The Great Leveler, page 7
From the perspective of the study of inequality, it may not, strictly speaking, be particularly important which of these factors mattered most: to the extent that state formation introduced steep and stable hierarchies into societies with significant surpluses, inequalities of power, status, and material wealth were bound to grow. Even so, a growing consensus now holds that organized violence was central to this process. Robert Carneiro’s influential theory of circumscription holds that the interaction between population growth and warfare under conditions of territorial boundedness explains why previously more autonomous and egalitarian households, reliant on scarce domesticated food resources and unable to exit stressful environments, were prepared to submit to authoritarian leadership and endure inequality to become more effective in competing with other groups. The most recent theories and simulation models of state formation likewise emphasize the crucial importance of intergroup conflict. The critical role of violence also goes a long way toward accounting for the specific characteristics of most premodern states, most notably despotic leadership and an often overwhelmingly strong focus on warmaking.31
Not all early states were alike, and centralized polities coexisted with more “heterarchical” or corporate forms of political organization. Even so, centralized authoritarian states commonly outcompeted differently structured rivals. They appeared independently around the world wherever ecological preconditions allowed, in the Old World as well as in the Americas and across a wide range of environments from the alluvial floodplains of Egypt and Mesopotamia to the highlands of the Andes. Defying this considerable diversity of context, the best-known among them developed into strikingly similar entities. All of them witnessed the expansion of hierarchies in different domains, from the political sphere to the family and religious belief systems—an autocatalytic process whereby “the hierarchical structure itself feeds back on all societal factors to make them more closely into an overall system that supports the authority structure.” Pressures in favor of increasing stratification had an enormous effect on moral values, for the residue of ancestral egalitarianism was replaced by belief in the merits of inequality and acceptance of hierarchy as an integral element of the natural and cosmic order.32
In quantitative terms, agrarian states proved extremely successful. Although these numbers cannot be more than controlled conjecture, we can guess that 3,500 years ago, when state-level polities covered perhaps not more than 1 percent of the earth’s terrestrial surface (excluding Antarctica), they already laid claim to up to half of our species. We are on more solid ground in estimating that by the beginning of the Common Era, states—mostly large empires such as Rome and Han China—comprised about a tenth of the earth’s land mass but between two-thirds and three-quarters of all people alive at the time. Shaky as they may be, these figures convey a sense of the competitive advantage of a particular type of state: far-flung imperial structures held together by powerful extractive elites. Once again, this was not the only outcome: independent city-states might flourish at the interstices between these empires but only rarely succeeded in holding off their outsized neighbors as the ancient Greeks managed to do in the fifth century BCE. More often than not, they were absorbed into larger entities; on occasion, they built up their own empires, such as Rome, Venice, and the Mexica Triple Alliance of Tenochtitlan, Texcoco, and Tlacopan. Moreover, empires failed from time to time, giving way to more fragmented political ecologies. Medieval Europe is a particularly extreme example of this shift.33
More commonly, however, empire begat empire as new conquest regimes reconsolidated earlier power networks. In the very long run, this created a pattern of periodic unraveling and restoration, from the increasingly regular “dynastic cycles” of China to longer swings in Southeast Asia, India, the Middle East and the Levant, central Mexico, and the Andean region. The Eurasian steppe also spawned numerous imperial regimes that embarked on predatory raids and conquests, spurred on by the riches generated by sedentary societies to the south. States grew over time. Prior to the sixth century BCE, the largest empires on earth covered a few hundred thousand square miles. During the following 1,700 years, their mightiest successors routinely exceeded this limit by an entire order of magnitude, and in the thirteenth century, the Mongols’ reach extended from Central Europe to the Pacific. And territory is only one metric: if we account for secular growth in population density, we see that the effective expansion of imperial rule was even more dramatic. To an even greater extent than today, our species used to be concentrated in the temperate zone of Eurasia as well as in parts of Central America and the South American Northwest. This is where empire thrived: for thousands of years, most of humanity lived in the shadow of these behemoths, with a few coming to tower far above ordinary mortals. This was the environment that created what I call the “original 1 percent,” made up of competing but often closely intertwined elite groups that did their utmost to capture the political rents and commercial gains mobilized by state-building and imperial integration.34
Figure 1.1General form of the social structure of agrarian societies
Premodern state formation separated a small ruling class from the mass of primary producers. Though often internally stratified, this elite both transcended and collectively controlled the individual local communities that formed the basic building blocks of the state. Ernest Gellner’s famous image captures these structures with unrivaled clarity (Fig. 1.1).35
Some members of the ruling class, such as local notables who had ascended to state office or related honors, would have originated in or even remained rooted in these communities, whereas others, such as foreign conquerors, might have been sufficiently detached to form what was in effect a separate society. Centralized governance was very limited by modern standards: states commonly amounted to little more than what Patricia Crone called “protective shells” for the general population, trying to keep it out of the reach of domestic and foreign challengers to the established regime. But rulers and their agents also provided protection in the sense that mafia organizations do in modern societies, capitalizing on the profits from their preeminence in the use of organized violence. They frequently exercised a large amount of despotic power, for civil society institutions were too weak to constrain elite action, including exercise of the power over life and death and the allocation of property. At the same time, many of these states were lacking in infrastructural power, the capacity to penetrate society and implement policies widely. Communities were largely self-governing, loosely held in check by a relatively small and often distant centralized dominant authority.
