US division ‘at highest level since civil war’, warns business chief

Paul Bassat has warned about the similarities in political fragmentation between Australia and the US, sounding the alarm on the ‘post-reform era’.

Paul Bassat is one of America’s top venture capitalists. Picture: Renee Nowytarger.

Paul Bassat, one of the nation’s leading venture capitalists, says division in America is at its highest level since the civil war in the 1860s and should be a warning for Australia to better address intergenerational inequality and political disenfranchisement.

Speaking to The Australian in New York, Mr Bassat expressed concern about the similarities in political fragmentation between Australia and America, while sounding the alarm on what he called the “post-reform era”.

He argued that addressing the housing crisis in Australia, the key objective of his community-based not-for-profit organisation Amplify, could help prevent the country from experiencing the same depth of polarisation and disenchantment with the political system as seen in the US.

The co-founder of Seek and venture capital fund Square Peg argued that the political climate in the US pointed to growing challenges for Australia in adequately responding to enduring policy problems.

These challenges included the deepening divide between younger and older generations, a sense that future living standards were deteriorating, a more fractured national conversation, and the emergence of a less civil and more aggressive form of politics.

“(It’s) very easy for Australians to say, ‘Oh, there’s all this craziness in America’ and pretend that it’s a long way away. But we’re just seeing Western societies broadly – we’re seeing so many manifestations of the issue – whether it’s increased dissatisfaction with politicians and the system more broadly, the polarisation … people just kind of talking a different language in terms of their narratives,” he said. “And so I think there’s absolutely warnings in terms of what’s happening here (America).”

Capturing the scale of the crisis, Mr Bassat suggested there was now a level of fragmentation in America “that hasn’t occurred in this country, presumably since the civil war, but certainly for a long, long time”.

“The Trump phenomenon is obviously also a phenomenon of people being disaffected and feeling like the system’s not working for them,” he said. “And so any time where people don’t feel that a system is working for them, (it) is no surprise that they kind of latch on to other ideas and other alternatives.”

Referencing the recent political victory of self-described democratic socialist Zohran Mamdani in the race for mayor of New York City, Mr Bassat noted that “you’ve got a level of polarisation here. This city’s just been through an election. Clearly there is a disaffection among younger Americans and younger Australians and younger folks in all sorts of different parts of the world that’s manifesting itself in certain ways.”

Mr Bassat said that, in Australia, “housing is certainly at the root of that” and warned that the “Australian promise feels like it’s been broken”.

“There’s relatively little policy reform,” he said. “Most involves throwing money at folks and hoping some of the votes stick. Why is it the case? I don’t know, but what we hope to do at Amplify is put a little bit of a dent in that and move to a world of good policy and good politics.”

Amplify, a nonpartisan organisation launched in August 2024, hopes to leverage community engagement and input to drive policy reform and then advocate for those ideas. The vision is to help realise the “Australian version of the American dream” of rising living standards and a better future for the next generation.

But Mr Bassat said that the emergence of a more uncivil form of politics was a “real challenge” and pointed to the situation in the US where people were increasingly “talking through fragmented communities, largely on social media”.

“The truth is when you’re on the left here (in America), you can point to a lot of bat-shit craziness on the right,” he said. “And if you’re on the right, you can point to a lot of that craziness on the left. And I think there’s big elements of that (which) we have in Australia.”