The Pie Is Shrinking so Much the 99% Are Beginning to Starve

Social movements arise to solve problems of inequality, injustice, exploitation and oppression. In other words, they are solutions to society-wide problems plaguing the many but not the few (i.e. the elites at the top of the wealth-power pyramid).

The basic assumption of social movements is that Utopia is within reach, if only the sources of the problems can be identified and remedied.  Since inequality, injustice, exploitation and oppression arise from the asymmetry of power between the few (the financial and political elites) and the many, the solution is a reduction of the asymmetry; that is a tectonic realignment of the social structure that shifts some power—economic and/or political—from the few to the many.

In some instances, the power asymmetry is between ethnic or gender classes, or economic classes (for example, labor and the owners of capital).

Social movements are characterized by profound conflict because the beneficiaries of the power asymmetry resist the demands for a fairer share of the power and privileges, while those who’ve held the short end of the stick have tired of the asymmetry and refuse to back down.

Two dynamics assist a social, political and economic resolution that transfers power from those with too much power to those with too little power: 1) the engines of the economy have shifted productive capacity definitively in favor of those demanding their fair share of power, and 2) the elites recognize that their resistance to power-sharing invites a less predictable and thus far more dangerous open conflict with forces that have much less to lose and much more to gain.

In other words, ceding 40% of their wealth-power still conserves 60%, while stubborn resistance might trigger a revolution that takes 100% of their wealth-power.

History provides numerous examples of these dynamics.  Once the primary sources of wealth-generation shifted from elite feudal landowners to merchants and industrialists, the wealth (and thus the political power) of the landed elites declined. As the industrialists hired vast numbers of laborers drawn from small farms and workshops, this mass industrialized labor became the source of the wealth generation; after decades of conflict, this labor class gained a significant share of the wealth and political power.

The civil rights and women’s liberation movements realigned the political and economic power of minorities and females more in line with their productive output, reducing the asymmetries of ethnic and gender privileges.

In broad-brush, progressive social movements seek to broaden opportunities and level the playing field by reducing the asymmetric privileges of dominant classes defined by power and privilege.  The core mechanism of this transition is the recognition and granting of universal human rights: the right to vote, the right to equal opportunity, and rights to economic security, i.e. entitlements that are extended universally to all citizens for education, healthcare, old-age pensions and income security.

Again in broad-brush, these movements have largely been categorized as politically Left, though many institutions deemed conservative (for example, various churches) have often provided bedrock support for progressive movements.

Social movements which seek to limit the excesses of state power tend to be categorized as conservative or politically Right, as they seek to realign the asymmetry of power held by the state in favor of the individual, family and the traditional social order.

The Expanding Pie Fueled Expanding Entitlements

Writer Ugo Bardi recently drew another distinction between Left and Right social movements: “Traditionally, the Left has emphasized rights while the Right has emphasized duties.

As rights manifested as economic entitlements rather than political (civil liberty) entitlements, rights accrue economic costs. As Bardi observes: “Having rights is nicer than having duties, but the problem is that human rights have a cost and that this cost was paid, so far, by fossil fuels. Now that fossil fuels are on their way out, who's going to pay?”

I would argue that the cost was also paid by higher productivity enabled by the technological, financial and social innovations of the Third Industrial Revolution, roughly speaking the interconnected advances of the second half of the 20th century.

These advances can be characterized as expanding the economic pie; that is, generating more energy, credit, technological tools, opportunities, security and capital (which includes financial, infrastructural, intellectual and social capital) for all to share in a socio-political-financial allocation broad enough to make everyone feel like they were making some forward progress.

This long-term, secular expansion of the pie naturally generated more demands for additional entitlements and rights, as the economy could clearly support the extra costs of allocating additional wealth and resources to the many.  From the point of view of the few (the elites), their own wealth continued expanding, so there was little resistance to expanding retirement, education and healthcare entitlements.

But in the 21st century, the expansion of the pie stagnated, and for many, it reversed. Adjusted for real-world inflation many households have seen their net incomes and wealth decline in the past decade.

Despite the endless media rah-rah about “growth” and “recovery,” it is self-evident to anyone who bothers to look beneath the surface of this facile PR that the pie is now shrinking. This dynamic is increasing inequality rather than reducing it.

The Shrinking Pie And Stagnant Productivity

It is a truism of economics that widespread increases in productivity are required to generate equally widespread increases in income and capital, i.e. productive wealth. To the consternation of many, productivity has stagnated since 2010; no wonder household income for all but the upper crust has gone nowhere.

If we glance at a chart of productivity, we see a strong correlation with speculative investment bubbles (the dot-com and housing bubbles 1995-2005) and speculative spikes fueled by central bank monetary stimulus (2009-10).  Absent bubbles and monumental excesses of central bank stimulus, productivity quickly sinks to its secular trend line: downwards.