Governments were semiprivate in nature and relied on the co-optation and cooperation of diverse holders of political, military, economic, and ideological power to control subordinate populations and mobilize resources for rulers. The latter tended to employ a mixture of rewards and threats of violence to preserve balance between competing elites, for government was often primarily focused on managing conflicts among the rich and powerful. Rulers, their agents, and large landowners, categories that commonly intersected, were locked in conflict over the control of the surplus that could be siphoned off through state taxes and private rents. Whereas the employment of established elite members as state officials curtailed the autonomy of rulers, recourse to subordinate agents of lower status created new elite aspirants eager to divert state income and privatize gains from office in order to join existing elite circles. Rulers strove to make power and privilege a contingent and revocable function of state service, whereas their agents sought private benefits for themselves and their descendants; in the long run, the latter often proved more successful. Corruption and other forms of predation were common. As members of the ruling class competed for position and advantage, turnover among individuals could be high, yet elite rule as such tended to be stable as long as state structures were successfully maintained. The upper classes separated themselves from commoners by their lifestyle and worldview, which were frequently martial in nature and defined leaders as the exploiters of inferior agrarian producers. Conspicuous consumption served as an important means of manifesting and reinforcing power relations.36
These basic conditions profoundly shaped the distribution of income and wealth. Reduced to essentials, history has known only two ideal-typical modes of wealth acquisition: making and taking. The advent of surplus production, domestication, and hereditary property rights paved the way for the creation and preservation of personal fortunes. In the long run, institutional adaptations that were conducive to this process, technological progress, and the growing scale and scope of economic activity raised the ceiling on individual or familial wealth accumulation, thereby increasing at least the potential range of the dispersion of income and productive assets. In principle, the cumulative effect of random shocks would have been sufficient to make some households richer than others: differences in the return on capital such as land, livestock, buildings, and resources invested in loans and trade would have made sure of that. When their fortunes changed, others would take their place.
What may well be the earliest quantifiable evidence indicative of growing wealth inequality in subelite circles that appears to have resulted from economic development comes from ancient Mesopotamia several thousand years ago. Comparison of a sample of inheritance shares for sons in the Old Babylonian period (in the first half of the second millennium BCE) with documented dowries for daughters in the Neo-Babylonian era (in the late seventh and much of the sixth century BCE, roughly a thousand years later) reveals two notable differences. Converted into wheat wages, the latter are about twice as substantial as the former. As both data sets appear to refer to the same stratum—propertied urban residents, maybe the top decile or so of the urban population—this points to greater affluence overall, especially considering that we would expect sons to be favored over daughters. Moreover, the real values of the dowries are also much more unequally distributed. Because the Neo-Babylonian period was a time of unusually dynamic economic development, this contrast is perhaps best explained by the disequalizing effect of growth and commercialization.37
But this may be only part of the story, not just in this case but more generally. It is easy to appreciate how the defining features of premodern state formation just outlined would have influenced economic activity in peculiar ways. Political integration not only helped expand markets and lowered at least some transaction and information costs: the pervasive power asymmetries that commonly characterized premodern polities all but ensured an uneven playing field for economic actors. Fragile property rights, inadequate rule enforcement, arbitrary exercise of justice, the venality of state agents, and the paramount importance of personal relationships and proximity to sources of coercive power were among the factors likely to skew outcomes in favor of those in the upper reaches of the status pyramid and those profitably connected to them. This would have been true in even greater measure of various forms of “taking” that were available to members of the ruling class and their associates. Participation in governance opened up access to income from formal compensation, benefactions of rulers and other superiors, and the solicitation of bribes, embezzlement, and extortion, and it often also provided shelter from taxation and other obligations. Senior military positions might be rewarded with a share of war booty. What is more, direct service for the state was not even a necessary prerequisite. Ties of kinship, intermarriage, and other alliances with officeholders could yield commensurate benefits. Moreover, considering the often rather limited infrastructural power of the state, personal wealth and local influence made it easier to shield not only one’s own assets from state or community demands but also those of friends and clients—in exchange for other benefits. If necessary, tax quotas could be met by shifting additional burdens onto the powerless.
