What Is the Relationship Between Income Inequality and Revolution?

A pair of interesting-looking papers, particularly interesting when paired, about income inequality and its relationship (or not?) to revolutions. From “Russian Inequality on the Eve of Revolution,” by Steven Nafziger and Peter H. Lindert:

Just how unequal were the incomes of different classes of Russians on
the eve of Revolution, relative to other countries, to Russia’s earlier history, and to Russia’s income distribution today? Careful weighing of an eclectic data set provides provisional answers.    We provide detailed income estimates for economic and social classes in each of the 50 provinces of European Russia.  In 1904, on the eve of military defeat and the 1905 Revolution, Russian income inequality was middling by the standards of that era, and less severe than inequality has become today in such countries as China, the United States, and Russia itself.  We also note how the interplay of some distinctive fiscal and relative-price features of Imperial Russia might have shaped the now-revealed level of inequality.

And from “American Incomes 1774-1860,” by Lindert and Jeffrey G. Williamson:

Building what we call social tables, this paper quantifies the level and inequality of American incomes from 1774 to 1860.  In 1774 the American colonies had average incomes exceeding those of the Mother Country, even when slave households are included in the aggregate. Between 1774 and 1790, this income advantage over Britain was lost, due to the severe dislocation caused by the fight for Independence. Then between 1790 and 1860 US income per capita grew even faster than previous scholars have estimated.  We also find that the South was initially much richer than the North on the eve of Revolution, but then suffered a severe reversal of fortune, so that by 1840 its white population was already poorer than free Northerners.  In terms of inequality, our estimates suggest that American colonists had much more equal incomes than did households in England and Wales around 1774.  Indeed, New England and the Middle Colonies appear to have been more egalitarian than anywhere else in the measurable world. Income inequality rose dramatically between 1774 and 1860, especially in the South.

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  1. Bob says:

    The common thread between the two revolutions is an oppressive imperial power desperate to maintain control over its people.

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    • Jason says:

      I am not sure that I agree about British rule being comparably oppressive to Tsarist Russia (or France or others). I think our founding fathers are heroes because they capitalized on a risky opportunity to improve our government and way of life, but they also used the “oppressiveness” of King George as a propaganda tool as much as anything. Government of the American colonies was not ideal and not entirely fair, but it did not come anywhere close to the oppression experienced in some of the other countries where revolutions have occurred.

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  2. Robert Frank says:

    Great stats! Would be interesting to see similar measures for France 1789.

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  3. tylerh says:

    Be very careful with using historical inequality — it means very different things in different place.

    In cotemporary American, inequality that means you have to take the bus while I decide which german car to drive.

    In colonial America, inequality meant I had firewood for my hearth, while you tried to avoid freezing to death.

    In Tsarist Russia, inequality meant I could afford meat and visit to the doctor while you watched your child die.

    Qquantitative data is always welcome, but numbers can obscure as much as they hide.

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    • aepxc says:

      Wealth measures the fraction of total human capabilities that a given individual is able to claim for his or her own goals and interests. In that respect, “rich” and “poor” are necessarily relative concepts… and this is actually well reflected in what we know about human desire and happiness. Thus, if the only difference in inequality is one of marginally better modes of transport, then either human capabilities are small or the level of inequality is low. Sure, the floor of what one has to suffer in a modern, Western economy has risen significantly over the past centuries. What still remains relevant, however, is not the floor, but the gap. The ceiling for what one can do with a billion bucks is not limited to nice German cars.

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      • Eric M. Jones says:

        The only way to comprehend a really big pile of dollars is “Opportunity Cost”; that is, what you could buy with the money. What could one do with a billion dollars? A billion dollars is more than all the Alaskan gold mined in 2010—more than a stack of gold bars 1.13 meters on a side. Just five percent of that billion dollars ($50 million) would get you: A lifetime lease on a private bizjet at your beck and call—Plus a home, condo or apartment in ten major exotic destinations, with 3 luxury cars at each—Plus a coterie of servants to follow you around—Plus memberships in every exclusive club you might want—Plus all you could possibly eat, wear, play with and see for a lifetime. And hell, throw in a leased luxury yacht. Then you could sail around sipping expensive booze imagining ways to spend your remaining $950-million dollars.

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      • James says:

        “Then you could sail around sipping expensive booze…”

        But why would I want most of that? I can’t tell the difference between expensive booze & the cheap stuff, and rarely have more than one drink anyway.

        On the other hand, a billion dollars or so might let me start my own space program, found an electric car company, revitalize American railroads, fund work on vaccines for obscure diseases…

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      • gevin shaw says:

        The economy is not all of society. The inequality the American Revolution addressed was an inequality of representation, not of wealth or income. We wanted a say in how we would be taxed and what those taxes would be used for equal to the say of subjects in England.

        The current discussion about inequality is about the definition of the bottom margin of acceptable inequality. We know what this country can afford for all its citizens because that’s what we had for more than half a century—food, education and opportunity, a comfortable retirement, access to medical care. For the past quarter century, even though the economy has continued to grow, more and more of us have been dropped below that floor, while fewer and fewer of us have done better and better.

        It is a return to an equitable inequality that is necessary for the well being of the country and us.

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  4. vidgro says:

    Revolutions happen when those with power are no longer able to govern in the old way and peoples are no longer able to live in the old way. People protest and the rulers either attack their own people (never a good long term approach) or they give up power and someone else takes charge. However, I think the definitions need to be clearer: what do we mean by revolution? when can a revolution be regarded as victorious or defeated? A nationalist revolution is different to a bourgeois revolution is different to a working-class revolution is different to a peasants’ revolution, etc. What if the revolution is hijacked or sidetracked of partially defeated? There are so many social and political questions involved that economic determinism gives us only a small part of the picture.

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  5. Robin Hanson says:

    I posted on those exact same two articles four days before this post. http://www.overcomingbias.com/2012/09/inequality-doesnt-cause-revolt.html
    Coincidence, or a missing hat tip?

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