Monday, November 26, 2007

Inequality - Adjusted for time and place

Branko Milanovic, Peter Lindert and Jeffrey Williamson, economists from the World Bank have been doing some comparative studies of inequalities of wealth. They have found

... that income distribution within a modern society is much the same as income distribution in imperial Rome, or England and Wales at the time of the glorious revolution. It’s not that there is no variation at all, but that modern societies are as different from each other as from ancient societies.

For example, imperial Rome’s income distribution looks like that of the modern US; China in 1880, like Sweden today, was rather equal; England in 1688 was more unequal than imperial Rome, but modern Brazil is worse still.

This is unexpected, not least because modern societies have the potential to be far more unequal than anything the Romans could have dreamed of. That’s because the richer a society is, the more unequal it could be without its working class starving to death. Prehistoric societies were, by necessity, fairly equal: there wasn’t enough societal wealth to make anybody very rich.

Modern Tanzania seems more equal than modern America, but Milanovic and his colleagues point out that it is as unequal as it could possibly be without mass starvation. The Democratic Republic of Congo is about as unequal as the US, but that is far more than the country can stand – hence the enormous loss of life through war, malnutrition and disease.

No comments: