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Used to describe a person (or subculture) that does everything in it's power to destroy the ambitions of those among them who wish to improve themselves. It comes from the story of [catching crabs] in a bucket. When you [catch a crab] and place him in a bucket, [the first thing] he'll try to do is escape. Now, if you put two crabs in a bucket (hence the plural form of 'Crabs in a Bucket') and place them in there together, as soon as one tries to climb up out of the bucket the other will grab the escaping crab by the legs and try to escape itself, to which the process gets repeated to the point where NO crabs end up escaping.
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