Capitalism and democracy have been the cornerstones of Western society, at least since the end of the Second World War. The glorious decades of economic rejuvenation – “Les Trente Glorieuses” from the mid-1940s to the mid-1970s – are often attributed to the unique blend of democratic capitalism prevalent in these societies.

With Communism’s slow decline through the 1980s, most transitioning countries across the world saw democratic capitalism as their only steady state objective. Indeed, for a brief moment in the early 1990s, as the Soviet Union ignominiously disintegrated, it appeared that Francis Fukuyama was correct – that we would witness “the end of history” with a triumph of liberal democracy and free markets.

But if the end of history ever were within our grasp, we have apparently since squandered that moment. In last few years, especially since the financial crisis of 2008, we have witnessed steady erosion in support for democratic capitalism, particularly in the US and Western Europe, and particularly among the young. According to a 2016 survey published in the Journal of Democracy, the proportion of U.S. residents who believe it is “essential” to live in a democracy has declined from over 70 per cent for the 1930s birth cohort to about 30 per cent for the 1980s birth cohort. In Europe, the equivalent proportions have declined from over 50 per cent for the 1930s birth cohort to about 40 per cent for the 1980s cohort. Among US citizens aged 18 to 29, another 2016 survey from Harvard’s Institute of Politics found only 42 per cent support capitalism as a way of organising economic society. Support for socialism was at 33 per cent in the same group. The 2017 Edelman Survey reports that about 60 per cent of Britons and Americans believe “the system is not working”. The general population’s trust in four key institutions — business, government, NGOs, and media — has declined broadly, a phenomenon not reported since Edelman began tracking trust among this segment in 2012.

What went wrong? Why has the general public in so many Western societies lost trust in democratic capitalism? Primarily, I believe because of structural mismanagement by elites in our societies – a mismanagement born of three factors: a simplistic ideology, greed, and a lack of leadership. Let me take these in turn.

First is the ideology that capitalism is the natural order of man; a self-sustaining and seemingly indestructible system of economic organisation. The critical assertion here is that an “invisible hand” guides individual self-interested behaviour in markets toward a social optimum. This is often represented by quoting Milton Friedman, who argued famously in the New York Times in 1970 that “the social responsibility of business is to increase profits.” Taking Friedman’s quote in isolation, the implication is that self-serving behaviour by all – elites included – is not only permissible, it is desirable. This ideology, which does have some empirical validity in liquid and competitive markets, has been extended to all areas of society, including corporate lobbying in political processes. Indeed, such political processes have come to be seen as “political markets.” In my 2015 book, Political Standards, I argued that this ideology, when applied in the context of esoteric regulatory institutions that govern the very foundations of capitalism (e.g. the accounting rules in society), justifies and even encourages business to undermine free and fair markets.

The result is a systemic subversion of capitalism’s original objectives – enabling individual liberty and economic prosperity – into a crony capitalism that enriches elites who have the technical capabilities and scale to operate in these “thin” political markets. Ironically, Friedman himself is often selectively quoted in this endeavour – as he warned that the “responsibility […] to increase profits” was subject to the “rules of the game.” I do not believe that he intended his words to justify the manipulation of the very rules that define capitalism.

But a misunderstood ideology is not entirely to blame for decaying public trust. Next, layer on greed – as elites viewed this ideology as an excuse for ever-more profit accumulation. Time after time, while important issues in public policy in the West were being crafted, some businesses simply saw an opportunity to push for more profits. For instance, as America and Britain grappled in the 1990s with the implications of free trade with poorer countries and a laxer immigration policy, particularly on low-skilled immigrants, many businesses welcomed the cheap labour, failing to consider what this meant for their current employees or even their customer base.

Perhaps nowhere is this phenomenon of greed embracing ideology more prevalent than in the shaping of corporate tax policy. In the US, corporate tax law is now a cesspool of opportunism – with exception after Byzantine exception crafted to lower corporate obligations to the state. In lobbying for this perversion, corporations have often euphemised their tax evasion as being “tax efficient” – wilfully co-opting the notion of “economic efficiency” as an excuse for their avarice.

The final ingredient in explaining capitalism’s loss of goodwill is a lack of leadership – for not all business leaders have fallen victim to a simplistic ideology or embraced unfettered greed. Indeed, many such leaders have long recognised the nuance that capitalism is fragile: that “free and fair markets” are not inherently natural to man, but rather a social construct, useful in many settings, where they must be actively preserved through good laws.

But many of these leaders plead an inability to act in the broader public interest, arguing that doing so would put them at a competitive disadvantage versus their more profit-minded peers. In my book, I describe being at a conference at Harvard Business School that had assembled some of the titans of corporate America to discuss the crisis in capitalism. Their verdict: yes, there is a problem; no, business can’t be expected to do much about it. The sentiment in the room: “The business of business is business.”

If the data on the declining trust in capitalism is accurate, the stakes are high. Inequality in the Western world is rising, and belief that the political system is unfair is likely delegitimising liberal democracy itself. Now, more than at any time in recent history, is the moment to correct the narrative on capitalism, to hold elites to account for unrestrained greed, and to call for bold leadership from those most capable of delivering it.

History has not been kind to generations who have previously ignored this moment.

The work starts here – in schools of leadership like Oxford’s Blavatnik School; in how we seed a habit of empathy; in how we cultivate critical analytical thinking; in how we empower moral duties; in how we inspire courageous action.

Karthik Ramanna is Professor of Business & Public Policy and Director of the MPP at the Blavatnik School of Government.

This article was originally published in The Oxford Government Review