In the process of economic growth, the rich-poor gap and the urban-rural gap are gradually being widened. China has to be confronted with the double threats of the ″poverty trap″ and ″middle-income trap,″ which exert serious threats on the economic and social development. Social conflicts, represented by mass incidents, are increasingly becoming the focus of the present society.. This paper attempts to explain the mechanism of conflicts and the solution to them from the perspective of modern economics within the framework of a story, and to bring the conflict between the elite and the public into an analytical framework based on the game theory, in order to provide suggestions for social stability and harmony. We have found that when the protection of property rights is improved, the elite conflict input remains unchanged while social public investment is reduced. In brief, the public will reduce the protection inputs if the government provides more comprehensive protection of property rights. Besides, if the target product is higher, the two sides will put more resources into conflict. In other words, the lack of protection of property rights which leads to the increase of competing products is the important reason for social conflict. When the elite enhance efficiency in the social public conflicts, the income distribution will deteriorate, which is a fact. On the other hand, when their conflict ability becomes stronger compared with the public, they will not be afraid of the increasing conflict efficiency of the public because of the low income distribution, neither will they be willing to allow other social elite to share their ″achievements.″ We have also found that when the income distribution deteriorates, the gap between both sides' social capitals will be widened, resulting in more conflict input, that is, the conflict becomes more intense. However, the social capital gap has only limited effect on the conflict inputs as long as the income is sufficiently distributed. This shows that when the income is relatively poorly distributed, it is more difficult for the public to tolerate the occupation property of social capital, and that when income distribution becomes improved, the public are no longer sensitive to the impact of social capital, because they can expect to get the same social capital from the ″next term.″ Although the income distribution is determined by the elite, the public's income will not be reduced to a minimum when the elite gains the maximum income|in other words, the elite can improve the income situation for both sides when they try to achieve pareto improvement, through enhancing income distribution within certain limits. On the other hand, if the elites' income will be reduced by the further improvement of the total public income, the elite have no incentive to improve the income of the public once they are out of this range. Therefore, it is somewhat complicated for the elite to increase their incentive to improve income distribution. 