30/05/2012 06:19 BST | Updated 29/07/2012 06:12 BST

Individualism Undermines Leadership in the West

"And when we think we lead, we are most led."

Lord Byron

"The task of the leader is to get his people from where they are to where they have not been."

Henry Kissinger

One of the above quotes is by a poet who was mad, bad, and dangerous to know. The other was uttered by a man who had to deal with mad, bad, and dangerous characters as National Security Adviser. These two sentences describe the predicament of the West. It needs leaders who are not afraid to find new ways to meet the daunting challenges facing the global community. Prosperity is hit by economic headwinds, financial landslides, political storms, and natural catastrophes. These problems need to be addressed. But leaders are led by their quick-tempered populations rather than taking voters by the hand and showing the way forward.

The US is bogged down in a tug-of-war between two parties that indulge in ideological hair-splitting and political fencing. The government has been running on emergency legislature, because Democrats and Republicans constantly fail to reach agreement on a budget. Yet support for stopgap bills is waning rapidly. In the second half of this year the parties again need to raise the debt ceiling. Otherwise the government will no longer be able to borrow another dollar.

Parties should find common ground, but politicians cling to ideological convictions, afraid to lose grassroots support in an era of a hyper-partisan and highly-polarised politics. It is high time that politicians reach out to the "other side" and are not afraid to tell people that the only remedy is to swallow a bucket load of bitter pills. Yet Republicans and Democrats both lack politicians with enough vision, guts, and charm to lead the way. But American people also have to do their bit. They should wean themselves from opportunistic short-term thinking. If they don't, good ideas will never make it beyond the drawing board and the debt mountain will stay gigantic.

Europe too needs politicians who dare to say what needs saying and stand up to populist tendencies. It would be very unwise to let the eurozone go belly-up. But in functional terms the EMU cannot stay as it is. Further integration is necessary. Competitiveness in the south should improve as labor costs drop, innovation is boosted, job markets become more flexible, and debts are reduced dramatically. To accomplish this, leaders are needed who have earned the trust of voters and are not afraid to march in front of the troops. Simultaneously, the electorate in the northern states needs to make sacrifices to save their profligate neighbors. The latter should admit they have lived far beyond their means and now need to wear their belts tighter.

In Japan things are looking not much better. Hampered by a torpid economy and shocking national debt for decades, the brute forces of nature plus man-made calamities have been tripping up Japan. It risks remaining stuck in inertia, aimlessness, and resignation. Yet politicians seem powerless - the country got through six prime ministers in six years - while voters are oblivious to the seriousness of a public debt running to 200% of GDP. Japanese politicians could show their teeth, with the support of a population yearning for optimism and change. Should Japan find its feet after last year's triple disaster, political deadlock, and "lost" economic decades this would be a moral boost for the rest of the world. "If the Japanese can do it, so can we." Yet a happy ending is unlikely. The world could suddenly wake up to the extremely harsh reality of the Japanese debt mountain. This will have an effect on countries with government finances in better health.

The negative scenario is more likely because the world has become progressively more individualistic. Paradoxically, the reason is that developments such as more freedom and the communication revolution have given people the illusion that they are masters of their own lives. They no longer want leaders who tell them what's best. Instead, the notion has taken hold that leaders should follow the people. While it balks at immigrants, tighter belts, and solidarity the electorate will hinder the politicians in their attempts to resolve the debt crisis and other problems.

If the West fails to mend its ways it will be like a mammoth tanker that is no longer able to change course. Under such conditions only a much bigger and deeper crisis can force countries to act differently. Yet by then they will no longer have a safety net to cushion the blow and spread the pain.