Hundreds of societies have been in crises like ours. An expert explains how they got out.
Anti-establishment parties and politicians are surging in Western Europe and Japan. In the United States, the MAGA movement, led by President Donald Trump, has seized power. Political violence is rising and by several measures — violent riots, anti-government demonstrations — the US is now experiencing its highest level of social turbulence and political conflict in the last 100 years. What lies ahead? How do we navigate our societies through the turbulent waters without sliding into a bloody civil war?
Our current predicament is not unprecedented. We can learn from how past societies survived through, and ended, their crisis periods.
The “wealth pump”
The collapse of ancient empires, the revolutions that convulsed early modern Europe, or the tensions tearing apart today’s democracies are often treated as products of unique historical circumstances. But my analysis of more than a hundred past crises spanning the last two millennia shows that these outbreaks of societal instability are driven by a mechanism that operates with surprising regularity across different historical eras and places: the wealth pump. The term describes a set of conditions — economic and political — that transfer wealth from the broad base of the population to the elite, a small proportion of people who concentrate power in their hands.
The wealth pump consists of various means by which the fruits of economic growth are, instead of being shared equitably, siphoned upward the social ladder. In the past, this was from peasants to landlords; today, from workers to business owners and corporate executives. First, economic inequality rises. Then political inequality follows, as the wealthy convert their riches into influence. This development erodes democratic institutions, making it harder for the non-elite majority to defend their interests through formal politics. Eventually, systemic stability is threatened.
Undermining society
The wealth pump undermines the stability of societies in three ways.
1) It causes growing popular discontent.
The obvious effect of the wealth pump is that it enriches the upper strata and increases their numbers via upward economic mobility — for example, enabling CEOs of large companies to enter the ranks of uber-wealthy. However, this happens at the expense of the majority. To understand this, consider the relative wage, defined as the wage earned by typical workers (technically, the median wage) relative to the GDP per capita. When the relative wage declines, non-elite workers receive less and less of the fruits of economic growth. This decline in relative wages means that while wages stagnate, the costs of housing, education, and healthcare soar.
In the United States, for example, the relative wage began falling from the 1970s onward. Even as the economy grew, most Americans fell behind. This results in anger and increased mass-mobilization potential.
2) The wealth pump creates too many wealthy elites — more than there are high-power positions.
This is most clear when we consider that some top wealth holders are interested in translating their economic power into political office (think Trump, but also Michael Bloomberg, Steve Forbes, and so on). © Vox