This next chart depicts the long-term trend line of productivity through all four industrial revolutions. Note the decline concurrent with the 4th Industrial Revolution (mobile telephony, the Internet, AI, robotics, peer-to-peer networks, etc.) and the depletion of cheap-to-access-and-refine oil:

The unwelcome reality is that the economy is changing in fundamental ways that cannot be reversed with policy tweaks, protests or wishful thinking.

Consider the percentage of the gross domestic product (GDP) that goes to employee compensation (wages and salaried). Labor’s share of the GDP has been in a downtrend since 1970, which not coincidentally was the peak of secular productivity:

In this below chart of the distribution of wealth in the U.S., we find the same correlation to the downtrends in productivity and labor’s share of the economy.  The bottom 90% of households' (the many) share of the wealth pie topped out in the early 1980s and has declined precipitously since, while the wealth of the top 0.1% (the few) has more than tripled since the late 1970s:

This next chart depicts the remarkable (and recent) spike income growth the few have recently enjoyed, at the expense of everyone else:

The increase in wealth and income inequality and the decline of productivity and labor’s share of GDP are the result of structural changes in the economy, changes with far-reaching consequences.

While it’s appealing to identify policies endorsed by self-serving insiders and elites as the source of these changes, that is far from the whole story. Much of this growing asymmetry stems from profound changes in the global economy that depreciate labor (as conventional labor is no longer scarce) and increase the gains of the top few in a “winner take most” allocation that benefits speculation, leverage and new ways of organizing labor and capital that reward the organizers far more than the users/participants.

In this new era of a steadily shrinking pie, the sources of inequality and related social problems have also shifted.  As a result, the social movements that were effective in the past are no longer effective today. Attempts to address rising inequality with the old tools are fueling frustration rather than actual solutions.

In Part 2 — Social Unrest: The Boiling-Over Point, we examine why our existing models for social change 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.

When that happens (and it seems inevitable at our current trajectory), the rending of our social fabric will happen stunningly fast. The ensuing social disunity and disruption will be of the sort many alive today have never seen.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

One chapter of ISIS has ended, but another may be starting

AHMAD AL-RUBAYE/AFP/Getty Images

For the most part, ISIS has fallen in Syria and Iraq. But before we celebrate the demise of this awful terrorist group, before we let our guard down, we should zoom out a bit, because ISIS is spreading. ISIS has largely just scattered out of the region as if someone turned on the kitchen lights and they scrambled.

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The Wall Street Journal spoke with Rohan Gunaratna, head of the International Center for Political Violence and Terrorism Research at the Nanyang University in Singapore. “Although Islamic State's ideology has suffered, it still has a huge potential," he told them. “Islamic State has entered a phase of global expansion, very much the same way al Qaeda extended globally in late 2001."

ISIS has spread into West Africa, and throughout much of Southeast Asia, and, as is typical of ISIS, they have done it violently, with a sick venom.

The world is their potential rubble, and their fight is endless.

Again, from the Wall Street Journal: “One chapter of ISIS has finished and another is beginning," said Hassan Hassan, a specialist on Islamic State at the Tahrir Institute for Middle East Policy in Washington. “Their resurgence is coming sooner than expected."

The world is their potential rubble, and their fight is endless.

'The Handmaid's Tale' got it right, just with the wrong religion

Alberto E. Rodriguez/Getty Images

Just in case The Handmaid's Tale's heavy-handed message wasn't already heavy-handed enough, a recent episode made it clear there's always room for further hysteria. Particularly, in relation to depictions of a “patriarchal society" run by Christian doctrine and determined by men — oh those dastardly men.

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The show appropriates Margaret Atwood of the same name, depicting a totalitarian society led by Christian doctrine in which women's bodies are controlled, and they have no rights. The story sounds familiar, but not in the same way Atwood and the show's creators have so smugly assumed.

Just as tone-deaf as 4th wave feminism itself, and tone-deaf in all the exact same places. Most notably, the show's heavy-handed indignation toward Christianity. Toward the patriarchy. Toward conservatives and traditional values. And just like 4th wave feminism, the show completely overlooks the irony at play. Because there is a part of the world where women and children are being raped and mutilated. In fact, in this very real place, the women or girls are often imprisoned, even executed, for being raped, and they are mutilated in unspeakable ways.

Theirs is a cruel, bloody, colorless life.

There is a place, a very real place, where women are forced to cover their entire bodies with giant tarp-like blankets, which is all the more brutal given the endless heat of this place. There is a place where women literally have one-third of the rights of men, a place where women are legally, socially and culturally worth less than men.

They cannot drive cars. They cannot be outside alone. They cannot divorce, they cannot even choose who they marry and often, they are forcibly married at a young age.

