Somalia has been without a government for the past thirteen years. After the ousting of Siyaad Barre in 1991 observers were left with the question why a promising, even democratic, society sharing the same ethnicity, one religion, a common language and a predominantly pastoral culture was overtaken by a devastating civil war. Analysts stressed the significance of kinship and clan politics in the maintenance of sustained conflict. They argued that Somalia's state collapse must be placed in a historical context taking into consideration the cultural heritage of Somali society and the legacy of the colonial past. The purpose of the article is twofold: first, it seeks to explore an alternative explanation for the breakdown of Barre's dictatorial regime; and second, to analyse the social consequences of political and economic exclusion that followed the state collapse. The paper argues that Somalia's state failure can be explained by the unjust distribution of new sources of wealth in postcolonial Somalia. This modernisation process was accompanied by violent clashes and continued insecurity. The breakdown of the former regime did not create a representative government. Instead, faction leaders fought for political supremacy at the cost of the lives of thousands of civilians. In the absence of a functioning government that could guarantee security and protection, clan loyalties gained importance. Clan affiliation became a condition of being spared from violence. Unjust distribution of pockets of wealth, such as the high‐potential agricultural land in the riverine areas in southern Somalia, led to localised clashes. It will be argued that horizontal inequalities, or inequalities between groups, are based on both material and imagined differences. Somali faction leaders use these differences instrumentally, to maintain and to exercise power. Irrespective of the existence of invisible and physical markers, it is important to understand what existing social boundaries mean to their participants. A localised clan conflict in Lower Shabelle between the Jido and the Jareer clan families illustrates the consequences of social and economic exclusion. Groups who felt excluded from economic and political life, such as the Jareer, took up arms. Violence became a means of being heard and taken seriously in the current Somali peace talks in Kenya.