Why is America today so politically charged and polarized, to the point that people are regularly clashing in the streets? As James Carville used to say, “It’s the economy, stupid.”

The power elite were sweating under the hot lights of public scrutiny and populist outrage.

Americans still haven’t got their economic mojo back since the financial/housing crisis and Great Recession of 2007-2009. And today’s public agitation is largely an extension of the protest movements that emerged in the wake of that downturn.

On the right, the Tea Party movement arose in 2009 largely out of disgust that big banks and big business had been bailed out by big government with newly printed money, high taxes, and deficit spending, while homeowners, workers, and small business owners were left to shift in the wind.

On the left, the Occupy movement of 2011 blamed rising inequality and hardship on the corruption of Washington by crony-capitalist Wall Street. The fact that none of the politically-connected bankers considered responsible for the economic crisis had ever been prosecuted was their Exhibit A against the so-called 1%.

The power elite were sweating under the hot lights of public scrutiny and populist outrage. Then, just when it seemed the jig was up, their fat was pulled out of the fire by American democracy.

Populism Co-opted and Corrupted

By 2015, many Americans were at the end of their rope, having endured eight straight years of economic frustration and humiliation. So when the presidential primary campaigns began that year, they were emotionally susceptible to the corrupting influences of political “hate season.”

The candidate who sermonized most stridently against “greed” was the biggest greed-monger of them all.

On both the left and the right, the populist movements fully succumbed to the politics of resentment, envy, and avarice. The prospect of having vast presidential power wielded on their behalf drew their attention away from the elite authors of their misfortune and led them to turn on each other: to cast hungry eyes on whole subpopulations, great swaths of regular people and fellow victims of government oppression. The populist candidates of 2015 served these classes of people up as sacrificial scapegoats, heaping upon them the blame for the economic troubles of their constituents.

How Occupy Got Berned

Bernie Sanders, who inherited the populist energy of Occupy, shifted the focus away from corruption and impunity, and toward scapegoating the productive and affluent for not paying their “fair share.” There was still some talk of a “rigged economy,” but what really drove Bernie’s movement was a simple, shameless, and sordid clamoring for prizes extracted from others, like free college, debt-forgiveness, and single-payer healthcare.

The candidate who sermonized most stridently against “greed” was the biggest greed-monger of them all. The grassroots anti-cronyism of Occupy degraded into the demagogue-stimulated envy and unvarnished redistributionist socialism of the Bernie Revolution, as idealists were enthralled by the lure of legal loot.

Upper middle class millennials with loads of debt, few marketable skills, and zero job prospects dreamed that everything would finally turn around for them if those rich bastards would just cough up enough money to provide them a free 4-7 year postponement of the burdensome realities of the working world, so that on graduation day, they would be awarded a golden ticket to cushy jobs and shelter-for-life from any responsibility to provide for their own medical upkeep.

The candidate who thundered about Making America Great Again led many Americans to think of themselves as small and weak.

How the Tea Party Got Trumped

Meanwhile, Donald Trump, who inherited the populist energy of the Tea Party, shifted the focus away from “Taxed Enough Already” and “End the Fed,” and toward scapegoating Mexican workers and Chinese manufacturers for “stealing” American jobs. There was still some railing against the Washington elite, but what really drove the Donald’s movement was an ignoble demand for economic warfare to be waged on others in order to shelter his constituents from the responsibility of keeping up with the market.

The candidate who thundered about Making America Great Again led many Americans to think of themselves as so small and weak that they needed big daddy government to protect them from economic competition. The grassroots resistance of the Tea Party degraded into the demagogue-stimulated jealousy and unadorned exclusionist nationalism of the Trump Revolution, as patriots were goaded into base tribalism by the promises of a would-be warrior chief.

White native-born blue collar men who had been struggling to make ends meet and suffering rising mortality rates dreamed that if jobs could be reserved for “true Americans,” then maybe their humiliation would end and they could look their wives and children in the eyes with pride once again.

And single, unemployed young white men whiling away their days gaming and meme-posting in their parents’ houses dreamed that if “God-Emperor” Trump were able to seize power, he could drain the swamp of the degenerates holding them back from greatness.

Scapegoating and the spirit of aggrandizement were part of the Tea Party and Occupy movements from the beginning, and probably would have eventually eclipsed the more principled aspects anyway. Both were political movements, and politics is fundamentally about factional aggrandizement at the expense of principle. But the demagoguery of Sanders, Trump, and the election season itself greatly accelerated that eclipse.

