[ouid]

out of control wealth inequality precedes economic collapse.

Pollution is the clear example, I think. The more money I have, the more money I can make by polluting. If I capture below a certain threshold of the benefits of pollution, then the personal cost to me of pollution outweighs any benefit I might receive, and I'm disincentivized from polluting. The more wealth inequality there is, the more frequently scenarios in which pollution is profitable to me occur. Compounding this problem, pollution increases wealth inequality on its own. It creates health burdens and lowers output. It's expensive for society. So I end up profiting while everyone else takes a loss, thereby increasing wealth inequality.

Democratic government helps a great deal with this problem (although simple majority is insufficient to offset it entirely, even with ideal information), but democratic governments themselves become polluted by exactly the same decision making processes.