Globalization, Entropy, and the Coming Social Crisis

(the fourth of four stories about entropy and homeland security)

Humans are jealous and competitive creatures. Just are. We like to watch how others are doing, and compare ourselves to those around us, not how we are doing in absolute sense. If we have less than those around us we feel deprived, if even relatively so, and we resent it. The theory that observes and explains this human tendency is known as Relative Deprivation Theory. As the name implies, relative deprivation is subjective, and well, relative, depending upon the point of view of the person feeling deprived. People can feel relatively deprived when their circumstances don’t meet their expectations, even when their situation is improving. Considering that median household income in the US has been falling for years now, we might expect for many Americans to feel relatively deprived.

The causes of social unrest are complex, and while a large economic inequality doesn’t necessarily always result in social unrest or civil war, the likelihood is greatly increased if the inequality corresponds to racial or ethnic divisions. Don’t look now, but the distribution of wealth in the US is not only becoming more skewed, it is becoming stratified along racial lines. Another aspect of relative deprivation that people experience is “fraternal deprivation”, or a sense of deprivation based on the way some people feel members of their group are perceived or treated. Correspondingly, we might expect to see manifestations of conflict beginning to manifest themselves, and alas, we do. While the immediate cause of the recent unrest in Ferguson, Missouri was the shooting of a black 18 year old by a white police officer, perceptions of growing disparities of wealth and opportunity were also present.

The Gini coefficient is a statistical measure of economic inequality, and therefore is also a measure of relative deprivation, and the Gini coefficient for Western industrialized countries has been rising for several decades now, and is considered by many to be a threat to social cohesion.

Immigration — Wage differentials are driving force motivating human migration, so it should come as no surprise that large amounts of immigration depress the cost of labor, and so it is with the US, especially in the lower end of the wage scale, which tends to widen the wealth gap.

Globalization is considered a beneficial process by many, but many aspects of globalization are actually working to increase economic inequality in the United States. These include:

Trade — Competition from low wage countries has devastated American manufacturing in recent decades, eliminating a millions of well-paying jobs.

Technology — Mid-level jobs represent a sweet spot of savings, with high cost and ease of automation. Western countries have reached the point where each innovative cycle destroys more mid-level jobs than it creates, pushing remaining jobs further out of reach for many and leaving those unemployed, increasing the disparity of wealth and opportunity. As technology advances and the cost of automation falls, an increasing number of professions are expected to come under increased competition from technological substitution, threatening more jobs and further pressuring wages.

Another factor related to technology that is working to widen economic disparity known as “technologically biased technological change”, which is that the use of technology has made some people with certain specialized skills much more productive than they had been in the past, relative to other workers.

Investment — In the US, trade competition has led to the bankruptcy and export of entire manufacturing plants overseas, particularly to China, resulting , in major loss of American jobs. In general, globalization has motivated companies to pursue worldwide outsourcing leading to a search for ever cheaper labor and new ways of organizing production, leading to a shift of income, and therefore power, towards to controllers of capital.

Going forward, it appears that we are headed into an unprecedented situation. Throughout history here have always been disparities in power and wealth — between the rich and poor, between those with political power and those without, and between capital and labor. But in the past, the rich and powerful at least needed the more down trodden part of the population to perform labor, operate equipment, do paperwork, and perform other functions, and this gave lower segments of the population some bargaining leverage, however meager it might be at times. In other words, there was something of an interdependence and balance between capital on the one hand, and labor on the other. Even slaves were valuable as economic assets that performed needed work. But now, as more and more jobs are being automated, and, increasingly, human functions are, and will continue to be fulfilled by computers, robots, and other machines, capital will become labor, and large parts of the population will become essentially unemployable and redundant. Indeed this is already happening.

As increasing numbers of people lose their jobs due to globalization or are replaced by cheap machines and become marginalized, lose hope or a sense of having a stake in the system, and experience a sense of relative deprivation, we can expect increasing social unrest. Simultaneously, what use will the powerful have for the unemployable part of the general population, when they will have machines that can perform work for them more cheaply and efficiently? The consequences for democracy in such a highly stratified social environment seem decidedly negative, and an eventual social crisis, unavoidable. In fact, we may be in the early stage right now.

Other stories in this series:

The Ultimate Heat Death of the Universe, and You

Globalization, Entropy, and Terrorism

Sand piles, Avalanches, and the Next Catastrophe

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