George F. Will |
WASHINGTON
Tight labor markets shrink income
inequality by causing employers to bid up the price of scarce labor, so
policymakers fretting about income inequality could give an epidemic
disease a try. This might be a bit extreme but if increased equality is
the goal, Stanford's Walter Scheidel should be heard. His scholarship
encompasses many things (classics, history, human biology) and if
current events are insufficiently depressing for you, try his
just-published book “The Great Leveler: Violence and the History of
Inequality from the Stone Age to the Twenty-First Century.” Judge this
book by its cover, which features Albrecht Durer's woodcut “The Four
Horsemen of the Apocalypse.”
The tendency in stable, peaceful and
prosperous societies is for elites to become entrenched and adept at
using entrenchment to augment their advantages. The most potent
“solutions” to this problem are unpleasant. They are disruptions such as
wars, revolutions and plagues that have egalitarian consequences by
fracturing society's crust, opening fissures through which those who had
been held down can rise. Scheidel says that mass-mobilization wars give
the masses leverage and require confiscating much wealth from the
comfortable. Revolutions can target categories of people considered
impediments to the lower orders, e.g., “landlords,” “the bourgeoisie.”
And the Black Death century was particularly helpful.
By killing between 25 percent and 45
percent of Europeans in the middle of the 14th century, Scheidel
explains, the bubonic plague radically changed the ratio of the value of
land to that of labor, to the advantage of the latter. The well-off
were not amused. In England, the Chronicle of the Priory of Rochester
noted that “the humble turned up their noses at employment, and could
scarcely be persuaded to serve the eminent for triple wages.” The king
decreed wage controls but the canon of Leicester dourly noted that “the
workers were so above themselves and so bloody-minded that they took no
notice of the king's command.”
Today's milksop egalitarians probably will
flinch from such a robust attack on inequality, assisted by the rats
that carried the fleas whose intestines carried the bacterial strain.
But, then, what really is the problem of inequality? The Cato
Institute's Michael Tanner, noting the “highly redistributive” nature of
America's economy and government, refutes four myths about economic
inequality.
The first, that inequality has never been
worse, ignores taxes, transfer payments and changes in household
composition. In 2013, America's top 1 percent of earners paid 25.4
percent of all federal taxes, which fund more than 100 anti-poverty
programs, dozens of which provide direct cash or in-kind grants to
individuals. Combined spending by federal, state and local programs
approaches $1 trillion. In 2012, families in the bottom income quintile
(less than $17,104 in earned income) received net government benefits of
$27,171. According to the Congressional Budget Office, accounting for
taxes and transfer payments reduces inequality almost 26 percent.
The second myth, that the rich inherit
rather than earn their money, is true of fewer than three in 10 American
billionaires, a third of whom are either first-generation Americans or
were born elsewhere. And the percentage of the Forbes 400 list of
richest Americans who grew up wealthy has fallen from 60 percent in 1982
to 32 percent today. Of America's “1-percenters,” fewer are in banking
or finance (14 percent) than are doctors or other medical professionals
(16 percent).
The third myth, that the rich stay rich and
the poor stay poor, is refuted by this historic trend: 56 percent of
those in the top income quintile will drop from it within 20 years.
Barely one-half of the top 1 percent of earners are in that category for
10 consecutive years. And, says Tanner, “One out of every five children
born to parents in the bottom income quintile will reach one of the top
two quintiles in adulthood.”
The fourth myth is that more inequality
means more poverty. For example, in the mid-1990s, inequality was
unusually high but basic measures of poverty showed significant
decreases.
The fact of inequality is a hardy
perennial; inequality is a problem when, and to the extent that, a
critical mass of people decide that it is. When developed nations live
in what Scheidel calls “a world without horsemen” — without revolutions,
mass-mobilization wars, epidemic diseases — reducing inequality is the
province of governments, which know, or by now should know, how little
leverage their policies have on income distributions driven by vast
economic forces
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