By this point in Mormon’s writings, we expect that righteous Nephites will have a short time of peace, and then become prosperous and create a hierarchical society. That is the harbinger of this not going well for the Nephites. Although we expect it, it is always sad to see, and in this case, even sadder because it followed the rather spectacular sign of the Messiah’s birth, and most recently, the miraculous salvation from the Gadianton robbers.
Nevertheless, there is again “a great inequality in all the land, insomuch that the church began to be broken up.” The idea of inequality does not immediately appear to suggest that the church should have been broken up, but social equality was one of the important Nephite ideals. When the majority began to favor inequality (obviously favored by those who could see themselves as better than others), a fundamental church teaching was no longer believed. That probably led to discarding other Nephite beliefs, and therefore, lack of belief broke up the church. While there were those who were “willing with all diligence to keep the commandments of the Lord,” those people were now in the minority. The majority did not feel inclined to keep the commandments of the Lord.
Mormon spends more time on this moral discussion of the effect of keeping and breaking the commandments than he typically does in narrative. He is not quoting a prophet here, but simply making his own conclusions known. Mormon knows what is coming, and he wants his readers to understand how it happened. Knowing how this event happened will also help understand the condition of the Nephites in Mormon’s day.