Fix This or Nothing Else Matters -- Charles Hugh Smith

Charles Hugh SmithCharles Hugh Smith -- Of Two Minds

Dec. 3, 2024

The top 10 percent are the dog sipping a drink as the cafe burns down, saying "This is fine."

What's the one thing we need to fix or nothing else matters? There are plenty of potential candidates: immigration, healthcare, wokeism, hot war in Europe, inflation, draining The Swamp, etc.

Human history offers a definitive answer, and it's none of these issues. The answer is wealth inequality. Historian Peter Turchin has focused on the tedious task of assembling data (as opposed to opinions, ideological positions and theories) on the crises and collapses of previous nations and empires. The keystone dynamic is soaring wealth inequality, which is shorthand for power inequality, as wealth generates power, income inequality, as wealth generates income, and health inequality, as wealth buys the best healthcare.

Turchin has written a number of books on the topic of social discord and collapse, but his recent article succinctly summarizes his findings: The deep historical forces that explain Trump's win: "We're in a good position to identify just those impersonal social forces that foment unrest and fragmentation, and we've found three common factors: popular immiseration, elite overproduction and state breakdown."

All three are the consequences of exploding wealth inequality. As wealth -- which can be understood as claims on future time, energy and productive assets--is concentrated in fewer hands, the prosperity of the bottom 90 percent decays as costs rise and wages stagnate (i.e. immiseration), the economy no longer produces enough highly paid slots for the ever-increasing production of highly educated, high-expectations professionals, and since extreme concentrations of wealth corrupt the state, the state breaks down as bread and circuses no longer mask the gap between the top 1 percent (what Turchin calls "the proverbial 1 percent") and the top 10 percent, "a highly educated or 'credentialed' class of professionals."

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