In
Part 1 of this series, I outlined the symptoms of decline in the
UK, Canada, and Australia — falling living standards, social division, censorship, and a sense of frustration that governments are failing their people.
Some claim this is the work of a conspiracy. I disagree. What we are seeing is the inevitable result of natural incentives that drive the actions of governments, corporations, and media. Each group is acting rationally in its own self-interest, but the combined effect is harmful to the average household.
Let’s break it down.
1. Immigration as a GDP Booster
Governments are under constant pressure to deliver “growth.” The most convenient measure of performance is GDP. One quick way to boost GDP is through high immigration. More people mean more consumption, more housing demand, more infrastructure spending.
But what looks good for government figures doesn’t look so good at the household level:
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Corporations get a larger pool of workers, which suppresses wages.
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Governments can point to rising GDP, regardless of whether individuals are better off.
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Households face stagnant incomes, skyrocketing housing costs, and greater competition for services.
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Communities struggle with assimilation, sparking xenophobia and social tensions.
This cycle fuels resentment and protests, which in turn pushes governments to limit free expression, in order to contain the anger and maintain their grip on power.
2. Housing Market Distortions
For decades, housing has been treated less as shelter and more as an investment vehicle. Politicians benefit because rising house prices create a sense of wealth among homeowners (and homeowners are reliable voters). Banks and investors benefit from ever-rising asset values.
The losers? Younger generations and renters are priced out of the market, stuck with spiraling rents, and seeing their disposable income vanish. What began as a natural policy incentive — protect the “dream” of home ownership — has turned into a massive drain on household budgets and a wedge between generations.
3. Energy and Climate Policy Incentives
Governments want to be seen as global leaders on climate. Corporations want subsidies for renewables. Media want dramatic stories of “saving the planet.”
But the result has been chaotic transitions:
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Intermittent supply from wind and solar without reliable backups.
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Escalating energy bills that hit the poorest hardest.
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Heavy subsidies and land use changes that displace farming and bushland.
Again, each group pursues its own incentives, but the combined effect is unstable, expensive, and unfair energy systems.
4. Media Incentives to Divide
Media companies live on attention. Fear, outrage, and division sell better than reasoned debate. So coverage exaggerates extremes, misrepresents protests, and paints one side as villains while excusing the other.
This doesn’t just reflect division — it manufactures it, stoking resentment and eroding social trust.
5. Political Incentives to Silence Dissent
Faced with rising protests and online anger, governments have a simple self-preservation instinct: clamp down on free expression. Whether through new laws, censorship, or “cancel culture,” the goal is the same — to quiet dissent before the next election.
But silencing people doesn’t solve their grievances. It only deepens mistrust and makes the social fabric weaker.
A Web of Self-Interest
Put it together, and you can see the pattern. Governments want higher GDP. Corporations want cheaper labor and bigger markets. Investors want rising asset values. Media want clicks. And politicians want calm voters.
Each group acts on its own incentives, and none are necessarily “evil” in isolation. But the combined outcome is declining living standards, higher costs, lower wages, broken trust, and social division.
It is not a grand conspiracy. It is the natural result of self-interest colliding in ways that punish ordinary households.
Next: What Can Be Done?
If incentives drive behavior, then the way forward is to change the incentives. In Part 3, I’ll look at what society can do to realign these forces — to put households and communities back at the center of policy, and to rebuild prosperity and cohesion.
