"Nature and economics share some fascinating patterns, one of which explains why Donald Trump is about to become president and how the morbidly rich have appropriated over $50 trillion from working class people since the 1980s. Scientists use something called the Lorka-Volterra equations to explain how predators and prey interact in the wild.
These equations show us that animal populations rise and fall in predictable cycles — when there are lots of rabbits, fox populations grow, but as foxes eat more rabbits, the rabbit population shrinks, which then causes fox numbers to drop, allowing rabbits to multiply again. Incredibly, this back-and-forth pattern mirrors what happens between the wealthy and working classes in our economy and political systems over the past 100 years.
Think about a forest ecosystem. When rabbits have plenty of grass to eat and safe places to hide, their numbers grow. As rabbit populations increase, foxes find it easier to catch prey, so they have more cubs and their numbers grow, too.But eventually, the foxes become so numerous that they start catching too many rabbits. The rabbit population crashes, and soon after, fox numbers follow suit because there isn’t enough food to go around. This creates a natural cycle that repeats over and over, unless something comes along to change the rules of the game — like a new predator, a disease, or human intervention.
This same pattern plays out in our economy and political system, though we often don’t recognize it. The working class, like the rabbits, create value through their labor and create demand — which drives economies — through their purchases of goods and services. They make products, provide services, consume both, and thus keep the economy running. The wealthy class, like the foxes, extracts value through ownership, investment, and control of resources. When the system is balanced, both groups can thrive. But when it gets out of balance, trouble follows. To see this pattern in action, look at a remarkable period in American history called the “Great Compression.” From 1900 to 1980 (with the brief exception of the Roaring Twenties), particularly after the New Deal, something unusual happened: the gap between rich and poor actually shrank for roughly 80 years. Working people saw their wages go up and their living standards improve. This happened because new rules and institutions — including labor unions, Wall Street regulations, anti-monopoly laws, and higher progressive income taxes — kept economic “predators” (morbidly rich individuals and corporations) from taking too much from economic “prey” (working class and poor people).
Just like a healthy forest needs the rules of nature as expressed in the Lorka-Volterra equations to keep any one species from taking over, these progressive policies put into place by FDR created balance in the economy, and thus political harmony across the nation. The specifics of those rules were comprehensive and carefully designed. The highest income tax rate on the wealthiest Americans was 90% in that era. Labor unions were protected by law and represented about one-third of all workers, meaning two-thirds of workers had the wage and benefits equivalent of a union job (union employers set local wage and benefit floors). Banks were strictly regulated and couldn’t engage in risky speculation with ordinary people’s savings. Monopolies were broken up when they became too powerful; the Supreme Court blocked the merger of two shoe companies in the 1960s because the new combined company would control 5% of the shoe industry (today Nike has 19%).
Those rules didn’t prevent people from getting rich, but they did ensure that extreme wealth accumulation was harder and that workers received a fair share of the value they created. The results were impressive. Between 1945 and 1980, when workers produced more, they earned more. A single breadwinner could support a family, own a home, buy a new car every few years, take a vacation, send kids to college, and retire with dignity and a pension. Social mobility was high, meaning children regularly achieved higher living standards than their parents. The wealth created by the economy was shared more fairly than ever before...."
