if one works hard enough, they will find the opportunities to level up in life. But a quarter of the way into this new century, that belief is dying a quiet death.

Last year, the Organisation for Economic Cooperation and Development (OECD) – a global forum which brings together many of the world’s major economies – published a couple of studies which investigated what determines whether a person would become economically successful.

The findings were profound. At least 25% of the total inequality in income was attributed to “inherited circumstances”, including gender, place of birth, and how well your parents did in life. In particular, whether or not your parents have a university degree has an outsized impact on whether you will gain the skills needed to thrive in the knowledge economy: skills such as literacy, numeracy, and adaptive problem solving.

These trends have begun to have a telling social, political, and economic impact on our time. In many parts of the world, those who come from rural countryside or poorer households are losing trust that they can compete to earn a better life and livelihood than their parents. The optimistic fervour that had torn down the Berlin Wall – because everyone believed that an open and interconnected world would help them forge a better future – has been steadily replaced by a world of tariffs, visa restrictions, and identity wars.

That brings us to the world of the disgraced sex offender and former Wall Street financier, Jeffrey Epstein. For years, Epstein used his immense wealth to buy silence from his victims, accomplices, and acquaintances. But he also used it to twist laws and institutions to help people within his circle get a leg-up in their own business and professional endeavours.

Epstein’s network of clients and favours was eclectic. A tech billionaire used him to raise money for his nonprofit. A minister and diplomat used him to get access to potential investors. Another used him to overturn his daughter’s rejection from an Ivy League school. Many of these exchanges occurred well past his initial conviction for sex crimes.

The popular interpretation of what all this means is multifold. One, people believe that Epstein was able to continue committing heinous crimes with impunity because he was rich and powerful. Two, to become so rich and powerful, people now think that networks, connections, and favours matter as much – if not more than – skill or merit. That structural fact was part of Epstein’s power: by virtue of knowing him, many benefited where they otherwise may not have.

In that regard, Epstein’s success was the result of an institutional failure. The role of laws, norms, and institutions is to maintain a level playing field for the rich and the poor, the powerful and the weak. That level playing field forms the basis of a meritocratic economy in which people with few resources can rise up the ranks.

When the wealthy and the powerful sidestep or bend those institutions, it shakes the public’s faith in the level playing field. That leads to the rise of populist politics – and politicians who promise to break and bust the institutions that have lost the trust of the people. But breaking is not the same thing as repairing.

The writer is a student of all things global and, self-confessedly, master of none, notwithstanding his Columbia Master’s, a stint with the UN and with monarchs in the Middle East.