Inequality as the Engine of History

Learning from the Past

Over two and a half centuries ago, in his influential essay “A Discourse on the Origin and Basis of Inequality Among Men,” Jean-Jacques Rousseau presented a persuasive argument: primitive human societies prior to the advent of agriculture, approximately 10,000 years ago, were inherently egalitarian. Rousseau argued that the productive structure of agricultural societies were the primary catalysts for the emergence of inequality. The rationale was straightforward: in agricultural societies, individuals with greater strength and abilities would have the opportunity to produce and retain surplus resources. For the Genevan philosopher, this process led to the creation of private property, thereby initiating a process of accumulation of material wealth. During my undergraduate studies in Mexico, I encountered Rousseau’s argument for the first time. Its simplicity and logical reasoning made it widely accepted, and it was generally regarded as an indisputable truth.

However, archaeologists, anthropologists, historians and economic historians recently have provided compelling evidence suggesting that Rousseau’s assertion may not be entirely accurate. Even among hunters and gatherers,inequality existed.

Historians generally avoid positing universal laws applicable to all periods and societies. Virtually every historian would argue that history is contingent, characterized by accidents, specific contexts, and although structures play important roles, history is unsuitable for generalization. Nevertheless, risking the chastisement of the goddess of history Clio, I will argue that inequality is a general property of all human societies, and therefore, one of the great engines of historical change. I will try to avoid excessive generalizations while focusing on a broad periodization of the past 11,000 years.

Analyzing the available data from estimates or reconstructions of wealth distributions from various sources across numerous societies since 9,200 BCE to the present, one conclusion appears inescapable: if “universal laws” indeed exist, one of them would be that inequality exhibits an unequivocal propensity to increase over time, irrespective of geographical location. Here, I do admit a challenge shared with the rest of the historical inequality research community: the lack of the comparability of estimates among different societies and different sources. Currently there are ongoing efforts to harmonize such vast array of estimates.

Figure 1: Wealth inequality’s tendency to grow over time. Note: From 9200 BCE to 1700 CE the data points represent primarily cities. From 1800 to the present, it represents countries. Source: Uppsala History of Inequality and Labor Lab (UHILL) harmonized data.

Figure 1 presents a crude periodization, a chronology, spanning from the Neolithic era and the advent of agriculture to the long 20th century, encompassing the initial years of the 21st century. Notably, in the past 11,000 years, we have observed relatively few instances of systematic declining wealth inequality. These remarkably few episodes include the aftermath of the Black Death, which resulted in a massive annihilation of human life, and consequently a favorable change in the relative price of land and labor for those who survived, and the 20th century, characterized by the immense destruction of the two world wars but also by the emergence of progressive politics and welfare states. It appears that inequality tends to increase as wealth is created and accumulated, along with economic growth and progress, even if this progress is very slow, as exemplified by societies trapped in the Malthusian trap (When population growth strains resources, i.e. food, incomes, etc., leading to collapse, society traps itself in a cycle of recovery and decline.) during pre-industrial times. If this interpretation is accurate, then a pertinent question arises: what factors facilitate the persistent reproduction of inequality over time?

The economist Sam Bowles and the economic historian Mattia Fochesato propose in a recent study that a confluence of technological, climatic, demographic, and institutional factors explains the significant inequality between the paleolithic and classical antiquity. The development of agricultural technology did not have an immediate impact on the creation of surpluses. Rather, as the technology progressed, the institutions of hunter-gatherer societies continued to play a role in partially mitigating the rising tendencies towards inequality. They draw similar conclusions regarding demographic and environmental factors, such as population density, which influenced land availability and, consequently, altered the food production choices of these societies.

This account is important to understand how the accumulation of wealth is intrinsically connected to technological change, demographic pressures, the environment and political or institutional contexts. This connection of wealth production and accumulation to these all-other factors makes the distribution of economic resources, in this case of wealth (broadly understood as material assets plus capabilities readily available for use by an individual, household or group), critically connected to the historical development of all societies.

To emphasize this point and underscore the significance of wealth accumulation as a systemic feature of human societies and, therefore, inseparable from their historical trajectory, I want to draw upon a theory developed by one of the preeminent social scientists of the 20th century, Charles Tilly. Tilly argues that four mechanisms make inequality persistent over time: exploitation, opportunity hoarding, emulation and adaptation. Although the four mechanisms are key to understand Tilly’s theory of persistent inequality, the first two, exploitation and opportunity hoarding (exclusion) are the most helpful to understand Figure 1.

