A K-shaped economy becomes dangerous not just from the wealth gap, but when the bottom half is actively regressing—falling behind the rising cost of living. This violation of the human need for progress is the primary trigger for instability, not the mere existence of billionaires.

Political violence and extreme polarization are symptoms of deeper economic anxieties. When people feel economically insecure, they retreat into tribal identities and become susceptible to narratives of anger, which can escalate into violence.

Populist movements flourish when a broken economy makes people feel insecure. Fear is transmuted into anger and tribalism as a coping mechanism. The only sustainable cure for populism is restoring broad-based economic prosperity, which makes people receptive to more centered messages.

Populism gains traction because the average person struggles to make ends meet. This political pressure leads to fiscally irresponsible policies and promises, which in turn exacerbate the economic problems, creating a self-reinforcing downward spiral.

Widespread violence, like the French riots, is not random. It's an inevitable outcome when a society faces a "shrinking pie" economy and lacks a strong, shared national identity to unify its diverse populations. Populism and conflict are the predictable results.

History shows that the combination of economic stagnation, social instability (often linked to cultural and demographic shifts), and a loss of faith in the political class creates a predictable environment for conflict, violence, and civil unrest.

Technological progress, measured as productivity growth, has been surprisingly slow since the 1970s. This low-growth environment forces a zero-sum mindset where one person's gain requires another's loss, fueling political division. High AI-driven growth could create a positive-sum environment, reducing political friction.

A growing economy allows diverse groups to coexist without conflict. When the economy contracts and resources become scarce, people retreat into tribal, "me and mine" mentalities, and latent social and political frictions erupt as groups fight over a shrinking pie.

The root cause of many social conflicts is not just ideology but deep-seated economic anxiety. When people struggle to pay bills, that stress turns into anger, which is easily manipulated into tribalism and fighting over a perceived "shrinking pie."