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The Wealth Gap and Social Unrest

March 11, 2013

The Wealth Gap and Social Unrest

By Stephen Gibler

Since the Occupy Wall Street movement faded out of mainstream press reporting in 2012, the conversation about the US wealth gap has moved to the back as conversations regarding sequester cuts, drone strikes on US Citizens, and North Korean saber rattling have retaken the spotlight. Not surprising as the issue is exceedingly complex and the the Republicans have been successful in getting across their message of this being effectively wealth redistribution.

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However, what opponents of the wealth redistribution narrative have failed to do is effectively show how that wealth gap could negatively effect a country. And most importantly, how that wealth gap could lead to destructive consequences nationally.

For comparison’s sake, we need to look at other countries and their societies we would deem as free or not free and look at their income inequality levels. One prime example is China which is constantly decried as a violator of human rights and an oppressive communist state. Let’s look at China’s wealth gap.

Currently China’s income gap is actually pretty similar to ours.

Here is the Gini Coefficient that measures wealth gaps.

Modern USA Gini Coefficient Levels

In a Gini Coefficient scale, 0 is everyone has equal wealth, and 1 is one person holds all the wealth and history has shown both systems don’t work.

We are living in one of the most peaceful times in human history, a major reason being we are at our lowest levels of income disparity and wealth disparity every. Unfortunately the pendulum is swinging backward and especially has been in the USA since the 1970s.

Wealth Inequality in the United States Wikipedia

Back to the Gini CoEfficient. Social unrest in America is nothing new and has been a constant element because of the free republic nature of the country. However there are correlations between income inequality and social unrest.

However this is a statistical correlation between conflict and income gap. Anything .4 or over leads to social unrest. Look throughout history and countries that become dysfunctional are over the .4 this manifests itself as civil unrest, revolution, mass slaughter of resident populations, or war.

China’s CoEfficient is .474.

US China Income Gap

America’s CoEfficient is .49.

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We are currently primed for major social unrest. Movements like Occupy Wall Street and the Tea Party are representations of low level social unrest that is in direct response to this. They actually much closer in relation when you think of them as responses to a high level of power and influence vs. the people. The Tea Party targets an extremely powerful government while Occupy Wallstreet targets the corporate influence in that government. Essentially, they both are right, just half right. The relationship between the government and corporations, which have historically been a check on each other, have now become a symbiotic relationship.

Glass-Stegall Act breaking up big banks

The era of the government checking corporate influence is waning and now acts like Dodd-Frank Act are showing how powerful corporate lobbies have become in their influence of legislation and how they’re able to block serious regulation.

Daily Show explains Dodd-FrankAct

Add in the bank bailouts, lack of arrests due to the financial collapse, the ever increasing war on terror, and the amount of Americans feeling economic relative pressure, the amount of Americans feeling skeptical of the government is at an all-time high.

US Government at historic negativity levels

Between these factors of people’s mistrust on the government and industry to solve the problem, then they will turn to a third option to force them to fix the system. Themselves.

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