The Clash of Hungry Hordes

Seemingly against all odds, Trump did win. The Trumpenproletariat were elated and emboldened, parading around in flag-wear and demanding that The Wall be built without delay.

Meanwhile, the Hillary-Bernie-bourgeoisie plunged into deranged panic, with “Resistance” protesters marching around in genitalia hats, campus social justice warriors screeching at anyone exuding even a whiff of Trump’s anti-PC predilections, and middle-class Marxist “anti-fascists” committing arson and beating up Trump fans.

The state has divided America up into rival ravenous tribes, and the crowds we see facing off in the streets of Berkeley are the vanguards of those hungry hordes.

Trumpists have taken to fighting back, and now lightly-armed street brawls between crowds of politicized belligerents—with nothing better or more remunerative to do, thanks to the moribund economy—are becoming a regular occurrence, with Berkeley, California being the battlefield of choice.

The street combatants on the left and right claim to be fighting, respectively, for free speech and against fascism. But at bottom, they are really fighting to conquer and hold advantageous ground for use in a larger economic war, waged through politics.

The state has impoverished its subjects through its ruinous burdens and meddling, and it has used democratic demagoguery to shift the blame and pit its victims against each other. It has divided America up into rival ravenous tribes, and the crowds we see facing off in the streets of Berkeley are the vanguards of those hungry hordes.

Muh Economic Pie

Both sides are convinced that the fundamental problem is that their tribe is not getting enough of the economic “pie.”

For the left, productive and affluent Americans are hoarding too much of the “wealth” pie, which must be re-sliced and redistributed. That is the only way all those angsty middle-class millennials can finally get past their “failure to launch.”

For the right, productive and poor immigrants and foreigners are taking slices of the “jobs” pie that aren’t rightfully theirs. Those slices must be restored to their rightful owners by means of The Wall and trade barriers. That is the only way all those humiliated heartland Americans can finally get their lives back on track, and all those frustrated internet edgelords can finally get girlfriends.

Many of the other preoccupations of the left and right are largely a validating veneer for this underlying economic warfare.

The socialist left loathes the right for countless political and cultural reasons, but what brings the antipathy to the point of violent rage is not the fear of goose-stepping goon squads constructing gas chambers. Rather, it is the perception that Trump supporters are threatening their ability to wage redistributionist economic warfare on the productive and affluent. That is why mobs of Bernie Revolution veterans have even taken to storming free market think tanks.

The nationalist right reviles the left for many reasons too, but what really gets them in a fighting mood is not the fear of homegrown Maoist student Red Guards building re-education camps. Rather, it is the perception that lefty obstructionists are threatening their ability to wage exclusionist economic warfare on the non-native industrious and poor.

Many of the other preoccupations of the left and right are largely a validating veneer for this underlying economic warfare.

Due to the spectacular failures of communism across the world, economics-focused orthodox Marxist rhetoric is no longer viable. But university-bred cultural Marxism serves as an effective vehicle for class warfare since most conspicuous capitalists are cisgendered white men who can be economically harassed and bullied on “social justice” grounds.

And right-wing hand-wringing over the alleged propensity of immigrants to commit various heinous crimes, such as rape, terrorist attacks, and voting Democrat, is largely an excuse for excluding them from “our jerbs,” to quote South Park. So is the demographic panic of today’s new wave of white nationalists.

Doctrines of War

Both socialism and economic nationalism are variants of what Ludwig von Mises called warfare sociology. Both the socialist left and the nationalist right consider warfare to be necessary and inevitable. Their chief difference is over where to draw the battle lines.

Both the left and right believe that society is suffused with fundamental and unavoidable conflicts of group interests.

Classically, the socialist left draws them between classes, while the nationalist right draws them between various demographic “tribes.” As Mises wrote, ”Nationalist ideology divides society vertically; the socialist ideology divides society horizontally.” However, now the left is also preoccupied with demography, and the right has its own ways of waging class warfare against the poor.

The democratic state cultivates warfare sociology by offering all subpopulations corrupting access to its machinery of power, which can be used to perpetrate what Frederic Bastiat called “legal plunder” against other subpopulations, whether through direct expropriation (the Bernie method) or through persecuting economic competitors (the Trump method). This has the effect of dividing its subjects into warring, mutually plundering tribes or “interest groups.”