Exploitation refers to the control of resources by a group within society. In this case resources can be labor, food and all type of material goods or services that are necessary to the subsistence of the society. The ones doing the exploitation can extract surpluses from the exploited. Opportunity hoarding in its turn, refers to the capacity of a society to exclude others from having access to a resource. These mechanisms have been present in all types of societies even in pre-agricultural ones. The unequal distributions of wealth we observe in places such as Catalhoyuk in present day Anatolia (9,200 BCE) with a Gini index of 0.28, Tepe Gawra in present day Iraq (4000 BCE) with Gini of 0.46, the Roman city of Pompeii (79 CE) with a Gini of 0.54 or countries such as present-day Mexico (as estimated by Credit Suisse) with a Gini of 0.90 tell a history of exploitation and opportunity hording albeit, with events playing according to their own historical contexts (Gini index is a widely used economic term that measures inequality, with 0 being perfect equality) .

Readers may validly object to the comparison of such distant and present societies in several ways. However, one crucial aspect to consider, the key point, is that all these societies were highly unequal. A Gini coefficient of 0.28, very low in present days, in such a society would likely be exceptionally high, as most of the population was at the subsistence level, resulting in limited surplus extraction and accumulation by groups or individuals. This situation differs from present societies, in which we typically observe high levels of wealth inequality. This is because most present-day societies have a standard of living above subsistence, and modern economies generate substantial surpluses that can be extracted and accumulated more readily. What is common to all high unequal societies regardless of their period and location is the existence of exploitation and exclusion.

This universality of inequality as a feature of human history through the shared experience of exploitation and exclusion is the reason why we can encounter preoccupations about inequality in classical literature. At least from classical Greece to the present, inequality of wealth has always been related to the ideas of justice and power. Polyneices, the son of Oedipus and Jocasta in Eurupides’ Phoenissae decries, “It has been said for a long time, but I will say it anyway: wealth is most valued by men, and of all things in the world it has the greatest power. This I have come to secure at the head of my great army; for a man well-born but poor is worth nothing.”

Exploitation and exclusion are simultaneously a source and a byproduct of violence, and violence for the lion’s share of human history has been another feature of human societies. Nevertheless, inequality does not invariably lead to violence; it remains a fundamental question in the social sciences how historically highly unequal societies have managed to avoid episodes of organized violence.  Perhaps the explanation is ideological, a different understanding of justice that viewed high inequality as more acceptable.

Jumping a few millennia in the chronology in Figure 1, the 20th century presents something remarkable a long period of systematic equalization. A significant portion of the progress we have made in achieving equality during the 20th century is directly and undeniably attributable to the important uprisings that created the conditions for social conquests. It is challenging to isolate the strengthening of the global labor movement, the establishment of welfare states and the expansion of education from the economic, technological and political events of the past century.

Can we envision labor rights in Mexico or the complete abolition of slavery in the Yucatán Peninsula without the Mexican Revolution? Can we picture the growth of the labor movement and the eventual establishment of the welfare state in Western Europe or the improvements in social security in the United States without the October Revolution, the Great Depression and the two world wars? Can we explain the big revolutions without an ideological shift that condemns high inequality, exploitation and exclusion? The distribution of wealth and income interconnects all these events, as economic resources are frozen by prevailing political economy arrangements in a society. To some extent, all great revolutions starting with the French Revolution can be considered reactions against exploitation and exclusion or the consequences thereof.

Figure 2: Revolutions and its distributive effects. Source: Castañeda Garza, D. (2024). Desiguales: Una historia de la desigualdad en México. Penguin-Random House, Mexico.

In light of the long-term trend of increasing inequality, the eleven millenniums of secular inequalization, the 20th century is likely an anomaly, a period of exception that signifies progress. However, inequality is once again on the rise, as if the great compression—the leveling of wage inequality—was merely a temporary truce. If we acknowledge that exploitation, exclusion or inequality is a potent force in history, then as the beneficiaries and heirs of the most progressive era, we bear the responsibility to learn history’s lessons of how we accomplish such feat. Equality has never been inexpensive; it has always entailed substantial costs. In an era when our societies are rapidly converging towards plutocracy and oligarchy, and when our egalitarian principles are waning, it is imperative that we remember that progress entails greater collective organization, more public services, more education, more labor rights, and in a truly civilized way, less violence in all its forms.

A famous anecdote tells us that in response to viewing and acquiring Paul Klee’s painting “Angelus Novus,” Walter Benjamin articulated his philosophical perspective on progress, later outlined in his thesis on the philosophy of history. He conceptualized progress as a dynamic force that relentlessly erases the past, accumulating a layer upon layer of debris as it propels itself forward. He named his allegory the “angel of history,” the relentless destruction of the past, coupled with the attempt to construct a better future or as it moves towards “Progress.” As we approach a new era of high inequality, let us hope that inequality does not propel us back, even if momentarily, to the worst of our past. 

Diego Castañeda Garza is a postdoctoral researcher in the Department of Economic History, Uppsala University, Sweden.