This blog post is the 5th and final post in a 5-part series on income inequality. Click below to navigate between the parts of the series:
Part 5: Conclusion, and a Rage Against Fatalism
If you’re still here, thanks for sticking with me for such a long series. For those that are just joining for the TLDR wrap-up, in Part 1, I explained my personal reasons for being so interested in income and wealth inequality. In a nutshell, I grew up in a place that’s pretty poor, I now live in a place that’s pretty rich and I worry about that growing inequality will needlessly destabilize our world.
In Part 2, I provided a short history of income and wealth inequality and introduced a summarized version of Picketty’s relationship between the rate of return on capital and national growth rate to explain why income and wealth tend towards greater inequality in stable systems.
In Part 3, I introduced the 4 horsemen: mass mobilization war, revolution, state collapse, and plague. I provided examples of the effects of these afflictions and made the case that for all of recorded history, they have been the primary mechanism for redistributing income and wealth.
In Part 4, I took a tour through the alternatives including land reform, economic crises, and policy changes and made the point that while there are some technically non-violent alternatives to the 4 horsemen, their record of real change is pretty dismal.
Now it’s time to tie everything back together. At the beginning of this series, I made the bold statement that global income inequality is a malady whose most likely cure is worse than the disease. What I hope to have shown through this series is that the “most likely cures” I referred to necessitate human suffering on such a scale that it is hard to imagine. As an example, a recurrence of the Black Death with similar mortality figures today would result in billions of deaths globally. The populations of entire nations would be wiped from the planet. That’s approximately the order of magnitude of shock that history suggests would be required to materially reverse the current trend of income and wealth inequality. I think that makes the cure far worse than the disease.
But in true pessimist fashion, I think all this gloom has a bit of a silver lining. My research has reassured me that current levels of inequality are not necessarily going to destabilize the planet’s economic order. It’s tempting to look at graphs like those in part 2 and conclude that rising inequality leads to violence, but that would be a spurious conclusion to draw from the data. Extreme violence levels income and wealth inequality, but there is no clearly defined causation between inequality levels and violence. The actual sparks that ignite violence appear to be too varied and complex for modern economists and historians to accurately analyze. Something certainly causes humans to instigate violence, and that something might be correlated with higher income and wealth inequality, but we do not have concrete proof of the linkage.
To the contrary, there is an enormous body of historical evidence to suggest that societies can peacefully persist at high levels of inequality for centuries at a time before devolving into violence. Given the nastiness of those violent transitions, this should come as good news for those that believe our current trajectory leads inevitably to a great unravelling. That outcome is possible, but if we look to historical empires from Rome to Egypt and more recently France and the UK, nations can exist without mass mobilization warfare or other horsemen visitations for a very long time.
This obviously doesn’t mean we’re out of the woods. By virtue of the Great Compression in the 20th century, people living today have firsthand memories of what it was like to live in a more equal society and a transition back to the historical norm may very well cause wars, revolutions, state collapse and plague. There are already dark clouds on the horizon as populist movements gain momentum throughout the world, but there is nothing predetermined about this movement. It is very hard to predict the future and it seems plausible that the current resurgence of populism is merely a hiccup in a transition to a more stable, historically normal income and wealth distribution.
And if that were to happen, the present is not a bad world to live in. Even if current inequality trends continue, the poor today are vastly better off in a material sense than they have ever been throughout human history. Although there are tremendous, incredible injustices in the world and it is in vogue to focus on those things, the 20th century witnessed staggering improvements in human quality of life. To take just one example, infant mortality fell 90% between 1915 and 1997. If I had to choose a moment in history to live in for a while, even with increasing inequality, this would be it.
One Last Note: A Rage Against Fatalism
Having spent the time to read these books, analyze them and write what must seem to be an overwhelmingly fatalist blog series, I want to end on a high note. I believe that history is the largest available data set from which we can draw conclusions and attempt to predict future events. But history is by its very definition just one observed path through an infinite set of possibilities. Just because policy changes and peaceful interventions have virtually no historical precedent for reversing growing income and wealth inequality, that doesn’t mean they aren’t worth trying. I will be doing that most idealistic thing in the coming elections: voting for elected politicians that have at least a glimmer of a chance at peacefully redistributing wealth through incentives that don’t inevitably lead to the deaths of millions of people. For all its flaws and abuses, representative democracies sometimes get it right and there’s nothing to be lost by trying.