How do we fix that? Perhaps it can't be done democratically, and you just need someone to come into a high position of power who is willing to be dramatic and disruptive?

One way to address it: change very slowly. You can strangle the bad incentives by reducing their perceived utility by introducing alternatives. The bad incentive exists because it's trying to do something. Ideally, you set up a companion incentive that gets the system a little more in the direction everyone wants, you systemically allow folks to effectively "choose their incentive", and eventually you phase out the old incentive. Problems with this are: it's glacial, and it doesn't solve everything instantaneously. Folks don't like either of those things, so you probably need to use other tools of political change to make those things more palatable.

In general, it's a lot of work, it's all in the details, and it takes forever. So lots of folks will fall back on the "why not just give the small dictator(s) all the power?"

Thanks for the thoughtful reply. It must be sad for the people who dedicate their lives to slow-change to see everything get steamrolled by a quick-fix-salesman dictator. Do you have faith in this kind of approach or do you think it's more of a "better than nothing" longshot? Maybe it's the kind of thing where it can't really be done for big, politically "hot" issues, but for other, niche problems that are less visible to the news-watching layman, it's still an effective way of making change?

Generally it isn't done because the people in power benefit from the status quo.

To fix it, you need collective action. And now you have a collective action problem: https://en.wikipedia.org/wiki/Collective_action_problem