Was planning on stopping by my favorite bookstore on Wednesday or Thursday to pick up a copy of Walter Scheidel’s The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First Century. Just as an extra nudge, the author published an article on the topic today in The Atlantic. As you might have guessed from the subtitle, it is not a hopeful piece. “With the rarest of exceptions, great reductions in inequality were only ever brought forth in sorrow,” the author writes.
No candidate was particularly honest about the economy and wealth inequality in the recent Presidential election. In one debate during the Democratic primary, Hillary Clinton argued that the free markets had allowed post-war America to create an upward trajectory for those seeking a solid middle-class existence. Well, not exactly.
The free market was important, sure, but it can’t be forgotten that progressive tax rates reached 90% during the Eisenhower Administration, a figure even your average liberal today would say is draconian, and that money was redistributed via investment in those who had less, often through education, social welfare and infrastructure development. Without flourishes from both capitalism and socialism, the level playing field that inched into the 1970s never would have existed for more than two decades. And if you remove World War II from the equation, it never would have happened at all.
Calls to make America great again hark back to a time when income inequality receded even as the economy boomed and the middle class expanded. Yet it is all too easy to forget just how deeply this newfound equality was rooted in the cataclysm of the world wars.
The pressures of total war became a uniquely powerful catalyst of equalizing reform, spurring unionization, extensions of voting rights, and the creation of the welfare state. During and after wartime, aggressive government intervention in the private sector and disruptions to capital holdings wiped out upper-class wealth and funneled resources to workers; even in countries that escaped physical devastation and crippling inflation, marginal tax rates surged upward. Concentrated for the most part between 1914 and 1945, this “Great Compression” (as economists call it) of inequality took several more decades to fully run its course across the developed world until the 1970s and 1980s, when it stalled and began to go into reverse.
This equalizing was a rare outcome in modern times but by no means unique over the long run of history. Inequality has been written into the DNA of civilization ever since humans first settled down to farm the land. Throughout history, only massive, violent shocks that upended the established order proved powerful enough to flatten disparities in income and wealth. They appeared in four different guises: mass-mobilization warfare, violent and transformative revolutions, state collapse, and catastrophic epidemics. Hundreds of millions perished in their wake, and by the time these crises had passed, the gap between rich and poor had shrunk.•
Tags: Walter Scheidel