War and Inequality

Summarizing the argument of Walter Scheidel’s The Great Leveler, the Economist reports: “inequality within countries is almost always either high or rising, thanks to the ways that political and economic power buttress each other and both pass down generations. It does not, as some have suggested, carry within it the seeds of its own demise.”

Inequality can be reduced, but historically, “only four things, Mr Scheidel argues, cause large-scale levelling. Epidemics and pandemics can do it, as the Black Death did when it changed the relative values of land and labour in late medieval Europe. So can the complete collapse of whole states and economic systems, as at the end of the Tang dynasty in China and the disintegration of the western Roman Empire. When everyone is pauperised, the rich lose most. Total revolution, of the Russian or Chinese sort, fits the bill. So does the 20th-century sibling of such revolutions: the war of mass-mobilisation.”

During the twentieth century, inequality was reduced largely through war: “mass-mobilisation warfare was the defining underlying cause of the unprecedented decrease in inequality seen across much of the Western world between 1910 and 1970 (though the merry old Great Depression lent an unusual helping hand). By demanding sacrifice from all, the deployment of national resources on such a scale under such circumstances provides an unusually strong case for soaking the rich. . . . Income taxes and property taxes rose spectacularly during both world wars (the top income-tax rate reached 94% in America in 1944, with property taxes peaking at 77 percent in 1941). Physical damage to capital goods slashed the assets of the wealthy, too, as did post-war inflations. The wars also drove up membership in trade unions—one of the war-related factors that played a part in keeping inequality low for a generation after 1945 before it started to climb back up in the 1980s.”

It’s a depressing conclusion, especially for egalitarian progressives, and especially if they have pacifist inclinations that inhibit them from starting global conflicts.