Income Inequality Is Likely Here to Stay

Income inequality has become an increasingly visible and salient issue in the past few years, with ideas for fixing it on all sides of the aisle. But according to Stanford History Professor Walter Scheidel, author of The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First Century, these approaches may not be the panacea many might like them to be.

Scheidel says that’s because violence is the only force in history that has truly managed to liberate wealth from the upper stratum of society. He frames his historical analysis of trends in inequality around what he calls the Four Horsemen: “mass-mobilization warfare, transformative revolutions, state collapse, and catastrophic plagues.” Only these “shocks” have the transformative power required to reduce inequality. It’s a grim, grisly prospect, one that raises more questions than it answers about how to move forward.

Inverse talked with Professor Scheidel about just that: the inequality of the past and what it means for the solutions of the future.

Your idea of the “Four Horsemen” — will those always look the same going forward?

Well so much has changed over time. State collapse and plagues, they’re not currently on the table. States are much more resilient now, very difficult to dislodge unless you’re in Sub-Saharan Africa or the Middle East. We’re not going to have another Black Death … probably. Even the others don’t currently apply, right? There is no Communist Revolution on the horizon and if there’s another war, it’s not going to be a mass mobilization war with millions of people in trenches. In a sense, history is over. That raises a very big question about future mechanisms of equalization. Nobody wants the old ones to come back, but are there others that are equally powerful? If they exist, they didn’t occur in history. It doesn’t mean we can’t one day discover them or design them.

Do you think something like state collapse would take on a new form? Might we define it differently than we would have previously?

Maybe. But if you think of some lower degree of disturbance, it doesn’t seem to be enough to have an effect on inequality. The overall state as an institution is not going to go away. You could say that in the next few decades there will be more violence or violent dissent, but that’s not going to bring down the state, wholesale, in the West.

Do you think advancements in technology would be something that add to inequality?

Yeah. You can think in particular of genetics. That would be both within societies and between societies. It’s no longer totally futuristic. If you can have designer babies and you have to pay for it, that may be available only to a certain group, a particular class in a country or one country rather than another. That could create inequalities like we’ve never seen before. Now, we are still all “people,” but that could change.

Is inequality inevitable in human nature? Are we evolved to be unequal organisms?

It seems like it. You can be very reductive and say it’s all about sexual reproduction. There’s a competitive element there which favors some people wanting to have more because they out-compete others in that critical respect. It seems it’s written into our DNA. In other primates it’s the same. It’s hard work to contain inequality.

Is that the purpose that “violence” serves? To “restore hard work,” in a society where a lot of people don’t have to do it?

It’s one side effect. Think of the accumulation of wealth within households. Unless there is some major disruptive shock, it’s just going to continue. Over time that must have a disequalizing effect. There’s no alternative unless you have really high estate taxes. That’s the only way of resetting the clock every generation. But is that fair? If I worked hard to build a fortune am I not allowed to pass it on to my kids? There are good arguments on both sides.

There’s inequality built into the system without inheritance coming into play. Inheritance amplifies it. But, again, you could say, “Well, that’s within our right.” In other countries, you have more aggressive equalization. In Scandinavia, they make more attempts to intervene at that early stage and make sure people have the same schooling and healthcare.

To what extent does that work? Is a “peaceful” solution ever going to fix the problem?

No. It seems to me that peaceful mechanisms are pretty good at maintaining an even level of inequality. People say Europeans are less unequal than Americans or Japanese, but that’s really the result of these shocks that happened a hundred years ago. Because of the policies and institutions they put in place, they have been able to maintain that. There’s no good example of a society that doesn’t experience any of these serious shocks and then devises peaceful policies that break down inequality. It’s really two different things: maintaining and lowering. If you’re the U.S. and you want to lower inequality, it’s far trickier than saying, “Let’s do what the Swedes do,” because that’s really just maintaining their current levels of inequality.

Do you think if people were to conceptualize of inequality in this way, if our understanding of the problem was “mitigate” rather than “eliminate,” it would help from a policy perspective?

That’s a good question. Because you want to reach high, aim for things that are probably not going to happen, and if doing that helps you get halfway there it might be the best strategy. People don’t get terribly excited about someone saying, “Let’s do this, it will mitigate inequality by some percentage point and we’ll all be better off.” They want to vote for the candidate who says, “We’ll solve all the problems in the world in the first hundred days.” Realistically, it’s incremental, it’s in the margins, and if you keep working at it you will produce some improvement.

You mentioned education earlier. Is that, historically, something that’s been an equalizer?

Economists like to think so. I believe it is. It’s just very difficult to disentangle it from all the other things going on. Of course, if there had never been any mass education then everything would be more unequal than it is today. But many things we observe today in the U.S. have very little to do with education. If you’re in the finance sector you might have a degree in a certain field but that by itself doesn’t explain why you make so much money. The link is not nearly as strong as one would like it to be. At the same time, education can be disequalizing. If people get trapped in a bad education system, unsurprisingly that’s going to translate to more economic inequality down the line.

I’m reminded of an old German general, Helmuth von Moltke. He wrote a treatise on the nature of war and claimed that it brings out man’s best qualities. Without it, people would sink into what he called “a swamp of materialism.” This was over 100 years ago. It seems strangely prescient.

There’s something to it. Obviously nobody wants a war, but you can actually measure how it’s affected people. You have the experience of shared sacrifice. The people at home say we have to support the people abroad, and the people abroad say, “We’re all in this together.” So it does seem to increase, temporarily, solidarity. We have to share a little more because we are all part of the same group. It makes it easier to implement more radical policies. You can see that effect after both world wars.

Do you think humanity is fated to endure this push and pull with inequality for the foreseeable future.

My suspicion is yes. I think that’s the most likely outcome. We are currently in one of those phases of relative stability that are favorable for maintaining or even increasing inequality.

The term “inequality” seems charged. It tends to read as a negative. Are there positive effects in society to having some degree of inequality?

There’s good inequality and bad inequality. If you have a society where everyone makes exactly the same regardless of effort it would be a very sad society. There has to be an incentive for people to actually go and do stuff. There’s probably a minimum amount of inequality that is desirable. In Sweden and other places it’s pretty low, so it seems possible to operate a successful market economy with pretty low levels of inequality. The issue comes when it becomes harmful and can supposedly reduce economic growth. There’s always a trade-off. You want the so-called “job creators.” But how far can you take it before you end up with Rockefeller and everybody else is not well-off? It’s politicized. There’s no single answer. I think there’s a space between when inequality isn’t quite high enough and there’s little incentive and when it’s so high that it does societal harm.

This interview has been edited for brevity and clarity.