Does inequality increase inexorably, or are there reliable predictors of when and how it will decline? That is the key question of this book, which considers four possible means for reducing inequality: mass-mobilization warfare, revolutions, state collapse, and catastrophic plagues. The result is a very engaging account with some potentially uncomfortable implications.
Scheidel starts with a basic discussion of the conditions under which inequality can exist. Inequality of wealth requires durable goods (for storing wealth) and leisure time (for enjoying them). Inequality of income requires an economy that produces beyond subsistence level, anda sedentary lifestyle (i.e. non-nomadic, agricultural). One mechanism for inequality to increase over time is the transmissability of wealth between generations (p. 37); Timur Kuran has explored this in a cross-cultural context (todo link).
Historical levels of inequality are difficult to comprehend for those familiar with contemporary developed economies. To measure this, Scheidler relies on a variety of creative data sources including ancient burial sites and archaeological data on house sizes. Roman society was unequal on a scale almost unimaginable today (p. 78). By contrast, in industrial societies at the turn of the twentieth century, the top one percent received about 15-20% of all reported income.
Since ancient Athens, military conscription and widespread service has been used as a means to mitigate inequality. As the title suggests, the core thesis is that war reduces inequality. The specific mechanisms are progressive taxation, unionization, and democratization (p. 170), all promoted by a shared, difficult experience. Total war also typically involves rpice freezes, increases in top tax rates, rationing, and intervention in equity and bond markets, all of which have a disproportionate impact on the wealthy (p. 119).
In this respect, mass mobilization warfare (defined as more than 2 percent of the population at arms) differs from either revolutions or civil wars. The U.S. Civil War is an interesting case with respect to inequality: it made the North less equal, and the South more so (p. 176-77). However, this was perhaps the last time in history where elites on the winning side gained and elites on the losing side, well, lost (p. 179). In earlier periods, repeated success in warfare made societies more unequal, as their elites benefited disproportionately (p. 200). Elsewhere, there an abundance of research on whether inequality predicts civil war, and relatively little in the reverse direction (p. 203; note also that civil war has an impact on data quality, before, during, and after a conflict).
The impact of catastrophic plagues is also interesting to consider. The Black Death reduced population substantially, which in turn increased the scarcity (and thus the value) of labor relative to capital. The Spanish flu, according to Scheidler, did not have such an impact, but this is difficult to disentangle coming as it did on the heels of the First World War.
This analysis leads to several questions that merit further consideration. First, is there an alternate possibility that war causes social and economic upheaval, leading to different winners and losers in society? The top 0.1% in 1940 and 1945 are not necessarily the same individuals, firms, or families. It could be that war destroys business models that were optimized for pre-war conditions.
Second, what are the other, related indicators of increased post-war inequality? The best example of this is the expansion of the franchise in democracies (p. 168). In Britain, the NHS was largely seen as an entitlement for a society that had endured so much.
Third, how did the shift to an all-volunteer military in the U.S. (and many other countries) affect inequality? And can the shared experience of mass mobilization warfare be substitued by mandatory national service? (Matt Yglesias offers a compelling argument that the answer is “no” in this recent episode of “The Weeds” podcast.)
As Scheidler concludes, “[a]ll of us who prize greater economic equality would do well to remember that with the rarest of exceptions, it was only ever brought forth in sorrow.”