The West’s Intellectual Bankruptcy

February 21, 2026

Francesco Sylos Labini

Il Fatto Quotidiano

There is a red thread linking the 2008 financial crisis, China’s technological rise, and the failure of sanctions against Russia: the West’s stubborn inability to read reality when it contradicts its own models. In 2008, the mistake was not technical but cultural. The real state of the global economy was ignored, as were the destabilizing effects of an out-of-control financialization, interpreted through ideological lenses as a sophisticated tool for risk management.

The symbolic scene of that blindness remains the Queen of England’s visit to the London School of Economics, when in 2008 she asked economists: “Why did nobody see it coming?” The answer, never openly stated, was obvious: because the theoretical model did not contemplate systemic failure. The same myopia is repeated today in the assessment of China’s technological rise. For years, it was argued that a non-liberal political system could not generate structural innovation or sustained technological leadership. In Why Nations Fail, Daron Acemoglu (Nobel Prize in Economics, 2024) and James Robinson foresaw an inevitable slowdown in China. It was a prediction consistent with the dominant paradigm. But reality followed a different path. After more than forty years of sustained growth, with consolidated leadership in renewable energy, artificial intelligence, telecommunications, and advanced manufacturing, we continue to read that China will “collapse next year.” It is a prophecy that recurs cyclically—always postponed, always disproven, yet never truly abandoned.

Finally, the sanctions against Russia. Here too, a rapid collapse, an irreversible crisis, and unsustainable isolation were predicted. None of this has occurred. The Russian economy has not imploded; it has shown adaptability, commercial reconfiguration, and a stimulus to domestic production. This is not to deny the difficulties, but to recognize that the forecasts were based more on ideological expectations than on structural analysis. The point is not to defend China or Russia, nor to absolve the Western financial system of responsibility. The point is something else: the West continues to interpret the world through theoretical categories that no longer describe it.

If Western political classes today appear improvised and inadequate, the problem runs deeper: it is a crisis of the intellectual class, which has abdicated its role as critical conscience and laboratory of ideas in public debate. In particular, over recent decades economics has been progressively transformed from a historical-political discipline into a formalized and self-referential system. Increasing mathematization, far from strengthening its rigor, has often expelled history, law, institutions, and social conflict from analysis.

Mainstream economics proclaims itself neutral and objective, yet it has knowingly concealed ideological choices. Conflict has been recast as error, and alternatives as heresy. Thus deregulation, austerity, and privatization have been legitimized, eroding democratic sovereignty and widening the gap between technocracy and citizens. Meanwhile, the West loses economic weight and political cohesion, while continuing to repeat that there are no alternatives.

In 2008, the instability of the financial system was not seen. Today, the structural transformation of the global economy is not being acknowledged. Tomorrow, in the face of a new shock, we may once again ask why nobody foresaw it. But the real question is not why nobody saw it coming. The real question is: why do we continue to entrust ourselves to those who can no longer read the world?