Capitalism Breaks Under Toxic Leaders
- Paul Knowlton
- May 2
- 6 min read
Updated: May 7
If you’ve been in the work force long enough and you’re not the favorite child in the family-run business, then I’ll bet you’ve experienced at least one boss you didn’t like. He or she may have been annoying, unqualified, and even deceitful. You may have become frustrated enough with that boss to call them toxic. But were they really a toxic boss? Words matter.
Toxic people exist–there’s no denying that–and faaaar too many of them are permitted positions of leadership. But ‘toxic boss’ is a damning label that must be properly understood before we hurl it at or about someone. That’s why an HBR.org article by Colin D. Ellis titled 10 Signs of a Toxic Boss – and How to Protect Yourself caught my attention.
Colin is a culture change expert and author. His latest book is Detox Your Culture: Deliver Results, Retain Staff, and Strengthen Your Organization’s Reputation. What particularly intrigued me about Colin’s article is that his checklist–the 10 signs–are an insightful gauge to determine whether someone in leadership is toxic.
Leadership, no matter the position but especially toward the top—whether selected for the C-suite or elected to public office—is not just about strategy and execution, it’s about trust, responsibility, and moral clarity. More specifically, it’s about the underlying human qualities of trustworthiness, intelligent decision making, and mutuality. Yet increasingly, we see leaders undermine the very people and organizations they’re responsible for protecting.
What separates a tough-but-effective leader from a toxic one? Great question! That’s where Colin’s article proves so helpful. By providing a solid checklist of traits possessed by toxic leaders, Colin makes it easy for any of us to put a mirror to a boss or politician’s behavior for an objective view of whether that person is toxic.
How ugly does it become for a team or corporation when a boss possesses many or even most of these traits? It varies, but the corporate world is heavily littered with stories that end with some variation of the phrase 'crash and burn.' The situation is the same for citizens and nations when an elected politician possesses many or most of these traits. The impact of a toxic leader is scalable because toxic leaders might lead the largest of organizations or nations. What might that mean for commercial systems like global trade and capitalism itself? The likelihood of the same result is very real—crash and burn.
Do this: run down Colin's list with someone in mind. Take a minute to think of a boss or politician you suspect qualifies as toxic. Or mentally construct a composite avatar. Compare his or her actions against the traits listed below. How does he or she stack up? The more similarities, the greater the likelihood of the inevitable crash and burn. Although, as Colin mentions in his article, “[I]t only takes one of these traits to generate toxicity in the workplace, and their impact can be felt across teams and the organization,” to which I add, "and a nation."
Image Credit: Safetysign.com
The 10 Signs
1. Lack of Self-Awareness
Toxic bosses and politicians often have no meaningful insight into how their words and actions affect others. They don’t recognize their flaws, overrate their contributions, and become defensive when confronted with reality. Rather than reflect, they react. Rather than learn, they double down. This blindness leads to inconsistent behavior and to overconfidence in their own knowledge, assuming their perspective is always superior.
2. Lack of Empathy
Equally corrosive is a lack of empathy. Toxic leaders don’t just fail to listen—they fundamentally don’t care. They ignore emotional signals, downplay stress and exhaustion, and treat people as means to an end. This shows up in belittling or demoralizing behavior and in setting unreasonable expectations with no regard for workload or human limits.
3. Excessive Self-Interest
Many toxic leaders are driven not by the mission or the team, but by their own advancement. Self-interest becomes the only compass. Credit is hoarded. Blame is outsourced. Loyalty is rewarded—not for integrity, but for obedience. In the workplace, it looks like leaders who climb by stepping on others. In politics, this manifests as policy driven by optics rather than values.
4. Exploitation of Power Dynamics
Toxic leaders use their position as leverage rather than responsibility. They manipulate hierarchies, silence dissent, and surround themselves with yes-people. They micromanage and blame others when things go wrong but take sole credit when they go right. They exploit their authority to maintain dominance and avoid scrutiny.
5. Inconsistent Behavior
One of the most disorienting traits of a toxic leader is inconsistency. Today’s priority is tomorrow’s afterthought. Promises made are casually broken. Standards are applied unevenly—one set for favorites, another for everyone else. This instability keeps people on edge, stifles creativity and initiative, and trains teams or citizens to stop relying on leadership altogether.
Image Credit: American Philosophical Association
6. Micromanagement
Toxic leaders don’t trust the people around them. Every decision funnels back to them—not because it must, but because they need control to feel important or secure. Micromanagement is a symptom of deeper insecurity. Teams under micromanagement stop thinking independently. In politics, thismanifests as power hoarding.
7. Unreasonable Expectations
There’s a difference between challenging people to grow and setting them up to fail. Toxic leaders don’t know or care about the difference. They move goalposts, ignore limits, and treat exhaustion as weakness. In the corporation this leads to burnout, errors, and high turnover. In governance, it results in policies that ignore on-the-ground realities, placing unrealistic burdens on public servants, communities, and long-standing institutions.
8. Belittling and Demoralizing
Toxic leaders diminish, mock, and seek to humiliate others. They seek to make people feel small. Whether done in private or in public, these actions drain confidence and discourage contribution. Innovation stalls. In a political context, this behavior can alienate constituents or bully opponents, replacing dialogue with degradation.
9. Blaming Others
Toxic leaders don't seem capable of admitting fault. When things go wrong, they immediately look for someone else to blame. Subordinates, previous administrations, the media, “the team”—anyone but themselves. In workplaces, employees become more focused on avoiding blame than doing good work. In politics, the blame game undermines institutional integrity and public trust.
10. Overconfidence in Their Knowledge
Perhaps one of the most subtle but damaging traits of a toxic leader is their intellectual arrogance. Toxic leaders often believe they know more than they do—and reject expert input. They assume their instincts are superior to data, and their experiences universal. This creates blind spots, slows progress, and leads to poor decisions. In business, it leads to failed strategies. In government, it results in misguided policies and disastrous miscalculations.
How did your boss, politician or avatar fair? Objectively toxic or not?
Image Credit: Europosters.eu
Each of these traits is damaging on its own. Together, they form a pattern of leadership that prioritizes ego over service, power over responsibility, and fear over trust. The impact is systemic—whether it’s a demoralized team or a disillusioned electorate.
But identifying toxic leadership is only the first step. The next is refusing to normalize it.
Whether you’re an employee, a voter, or a fellow leader, you have influence. Speak truth. Set boundaries. Support those who lead with transparency and care. Toxic leadership breaks both people and systems, and the only way to stop it is to openly reject and bravely act against toxic leadership. Like the child in the fairy tale, bravely call it as you see it: "The emperor has no clothes!"
The consequences of allowing toxic leadership are far-reaching. In the workplace, toxic leaders destroy morale, create turnover, burn resources, and waste talent. In politics, they erode public trust, weaken institutions, alienate allies, and polarize entire populations. The systems they inhabit become less about shared purpose and more about individual preservation.
These systems include well-run capitalism, which in terms of behavioral economics depends on trust, mutuality, and stability. Capitalism, like any other system, breaks under toxic leaders. Want to help fix capitalism? Want to help fix the American Dream? Begin by rejecting toxic bosses and toxic politicians.
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