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Social Unrest: The Boiling-Over Point

Understand the coming threat & position wisely in advance
Friday, January 26, 2018, 11:04 PM
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Executive Summary

  • Understanding the anatomy of the "Winner Take Most" economy we now live
  • How technology is making labor obsolete faster than we can imagine
  • Our current models for driving social change are broken
  • The approaching future of Disunity & Disruption

If you have not yet read Part 1: The Pie Is Shrinking So Much The 99% Are Beginning To Starve, available free to all readers, please click here to read it first.

In Part 1, we reviewed the shift from the expanding economic pie of the second half of the 20th century that enabled a parallel expansion in universal rights and entitlements. 

But here in the 21st century, the pie is shrinking and the social movements that reduced asymmetries of wealth and power in the 20th century are no longer effective. 

In Part 2, we’ll go deeper into the structural changes of the economy, and explore why social movements have slipped into ineffectual symbolic gestures that fuel fragmentation and frustration -- and why that will lead to a dangerous boiling over of the 99% against the elites controlling the system.

The “Winner Take Most” Economy

An economy characterized by soaring wealth and income inequality is clearly a “winner take most” economy: Richest 1% Made 82% Of Global Wealth In 2017

Peak Prosperity has covered the structural changes that have created the WTM economy at length for many years, so we can quickly summarize the key dynamics:

Cartels, state-corporate governance. Structurally, large banks and corporations have aggregated wealth and political power to the degree that they can enforce cartels and quasi-monopolies with a combination of market heft and regulatory capture (a complicit state enforces monopoly under the guise of consumer protection or other cover). The owners/managers of the cartels skim enormous profits while providing poor-quality products and services to consumers who have little choice in a rigged market.

Systemic incentives favor speculation, debt and leverage: those closest to the cheap-credit spigots (corporations, banks and financiers) can outbid everyone else to buy up the productive assets of the economy—assets that generate income and capital gains. These perverse incentives fuel speculative asset bubbles, misallocation of national wealth and malinvestment in marginal projects that are originated solely to reap short-term profit by any means available, which in a rigged system includes fraud, embezzlement, misrepresentation of risk, etc.

This dependence on rising speculation, debt, leverage and opaque gaming of the system is financialization.  Where the entire financial sector once represented 5% of the economy, now it is over 20% of the economy once we include financialization that’s hidden inside firms such as Apple, GE, etc.

Together, these form what I call the Plantation Economy, an asymmetric structure in which(...)

 

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