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All you have to have is relative winners and losers. People are both cooperative and competitive. The mob doesn't have to act like a classical mob with pitchforks to be a mod. It just has to be given a say in things, giving it a vote seems popular, and it will (because people will be people) screw things up.
You live in CA now. Look at what happens when we let the people make the decisions by voting! I can't even get foie gras here. We've also come to notice in other places that people get cranky when they don't get their say.
Freudian slip, nah. I believe you snuck that in on purpose to see if you could slip it by Zeno. You just love tempting fate.
To add to your point here, yes there will always be losers (poor), no matter how much wealth is created. 150 years ago it was common for even somewhat rich folks to crap in a pot and take only one bath a week. Today we feel sorry for folks who live in mobile homes with indoor plumbing, big screen TVs, cell phones, etc. Masque's problem is he seemingly hasn't considered people have widely different ideas of what constitutes "fair," "to care," "potential," "respect," etc. Disagreements about these terms, along with the human nature you mentioned lead to the sort of situation we have today.