What really reduces economic inequality? According to Walter Scheidel, the surprising answer is something nobody would wish for: mass violence and catastrophe. Tracing the global history of inequality from the Stone Age to today, Scheidel shows that inequality never dies peacefullyit consistently declines when carnage and disaster strike and increases when peace and stability return. THE GREAT LEVELER is the first book to chart the crucial role of violent shocks in reducing inequality over the full sweep of human history around the world. Recently, Scheidel took the time to answer some questions about his startling conclusions:
What is the great leveler?
Violence is the great leveler, expended in massive shocks that upend the established order and flatten the distribution of income and wealth.
There are four major types of shocks, which I call the Four Horsemen. Thats a fitting image because they were just as terrible as the bringers of doom in the Revelation of John. The first of them is mass mobilization warfare, which reached its heyday during the two World Wars when enormous physical destruction, confiscatory taxation, aggressive government intervention in the economy, inflation, and the disruption of global flows of trade and capital wiped out elite wealth and redistributed resources on a massive scale. These struggles also served as a uniquely powerful catalyst for equalizing political reform, promoting extensions of the franchise, union membership, and the welfare state. The second is trans-formative revolution, which was also primarily a phenomenon of the twentieth century, when communists expropriated, redistributed and then collectivized, in the process matching the World Wars in terms of body count and human misery.
Aftermath of war and catastrophe | Photo Courtesy: TimeThe collapse of states is the third one, not uncommon in the more distant past: everyone suffered when law and order unraveled but the rich simply had more to lose. Plague rounds off this ghastly quartet. On a number of occasions, most famously during the Black Death of the Late Middle Ages, epidemics carried off so many people that labor became scare and real incomes of workers rose while the land and capital holdings of the upper class lost value.
Your book covers thousands of years. Surely things must have changed over time?
Of course they have, but less than you might think. It was the sources of inequality that experienced the biggest changes. The shift to farming and herding after the last Ice Age let our ancestors create material assets that could be passed on to future generations, allowing some families to pull away from the rest.
[su_pullquote align=”right”]Even as these changes unfolded over the long run of history, violent shocks remained the most potent mechanisms of leveling.[/su_pullquote]
Later, as states and empires appeared and grew in size and power, elites filled their pockets with profits from public office, corruption, coercion and plunder. While this continues to be common practice in some parts of the world, in the West gains from commerce and enterprise have gradually replaced those more archaic form of enrichment. But even as these changes unfolded over the long run of history, violent shocks remained the most potent mechanisms of leveling.
But what about the postwar decades? Didnt the economy grow and the middle class prosper at the same time as inequality declined?
Thats true, and thats why many people in America and Europe look back to this period as a time of great progress and welfare. Current ideas of making America great again owe a lot to this happy convergence of affluence and equality, and reflect the understandable desire to somehow bring it back. But we must not forget that it was the carnage and the perils of the Second World War that under-girded the entire process.
[su_pullquote]It was the war effort that gave rise to the many invasive regulations and taxes that ensured future gains would be more equitably distributed.[/su_pullquote]
After the New Deal had ushered in progressive policies, it was the war effort that gave rise to the many invasive regulations and taxes that ensured that future gains would be more equitably distributed. This benign fallout from the war faded over time until a new round of liberalization, competitive globalization and technological change allowed inequality to soar once again. Since the 1980s, the economy has continued to expand but a growing share of the pie has been captured by the much-quoted one percent.
Thats a sobering perspective. Arent there any other factors that can combat inequality and dont involve bloodshed and misery?
Absolutely. But they often fall short one way or another. Economic crises may hurt the rich for a few years but dont normally have serious long-term consequences. By reducing inequality and prompting progressive policies, the Great Depression in the U.S. was a bit of outlier compared to the rest of the world.
[su_pullquote align=”right”]Successful land reform, has been the product of war and revolution or the fear of violent conflict.[/su_pullquote]
Perhaps surprisingly, political democracy by itself does not ensure a more equal distribution of income and wealth. Nor does economic growth as such. Education undeniably plays an important role by matching skills with demand for labor: most recently, it helped lower the massive disparities that have long weighed down many Latin American countries.
Even so, the historical record shows that all of these factors were at their most effective in the context or aftermath of major violent shocks, such as the World Wars.
Successful land reform, which is of critical importance in agrarian societies, has likewise often been the product of war and revolution or the fear of violent conflict.
This doesnt raise much hope for the future. What are the chances that we will be able to return to a fairer distribution of income and wealth?
Hoping for peaceful means of leveling | Photo Courtesy: AmiriteThats a good question, although few people will like my answer. The traditional mechanisms of major leveling, the Four Horsemen, currently lie dormant: technological progress has made future mass warfare less likely, there are currently no revolutions on the horizon, states are much more stable than they used to be, and genetics will help us ward off novel epidemics.
[su_pullquote]The traditional mechanisms of major leveling currently lie dormant, but powerful peaceful means of leveling have yet to be found.[/su_pullquote]
Thats a good thing nobody in their right mind should yearn for death and destruction just to create greater equality. But similarly powerful peaceful means of leveling have yet to be found. And to make matters worse, a number of ongoing developments may drive up inequality even further: the aging of Western societies, immigrations pressure on social solidarity and redistributive policies, and the prospect of ever more sophisticated automation and genetic and cybernetic enhancement of the human body. Barring major disruptions or an entirely new politics of equality, we may well be poised to enter a long period of polarization, another Gilded Age that separates the haves from the have-nots.