Around 100 BC, a Roman nobleman calculated that it took about 100,000 sesterces a year to live comfortably. That was roughly 200 times the amount of money a poor city dweller needed to eke out a living. If an American needed the same multiple of the subsistence income to join the upper middle class today, the threshold would be $3.5 million. The United States economy has become less equal lately, but it remains much more egalitarian than the ancient Roman Republic.
The modern news on economic inequality is much more good than bad. The good news is very good. The greatest moral problem caused by inequality – the unequal access to the most basic economic goods, those which support life – has become less severe. The portion of the total population that suffers from this bottom-inequality is probably the lowest ever in history.
True, we do not know how many ancient Romans were on the wrong side of the bottom-inequality, but statistics for the most recent decades are encouraging. In 1970, 26 percent of the world’s population suffered from hunger, according to the UN’s Food and Agriculture Organisation. The proportion is now 13 percent – still scandalously high, but the gain in food-equality is clear. Nor is food an isolated example. Electricity is a relative new development, but the Soviet dream of universal electrification has already nearly become a reality; more than 80 percent of the world’s population can plug in, according to the International Energy Agency. Health care and sanitary living conditions are now considered basic goods – and access to them has become more equal. The average life expectancy at birth is 65 or above in countries accounting for roughly 80 percent of the world’s population.
The bad news is on the other end of the income spectrum. There has been an increase in top-inequality – a widening gap between the elite and the rest – in the United States, the UK and a few other countries. The bottom 90 percent in the United States are not exactly suffering; they have been getting richer on average for the last few decades. But the rich, especially the very rich, have been getting richer much faster. The top 10 percent of earners took in 32 percent of the nation’s total income three decades ago. That has risen to 46 percent. The share taken by the top 1 percent has more than doubled, from 8 to 18 percent, according to the World Top Incomes Database. In the UK, the newly published report from the High Pay Commission points out that the top 0.1 percent’s portion has multiplied from 1.3 to 6.5 percent.
The increase in top-inequality is bad in principle. People are not different enough in their abilities or in their dedication to work to justify the recent increases in the gap between rich and relatively poor. The damage can be seen in practice. The commission makes a good case that top-inequality reduces social solidarity, making companies less efficient and slowing GDP growth. It also points out, along with the book The Spirit Level, that greater top-inequality is associated with societies which have more health and behavior problems.
Still, there are four mitigating factors:
First, the allocation of wealth within a society is usually best left to the collective judgement of that society. The people have not, not yet at least, definitively rejected the widening gap between rich and poor. That suggests the problem is not widely perceived as grave.
Second, the elite just might be able to do some good with their extra resources. The ancient Romans offered bread and circuses and renaissance princes sponsored artists. In modern industrial societies, the financially secure elite could be a helpful alternative to governments for cultural, social and economic initiatives.
Third, whatever the evil caused by top-inequality in rich societies, it is much less significant than the good news on bottom-equality. As the American and British masses get richer, it becomes harder to argue that they lose out in a morally significant way when the elite gain. Even the poverty which causes the social problems identified by The Spirit Level is arguably more spiritual and social than strictly material.
Finally, if the people do decide that the recent increase in top-inequality is unjust, the trend can be reversed with much less trouble than bottom-inequality. Major social changes are required to increase crop yields or trade in the remaining deprived parts of the world, but the rich can be curbed fairly easily in developed economies. Choose from the following list: shame, taxes, limits on the range of pay inside companies or income caps in the particularly lucrative financial sector. Even for the very rich, the sacrifices needed to reduce inequality would be mild. As Bill Gates pointed out, more money stops meaning much after the first few millions. In his words, “it’s the same hamburger”.
I’d make a poor politician but that is beside the point. You would make a better one – you are a smoother talker. Reagan may have inspired a lot of people but what really won them over were tax cuts and the now questionable economic philosophy of neoliberalism.
Garbage in – garbage out has been a rule of the computer programmers. I am not saying it always pumps out garbage. I just can’t tell many times. This was a subject of other posts.
The basic subject of this article is inequality. I sent an article to someone recently about the Belgian elections and he sent back a reply that no government means no corruption and that the wealthy can rule their neighborhood in a paternalistic way. I don’t know how he arrived at that conclusion but the social situation he describes is too like a very romanticized version of Mario Puzzo’s godfather, Don Corleone. The Godfather was his own government.
The first Godfather was somewhat humane but the second one was becoming a more ruthless monster. You really must read the Old Roman histories of the Imperial period in translation if you haven’t already. I cannot stress how corrupt the military regime actually was. The system was a killing machine and could turn its gaze on anything. It never spared the leaders or those who profited most. Maybe it was smart. Few of the emperors were able to live as long as a one-term president. The Pax Romana was followed by 100 years of civil war.
There are better ways to describe the “mood swings” of the ancient roman civilization. Europeans have been drinking wine for centuries and they were not introducing lead into the mix. That struggle for balance of power, or territory, or wealth and autonomy and civil rights has characterized their history for the past 2000 years.
The history of the Roman Empire and the histories of many other historic empires all tend to resemble each other in many ways and they all differ just enough to defy easy characterization. Roman history was also a primer for later periods. We haven’t ever tried to look at Chinese dynastic history or the empires of the Middle East. This country disliked a standing army during its founding years. The Roman imperial army was a volunteer army too.