They are raped. A lot. Theirs is a cruel, bloody, colorless life. This is the life of tens, perhaps hundreds of millions of women. And, I'll tell you, their religion isn't Christianity.

Science did it again. It only took 270 million years, but this week, scientists finally solved the mystery that has kept the world up at night. We finally know where octopuses come from: outer space. That explains why they look like the aliens in just about every alien movie ever made.

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It turns out octopuses were aliens that evolved on another planet. Scientists haven't determined which one yet, but they've definitely narrowed it down to one of the planets in one of the galaxies. Hundreds of millions of years ago (give or take a hundred), these evolved octopus aliens arrived on Earth in the form of cryopreserved eggs. Now, this part is just speculation, but it's possible their alien planet was on the verge of destruction, so Mom and Dad Octopus self-sacrificially placed Junior in one of these cryopreserved eggs and blasted him off the planet to save their kind.

This alien-octopus research, co-authored by a group of 33 scientists, was published in the Progress in Biophysics and Molecular Biology journal. I'm sure you keep that on your nightstand like I do.

Anyway, these scientists say octopuses evolved very rapidly over 270 million years. Which sounds slow, but in evolutionary terms, 270 million years is like light speed. And the only explanation for their breakneck evolution is that they're aliens. The report says, “The genome of the Octopus shows a staggering level of complexity with 33,000 protein-coding genes — more than is present in Homo sapiens."

Lucky for us, they landed in the water. Otherwise, we might be octopus pets.

They mention that the octopus' large brain, sophisticated nervous system, camera-like eyes, flexible bodies and ability to change color and shape all point to its alien nature. Octopuses developed those capabilities rather suddenly in evolution, whereas we're still trying to figure out the TV remote.

These biological enhancements are so far ahead of regular evolution that the octopuses must have either time-traveled from the future, or “more realistically" according to scientists, crash-landed on earth in those cryopreserved egg thingies. The report says the eggs arrived here in “icy bolides." I had to look up what a “bolide" is, and turns out it's a fancy word for a meteor.

So, to recap: a long time ago, in a galaxy far, far away, an alien race of octopuses packed their sperm-bank samples in some meteors and shot them toward Earth. Lucky for us, they landed in the water. Otherwise, we might be octopus pets.

President Trump's approval rating is rising, and Democrats — hilariously — can't seem to figure out what's going on. A few months ago Democrats enjoyed a sixteen point lead over Republicans, but now — according to CNN's recent national survey — that lead is down to just THREE points. National data from Reuters shows it as being even worse.

The Democratic advantage moving towards the halfway mark into 2018 shows that Republicans are only ONE point behind. The president's public approval rating is rising, and Democrats are nervously looking at each other like… “umm guys, what are we doing wrong here?"

I'm going to give Chuck Schumer and Nancy Pelosi a little hint. We know that the Left has enjoyed a “special relationship" with the media, but they might want to have a sit down with their propaganda machine. The mainstream media is completely out of control, and Americans are sick of it. We're DONE with the media.

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Look what has been going on just this week. The president called MS-13 gang members animals, but that's not the story the media jumped on. They thought it was more clickable to say that Trump was calling all immigrants animals instead. In the Middle East, the media rushed to vilify Israel instead of Hamas. They chose to defend a terror organization rather than one of our oldest allies.

Think about that. The media is so anti-Trump that they've chosen a violent street gang AND A GLOBAL TERROR ORGANIZATION as their torch-bearing heroes. Come on, Democrats. Are you seriously baffled why the American people are turning their backs on you?

Still not enough evidence? Here's the New York Times just yesterday. Charles Blow wrote a piece called "A Blue Wave of Moral Restoration" where he tried to make the case that the president and Republicans were the enemy, but — fear not — Democrat morality was here to save the day.

Here are some of these cases Blow tries to make for why Trump is unfit to be President:

No person who treats women the way Trump does and brags on tape about sexually assaulting them should be president.

Ok, fine. You can make that argument if you want to, but why weren't you making this same argument for Bill Clinton? Never mind, I actually know the reason. Because you were too busy trying to bury the Juanita Broaddrick story.

Let's move on:

No person who has demonstrated himself to be a pathological liar should be president.

Do the words, “You can keep your doctor" mean anything to the New York Times or Charles Blow? I might have saved the best for last:

No person enveloped by a cloud of corruption should be president.

I can only think of three words for a response to this: Hillary Frigging Clinton.

Try displaying a little consistency.

If the media really wants Donald Trump gone and the Democrats to take over, they might want to try displaying a little consistency. But hey, maybe that's just too much to ask.

How about starting with not glorifying terrorist organizations and murderous street gangs. Could we at least begin there?

If not… good luck in the midterms.