Why income inequality is killing capitalism
The economy seems to be on everyone’s mind these days. It has become a bit of a notion really; an idea that something is rotten in the world of capitalism. Unemployment is on the rise and while an increasing number of households are struggling to pay their loans some mysterious group of people called “bankers” are figuring out what to do with their million dollar bonuses. Aside from not being “fair” whatsoever, it is becoming evident that this really is an important reason as to why the middle class – the backbone of the economy - is shrinking towards nothing.
“I predict a riot”
In 2009 the news reported from all over the world that the ancient city of Athens had become a battlefield. Riot police clashed with protesters demanding an end to government corruption and rising taxes. Throughout the beginning of the new decade this has manifested itself as a European problem, not just limited to the south. Sociologists tell us this has been building up for some time, the root issue being a harsher climate in most western societies since the 1970’s. Although, one might argue that these protests are a reaction to specific events, such as foreign governments and the IMF dictating public cutbacks, rather than a widespread frustration. Well, that may indeed be a triggering factor, but saying so disregards the seemingly random acts of violence that spawns all over Europe regardless of major public cutback reforms. The 2011 London riots had no political motive but were instead made up by frustrated youths from the poor districts. Similar events occurred in France, Spain and even the usually quiet Portugal. They represent a structural imbalance that manifests itself as the poor getting poorer and the rich getting richer. Such an imbalance would make society more unstable, violent and ultimately poorer. Thus, the problem is of a deeper structural character.
Too big to fail
Before going any further I’d like to explain the...
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