In calmer times, this economic warfare is waged in an “orderly” fashion through the mechanisms of politics and bureaucracy, with the state taking a cut of the loot from each act of legal plunder. But in lean times, the strife can start spilling out into the streets. That’s what we’re seeing today.

Aside from institutional factors, warfare sociology is also cultivated by an ideological factor. Both the left and right believe that society is suffused with fundamental and unavoidable conflicts of group interests. Mises called this fallacy the Montaigne Dogma: that no individual, or tribe, can gain except at the expense of another. This zero-sum fallacy is the root of the socialist left’s obsession with how the “wealth pie” is divvied up as well as the nationalist right’s preoccupation with how the “jobs pie” is apportioned.

The Philosophy of Cooperation and Peace

Both fail to understand, or have never even encountered, what Mises called the "classical harmony doctrine.” This is the understanding, developed by free-market economists and classical liberals, that society is actually characterized by a harmony of rightly-understood interests, and that free association redounds to the benefit of all.

The socialist left doesn’t understand that the capital accumulated by capitalists redounds to the benefit of labor, because capital investment increases the productivity of labor, and so leads to a continual rise of real wages. Such a capital-enhanced stream of wages is many times more profuse and sustained than any trickle they can hope to wring from the bourgeoisie by force.

In general, the socialist left doesn’t realize all the myriad ways in which taxes, regulation, and the welfare state impoverish and debilitate everybody, including college kids, and especially the poor.

Instead of making productive connections, they sow destructive divisions.

The nationalist right doesn’t understand that free competition in trade and labor, irrespective of birth or nationality, redounds to the benefit of native workers, because it expands the sphere of economic cooperation and allows and incentivizes workers to find their role of greatest comparative advantage in the division of labor. Such a fluid, dynamic market yields an abundance of consumer services and commodities, to be purchased with ever-rising real wages earned through new, more efficient, and less-backbreaking kinds of work.

In general, the nationalist right doesn’t realize all the myriad ways in which protectionism, economic exclusion, and autarky impoverish and debilitate everybody, including and especially the native-born working class.

And the American people in general, thanks to having their initiative and innovation stifled by an entire childhood and young adulthood of regimented schooling, are bereft of the spirit of entrepreneurial individualism that would empower them to defy, escape, and transcend government-imposed economic stagnation. Thanks to the rise of e-commerce, the gig economy, the sharing economy, telecommuting, etc, opportunities to forge a thriving non-traditional career and livelihood abound like never before.

Most are blind to this exciting state of affairs, and so instead of finding entrepreneurial solutions to their economic problems, they waste their time and energy chasing political solutions. Instead of using the internet to make money, they use it to grouse about politicians, inveigh against enemy political tribes, and spew hostility toward enemy classes and demographics. Instead of focusing on improving their own lives, they join mobs on the web and on the streets to demand that government fix their problems for them at the expense of others. Instead of making productive connections, they sow destructive divisions.

The Way Out and Upward

Neither side can “win” in the burgeoning civil strife afflicting America. Stubborn efforts to do so by trying to overwhelm tribal enemies, whether by storming the voting booths or storming the streets, will ultimately only lead to an outright civil war in which everybody loses big time. And using government or paramilitary force to try to crush the most thoroughgoing socialists and nationalists isn’t the answer either, because that will only cause the war to intensify and spread.

Socialism and nationalism feed off of violence, and so cannot be overcome through violence.

To alleviate our civil strife, we must understand that its roots are economic. Americans are locked in economic civil war, because they are enthralled by socialist and nationalist fallacies, and because they do not comprehend, or are simply unfamiliar with, the truths of liberalism and sound economics.

The only way to win this fundamentally economic war is not to fight it: to renounce conflict, collectivism, group scapegoating, legal plunder, and the corrupting pursuit of political power and influence.

And the only way we can lastingly stop others from waging economic warfare is by spiritually attacking the socialist and nationalist fallacies that drive it. Socialism and nationalism feed off of violence, and so cannot be overcome through violence. Socialism and nationalism can only be dissolved by the ideas of liberty and peace, cooperation and harmony, independence and individualism.

The economically frustrated, and especially the young, can indeed turn things around, but only if they stop wallowing in resentment and dependence. The escape route from humiliating, idle loser-dom is not through politics and tribalism, but through individual self-improvement and enterprise.