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The Root Cause: A Deeper Truth

Now that Trumpcare has collapsed, at least temporarily, under the weight of its own bullshit, we need to think ever more deeply about the reality that we face. Rising inequality is not an accident, neither is the increase in the despair and mortality of whites with less than a high school education, or bias in our justice and law enforcement systems, our extraordinary incarceration rates, the student loan debt crisis, or the stagnation in wages for the middle class. The key to each and every one of these great socioeconomic dysfunctions is a singular issue: the size of the ruling coalition.

Ruling Coalitions: Large and Small

Americans like to believe that they live in a land of equality, justice, and freedom. Those are nice ideals, but they are very far from reality. There is a very large discrepancy between perception and reality when it comes to economics. Much of this discrepancy is the result of invisible differences in wealth, the holding of assets that are not tangible in the common sense. Holdings of stocks, bonds, financial assets of various kinds are not readily apparent in daily life. The accumulation of those assets may be completely invisible to most people, many of whom are unaware that such things even exist. Asset bubbles and sophisticated credit default swaps are part of a world few citizens venture into or have expertise. Yet those who inhabit the organizations and institutions where those financial transactions occur make decisions that have profound consequences for the rest of society, as we saw vividly in 2008. Many were hurt, but a few were not. That is not an accidental difference.

Small groups of people have personal access to the central decision-makers in our society. In general, when there are very small coalitions of people ruling, they tend to be part of highly extractive institutions, where a few people benefit at the expense or through the use of many other people. Examples include mining, oil and gas, and in the past through slavery and plantation operations. These patters are well documented in The Dictator's Handbook: Why Bad Behavior is Almost Always Good Politics and Why Nations Fail: The Origins of Power, Prosperity, and Poverty. There is little doubt that, in the broad course of human history, larger ruling coalitions, representing larger groups of people, produce better opportunities and more prosperous societies.

Whenever the size of the ruling coalition shrinks, fewer people are well off. When it shrinks to the size of one family, as it does in most autocracies, even more people suffer, as they do in North Korea and in many of the dictatorships we have witnessed in Africa, the Middle East, and Latin America. That is a truth that needs to be reckoned with in our own political future.  For more information, here are some great resources, see below: