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The failure of the Grand Bargain

17/07/2026

Work hard, play by the rules and you will have a successful and good life. Or so we’re told. Trump’s Presidential victory and the rise of One Nation in Australia says a lot about how democracy has failed us.

By Tim Dean (The Ethics Centre)

Trump and the Grand Bargain

The ‘Grand Bargain’ of modern liberal democratic society goes by different names, with a different spin, in every democracy through terms like the “American Dream” or the “Great Australian Dream”, or in Australia as the "Fair Go". But it goes beyond just the idea that opportunity is open to all or that home ownership is a natural step towards financial security. It’s like an implicit agreement between the state and the individual: play by the rules and everything will be OK.

However, many people in ‘rich’ countries are not OK. I barely need to mention inflation, the rising cost of living, stagnant wages, unaffordable housing, exorbitant rent, the offshoring of jobs, the rise of insecure gig work, the closure of traditional industries and manufacturing, not to mention the fact that corporate profits are skyrocketing and the top 10% are doing better than ever. The Grand Bargain has been under pressure since the 1990s and, arguably, it’s been broken ever since the Global Financial Crisis of 2008-09.

And people are angry. This is not just because the failure of the Grand Bargain has resulted in real material disadvantage, but the anger has a moral dimension due to a deep sense of injustice at the failure of the state – especially politically and economically – to live up to its end of the Bargain.

Injustice breeds outrage, and outrage is a moral emotion that creates a desire to punish the perceived wrongdoer. In this case, the perceived wrongdoers are the political ‘elites’ who have been instrumental in promoting economic growth at the expense of the workers within that economy. In most modern liberal democracies, those elites include members of both the Left and the Right, especially since the neoliberal turn of the 1990s. So, over the last two decades, no matter who people vote for, the Grand Bargain has remained broken.

The Grand Bargain isn’t just about economics, it’s also about identity. In order to live a good life, we need more than just material prosperity, we also need to have our identity recognised and to experience a sense of pride. Whether justified or not, large segments of the population in many liberal democracies have felt that their identity has been under attack. Neoliberal policies have taken away the work that gave them a source of meaning and pride in their lives. 

It doesn’t matter whether Trump or Hanson's solutions are the right ones to fix the grievances they are tapping into. What matters is that they validated public outrage at the failure of the Grand Bargain, and presents themselves as strong enough to do something about it even in the face of powerful vested interests (even if they, and their friends, are those vested interests).

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The Ethics Centre

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