Under these conditions, political power could hardly fail to exert a major influence on the distribution of material resources. In smaller and less hierarchical polities such as tribes or Big Man collectivities, the status of leaders depended in no small measure on their ability and willingness to share their bounty with the entire community. The ruling classes of agrarian states and empires generally enjoyed greater autonomy. Notwithstanding occasional and well-publicized displays of largess, the flow of redistribution tended to be reversed, further enriching the few at the expense of the many. The elite’s collective capacity to extract surplus from primary producers determined the proportion of overall resources that was available for appropriation, and the balance of power between state rulers and various elite groups decided how these gains were apportioned among state coffers, the private accounts of state agents, and the estates of the landed and commercial wealth elite.38
The same features of premodern states that funneled resources toward the powerful also served as a powerful check on the concentration of income and wealth. Predation, disregard for private property rights, and the arbitrary exercise of authority not only helped create fortunes but also could just as easily destroy them in the blink of an eye. Just as state office, proximity to power, and the favor of rulers raised the well-connected to great wealth, the machinations of rivals and rulers’ desire to curb the influence of their associates and to absorb their ill-gotten gains could just as easily rob them of their riches if not their lives. In addition to the vagaries of familial demography that help account for the survival or dispersal of private estates, violent redistribution limited the degree to which resources came to be concentrated within elite circles.
In practice, outcomes varied widely across historical societies. Mamluk Egypt in the Middle Ages occupied one end of the spectrum. A foreign and nonhereditary conquest elite collectively claimed control of the land, which was allocated to members of the state class contingent on their position within the power structure, which was subject to frequent adjustments. This made access to resources fluid and unpredictable, for violent factionalism ensured high turnover. At the other end of the spectrum, feudal societies having weak rulers, such as Spring and Autumn China or medieval Europe, allowed lords to enjoy relatively secure control of their assets. The same was true of the Roman Republic prior to its terminal crises, when aristocrats collectively ruled the polity for their own benefit and were appropriately keen to uphold private property rights. Most premodern societies, and more than a few contemporary developing countries, fall in between these ideal-typical extremes, combining sometimes violent political intervention in private property relations with a measure of respect for personal wealth. I explore this relationship in greater detail in the following pages.39
Rents from access to political power are not exclusive to low levels of development. A recent study of dozens of super-rich entrepreneurs in Western countries shows how they benefited from political connections, exploited loopholes in regulation, and took advantage of market imperfections. In this respect, the difference between advanced democratic market economies and other types of states is a matter of degree. In some cases, it may well be possible to estimate how much elite fortunes owed to income from sources other than economic activity: if we are able to tell that Roman aristocrats of the second and first centuries BCE were simply too rich to have built up their wealth by farming and commerce alone, then more specific breakdowns ought to be feasible for more recent historical societies. Ancien régime France, which I briefly discuss later in this section, is merely one example. In the most general terms, there can be little doubt that personalized political connections and favors made a much larger contribution to elite wealth than they do in developed countries today. Rent-seeking elites in Latin America or Africa may come somewhat closer to what in global historical terms must count as traditional and indeed “normal” strategies of wealth appropriation and concentration. So do contemporary Russian “oligarchs,” who resemble some premodern elite groups in the extent to which both the creation and the preservation of their fortunes have depended on personalized political power relations. Even allowing for considerable diversity of context, Russian credit card tycoon Oleg Tinkov’s description of his peers—“temporary managers of their assets—they are not real owners”—applies in equal measure to the precarious standing of many of their predecessors from ancient Rome and China to the monarchies of early modern Europe.40
Piketty has sought to explain the very high levels of wealth inequality that were typical of eighteenth- and nineteenth-century Europe with reference to the large gap between the rates of economic growth and return on capital (“r >
