Reading Notes

Introduction

Several dimensions of equality:

Research has been limited by the manual work required.

Inequality is first of all a social, historical, and political construction. New tech has made it possible to make the study on longer timelines and several dimensions.

Two main lessons:

  1. Inequality results from human constructs (political in nature, determining the distribution of power). Societies structure themselves, with rules that are reversible in nature.
  2. Tendency toward equality since the end of 18th century that has been a consequence of revolts and large scale crisis (e.g French revolution, Slave revolt, American civil war, ...).

Shift towards equality, but limited in scope. Health, education, access to food and water, progressive taxation, equality before the law - but they are suffering from internal inequalities and discrimination.

Equality is especially important given the declining ecology, which disproportionally impacts the poorest in the poorest countries because of the richest's way of life.

Although it is easy to denounce the inegalitarian or oppressive nature of established institutions and governments, it is much harder to agree on the alternative institutions that will make it possible to make real progress toward social, economic, and political equality, while at the same time respecting individual rights, including the right to be different.

Resistance by elites is an ineluctable reality today, in a world in which transnational billionaires are richer than states, much as in the French Revolution. Such resistance can be overcome only by powerful collective mobilizations during moments of crisis and tension.

There is no consensus per what a "good" system would be, and breaking the existing one is only a necessary condition, not a sufficient one, to establish a more just and equal system.

The communist regime in USSR is such an example, that made advances in education, health, industry ; across the world (without the pressure of communism, social security across the world would likely not have progressed as quickly). But the sanctification of the power relationship and certainty of ultimate truth resulted in totalitarianism disaster and oppression.

Movement towards equality.

From 20% of newborn dead in the first year in 1820 to 1% today. Small minority expecting to live to 50y in 1820 to the norm today. Less than 10% of literacy in 1820 to >85% today. Less than 1y average education in 1820, to 8y today, and more than 12y in the richest countries (more than 1/2 attended university in the richest countries). Income adjusted for inflation shifted from less than 100E monthly to 1000E today.

Exponential growth of the human population, due by both better health, survival of more children, and longer life expectancy (said otherwise: if more of your children survive, and you yourself live longer, then there's much more people alive at the same time). 600M humans in 1700 to 7.5B in 2020. Current growth would leave 70B humans by 2300 and 7000B by 3000, which is neither plausible nor desirable.

National income vs. Gdp takes into account wear and tear. If including carbon emissions, a positive gdp can become negative national income

Look at stuff through Intelligible scales (proportions rather than absolute values for example )

Even though poverty didn't decline by much, poorest became less at the mercy of property owners

Heritage of slavery and colonialism

Slavery and colonialism are at the root of a lot of today's inequality. Even when they stopped, their effect lasted longer.

Once freed, the difference in property caused the inequality we know today.

Discussion around reparations are necessary. Notably, some of the largest capitals were built on the back of slave ownership, and fortunes are inherited. Today's large corporation should be taxed to build reparations.

Revolutions, status and class

Privileges didn't end with revolutions. Families who were better off before revolutions are still better off after. During French revolution, liquidation of church assets went to the wealthy. Privileges were bought back. As a result, wealth of the top and higher middle class grew, but for the lower class, things staid pretty much the same (apart from justice, which was transferred from a local dictatorship to a more centralized one).

Suffrage was censitary for a long time (linked to wealth). Any attempts of reforming the system internally has always been limited by people already in power adding provisions to prevent power from escaping them. In most places, the move to a more universal suffrage happened through crisis and struggles, and by ignoring the rules in application at the time. For example, the French national assembly didn't have the rights to replace monarchy by a republic - but it happened anyway.

Today even though at a government level things can be more democratic in some countries, they remain very dictatorial in the corporate world. The idea that property of the means of production confers powers onto labour is actually not a natural one. In the past, power were usually split equally between associates rather than proportionally to their level of ownerships. Some countries (germanic and slavic) have rules that force having employee representatives in boards - sometimes up to 50%. However this tends to be limited by rules baked in to re-transfer power to owners. Property rights are even written in the human rights in France, which would potentially prevent this to happen.

The great redistribution

Between 1914 and 1980 inequality in wealth was reduced significantly in the western world (it has been slowly reconcentrating since then). Notably thanks to the welfare state, through education and health. It mostly contributed to the creation of a patrimonial middle class.

Tax progressivity helped redistributing wealth and income. It also altered the social contract (collective acceptance of higher taxes and socialization of health). Where historically tax was applied mostly on the poorer part of the population in various forms. It was introduced in most countries as its purest form (progressive tax brackets).

Since then most countries introduced loop-holes that removed real progressivity. The wealthiest people sometimes succeed in paying taxes at lower rates than lower classes ; similarly for companies.

History shows that wealth and income inequality has no effect on economic dynamism. Strongly progressive taxation had no effect on innovation and productivity. Borderline confiscatory tax policies have been a success for equality in that sense.

Beyond a certain level of inequality, repeatedly increasing differences in income and wealth has clearly had no positive effect on economic dynamism. In sum, all the data at our disposal today suggest that virtually confiscatory tax rates have been an immense historical success. They have made it possible to greatly reduce the divergences of fortunes and incomes, while at the same time improving the situation of the middle and lower classes, developing the welfare state, and stimulating better economic and social performance overall. Historically, it is the battle for equality and education that has made economic development and human progress possible, and not the veneration of property, stability, and inequality

Foreign assets constituted a large portion of the upper class