Most political unrest has one big root cause: soaring inequality

Michael Massing
Photograph: Rodrigo Garrido/Reuters

The popular protests that erupted in 2019 and have continued to rumble – from France and Spain in Europe to Hong Kong and India in Asia; from Chile, Colombia and Bolivia in Latin America to Lebanon, Iran and Iraq in the Middle East – have perplexed analysts. Because they have been so far-flung and have lacked an iconic moment like the fall of the Berlin Wall, the common thread hasn’t been obvious. But there is one: rage at being left behind. In each instance, the match may differ, but the kindling has (in most cases) been furnished by the gross inequality produced by global capitalism.

Consider Lebanon. The demonstrations that erupted there in October were triggered by the government’s plan to tax calls made through WhatsApp and other internet services, but they quickly mushroomed into a broader protest against high unemployment, sectarian rule, corruption, and the government’s failure to provide basic services like electricity and sanitation.

According to the World Inequality Database, the top 1% of Lebanon’s population receives about 25% of the nation’s income. Six Lebanese billionaires have a combined personal wealth of about $11bn, according to Forbes. Three of those billionaires are the sons of Rafik Hariri, who made a fortune in construction and twice served as Lebanon’s prime minister before being assassinated in 2005. (A fourth son, Saad Hariri, was prime minister until his recent resignation amid reports that he had given more than $16m to a bikini model he had met while vacationing in the Seychelles.) Protesters maintained that the pampered elite, rather than strapped working people, should foot the bill for the country’s economic problems.

The match may differ, but the kindling has (in most cases) been furnished by the gross inequality produced by global capitalism

In Chile, an increase in subway fares catalyzed protest. The popular discontent caught many observers by surprise, since Chile has experienced years of steady growth and has a reputation for good governance. In fact Chile, with a per capita income of $15,800, is a member of the Organization for Economic Cooperation and Development for prosperous nations. Of the OECD’s 36 members, however, Chile has one of the highest levels of inequality. Its economy is dominated by a group of powerful oligarchs, among them its current president, Sebastián Piñera, who is worth an estimated $2.8bn (amassed largely in the credit card business). Despite their country’s wealth, working Chileans have had to grapple with rising utility costs, stagnant wages and paltry pensions. The protests have registered their fury.

In Hong Kong, months of demonstrations have had one overriding goal: resisting China’s encroachments on the city’s autonomy and democratic institutions. That the protests have become so virulent and lasted so long, however, reflects deep exasperation with the region’s sky-high cost of living. By some accounts, Hong Kong is the world’s most unaffordable city, with rents higher than London and New York for apartments half the size. It may also be the world’s most unequal city: its 93 or so billionaires have a combined worth of more than $300bn while nearly one in five residents lives in poverty.

Worldwide, the numbers are stark. As calculated by Oxfam, 26 people have the same amount of wealth as the 3.8 billion people in the world’s bottom half. In the United States, the three richest people have the same amount of wealth as the bottom 160 million.

And the political fallout continues to spread. Not only the current round of street protests but also such recent upheavals as Brexit, Trump, the gilets jaunes in France, and rightwing populist governments in Hungary, Poland and Italy all have roots in the financial crash that was set off by the fall of Lehman Brothers in September 2008 and followed by the world’s worst economic contraction since 1929.

In the US alone, the great recession erased about $8tn in household stock-market wealth and $6tn in home value. From 2003 to 2013, inflation-adjusted net wealth for a typical household fell 36%, from $87,992 to $56,335, while the net worth of wealthy households rose by 14%. Workers without college degrees and low-income Americans were especially hard hit.

In addition to causing such widespread deprivation, the 2008 crash stripped the sheen off global capitalism. Just as the Iraq war undermined the authority of the US foreign policy establishment, so did the financial crisis discredit the bankers, asset managers, ratings agencies, and regulators responsible for running the world economy. Compounding that damage was the government’s decision to bail out many of the same institutions – Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase and Wells Fargo – that had caused the crisis.

In the United States, the three richest people have the same amount of wealth as the bottom 160 million

In a recent New York Times article about Vladimir Putin’s growing worldwide stature, the former Kremlin adviser Gleb Pavlovsky sought to explain why Putin turned away from his earlier aspirations to join the western family of nations and toward his current brand of authoritarian nationalism. The “decisive threshold” was the 2008 financial meltdown, Pavlovsky said. Before it, Putin saw America as running the world economy. “Suddenly it turned out: no, they are not running anything.” At that moment “all the old norms vanished” and Russia set about creating its own norms.

Many members of the liberal establishment in America have failed to come to terms with the waning appeal of the free-market model. They dismiss populism as a sort of exogenous disease to be cured by appeals to reason and facts rather than recognize it as a darkly symptomatic response to a system that has failed so spectacularly to meet the basic needs of so many.

In a recent Financial Times essay reflecting on the coming decade, Steven Pinker hailed the dramatic recent gains made by humanity – the advances in science and medicine, the spread of democracy and human rights, the embrace of free trade and environmental regulation. He waved away authoritarian populism as a passing phenomenon, since its support “is greatest among rural, less-educated, ethnic-majority and older cohorts, all in demographic decline”.

In other words, the marginalized will die out, so there’s no need to worry about them. Pinker made no mention of inequality, the rise of the superrich, and the surging discontent with a global economy that has produced such grotesque imbalances.

Obliviousness such as this has contributed to the growing estrangement between left-liberal political parties and their traditional working-class base – another underlying cause of global unrest. The Democratic party’s struggles in such long-time strongholds as Michigan’s Macomb county and Wisconsin’s Racine county; the Labour party’s recent thrashing in the once-dependable English north; the collapse of the Socialists in France; the fading of the Social Democrats in Germany – all testify to how thoroughly the world’s social democrats have lost their way. These parties have been captured by what Thomas Piketty, in his forthcoming book Capital and Ideology, calls “the Brahmin left” – winners in the meritocratic race fostered by postindustrial society, who have lost touch with those who are less connected, mobile, and well read.

The current race among Democratic presidential contenders is in effect a competition to see which candidate can offer the most convincing explanation for the failures of the current system and the most appealing program to fix them. If no such program is forthcoming, Americans, too, might soon take to the streets.

  • Michael Massing is the author most recently of Fatal Discord: Erasmus, Luther, and the Fight for the Western Mind