The Great Leveler

The Great Leveler Plot Summary

Introduction

Throughout human history, the gap between rich and poor has fluctuated dramatically. Imagine ancient Rome, where wealthy senators owned estates spanning continents while the poor crowded into dangerous tenements. Or picture medieval Europe after the Black Death, when peasants suddenly found themselves able to demand higher wages as labor became scarce. What forces have shaped these dramatic shifts in inequality? The answer reveals a disturbing pattern that challenges our understanding of social progress. This book uncovers a provocative historical truth: significant reductions in inequality have almost always resulted from catastrophic events. Wars, revolutions, state collapses, and deadly pandemics have been history's great levelers. By examining evidence from prehistoric societies through modern times, we discover how violent upheavals have repeatedly compressed the distribution of wealth and income. This exploration offers crucial insights for anyone interested in economic inequality, historical patterns of social change, or the complex relationship between violence and economic structures. The historical evidence presented challenges many comfortable assumptions about how societies become more equal.

Chapter 1: Prehistoric Equality to Early Inequality: The First Wealth Divides

For roughly 95% of human existence, our ancestors lived as hunter-gatherers in relatively egalitarian small bands. Archaeological evidence from these prehistoric societies shows minimal material differences between individuals. While some members might have enjoyed higher status based on hunting prowess or wisdom, they couldn't accumulate significant wealth differences in these mobile societies where sharing was essential for survival. The Neolithic Revolution around 10,000 BCE changed everything. As humans settled down to farm, they could accumulate surpluses, property, and wealth. Early agricultural settlements show the first signs of significant inequality - larger houses for elites, differential burial goods, and specialized luxury items. At Çatalhöyük in Turkey, one of the earliest proto-urban settlements dating back almost 10,000 years, archaeologists have found clear evidence of wealth disparities in household goods and burial practices. By 5,000 BCE, some individuals were being buried with hundreds of times more wealth than others in the same communities. The emergence of the first states around 3500-3000 BCE in Mesopotamia, Egypt, and elsewhere dramatically accelerated inequality. These early states developed sophisticated mechanisms for extracting resources from the population. In ancient Sumer, clay tablets document how kings and temples amassed vast landholdings while ordinary farmers often fell into debt bondage. When harvests failed, peasants would borrow grain at high interest rates, eventually forfeiting their land and sometimes even their freedom when unable to repay. The development of writing itself was largely motivated by the need to track these economic relationships. War and conquest became powerful engines of inequality. Successful military leaders could capture slaves, land, and treasure. In ancient societies from China to Rome, military expansion created opportunities for elites to amass unprecedented fortunes. The Roman general Crassus, for example, accumulated wealth equivalent to the annual tax revenue of the entire Roman Empire. These early patterns established a template that would repeat throughout history: state formation and expansion created opportunities for elites to concentrate resources on a scale impossible in stateless societies. The development of hereditary aristocracies institutionalized these inequalities across generations. Elite families developed sophisticated strategies to maintain their position - strategic marriages, legal protections for inheritance, and control of political institutions. By the time of classical civilizations like Rome, Greece, and Han China, society had become highly stratified, with vast gulfs between aristocrats, commoners, and slaves. This pattern of increasing inequality would persist for millennia, interrupted only by catastrophic events that periodically reset the economic balance.

Chapter 2: The Great Compression: How World Wars Destroyed Elite Wealth (1914-1945)

The period from 1914 to 1945 witnessed the most dramatic compression of economic inequality in recorded history. Before World War I, wealth concentration had reached extraordinary levels across the Western world. In Britain, about 70% of the land belonged to just 1% of the population, while in France, the richest 1% owned nearly 60% of all wealth. This "Belle Époque" represented the culmination of centuries of wealth accumulation by elite families. World War I delivered the first blow to this concentrated wealth. The unprecedented scale of mobilization transformed societies as millions of men were drafted into military service. Government spending increased four to eight times as a share of GDP among the principal belligerents. To fund these extraordinary expenses, governments introduced steeply progressive income and inheritance taxes. In the United Kingdom, the top income tax rate rose from 6% to 30% during the war, while in the United States, it jumped from 7% to 77%. Physical destruction of capital through bombing and combat directly eliminated wealth, particularly in continental Europe. The Great Depression further eroded elite fortunes. The stock market crash of 1929 wiped out substantial portions of wealth, while subsequent banking crises destroyed savings and financial assets. In the United States, the income share of the top 1% fell by almost a quarter during the Depression alone. The political response to economic crisis further compressed inequality. Roosevelt's New Deal implemented financial regulations, strengthened labor unions, and expanded social programs that benefited ordinary Americans at the expense of economic elites. World War II accelerated this leveling process to an even greater degree. The scale of mobilization surpassed even that of World War I, with over 100 million soldiers worldwide. Government spending reached unprecedented levels – in Germany, the state secured 73% of GNP in 1943, while Japan reportedly spent as much as 87% of GDP on the war effort in 1944. Top marginal tax rates soared to confiscatory levels – 94% in the United States and similar rates in other Allied nations. Roosevelt justified these rates by declaring that "in this time of grave national danger, when all excess income should go to win the war," the wealthy must contribute proportionally more. Physical destruction of capital was even more extensive than in World War I. In France, two-thirds of the capital stock was wiped out during World War II. In Japan, the richest 1% saw their income share collapse from 19.9% in 1938 to 6.4% by 1945 – a decline of two-thirds in just seven years. The declared real value of the largest 1% of estates in Japan fell by 90% between 1936 and 1945. Inflation, though contained in America and Britain, ravaged continental Europe—prices rose 100 times in France and 300 times in Germany between 1913 and 1950, effectively wiping out the value of government bonds traditionally held by the wealthy. Perhaps most importantly, the leveling effect of these wars persisted long after the fighting ended. The institutions created during wartime – progressive taxation, labor protections, and expanded social services – remained in place for decades afterward. The warfare state transformed into the welfare state, using the same fiscal machinery that had been developed to fund the war effort. This institutional legacy ensured that inequality would remain at historically low levels well into the 1970s, creating what economists later called the "Great Compression."

Chapter 3: Revolutionary Leveling: Communist Experiments in Radical Redistribution

Communist revolutions represent perhaps the most direct and intentional form of violent leveling in modern history. Unlike wars or pandemics, these transformative upheavals explicitly targeted existing wealth hierarchies with the stated goal of creating more egalitarian societies. The Russian Revolution of 1917 established the template that subsequent communist movements would follow. When the Bolsheviks seized power in Russia, they quickly moved to eliminate the aristocracy and bourgeoisie as economic classes. The very next day after taking power, Lenin issued the "Land Decree," which abolished landowners' property rights without compensation. This was followed by the nationalization of banks, factories, and other productive assets. The violence that accompanied these expropriations was extreme. During the Russian Civil War (1918-1922) and the subsequent period of "war communism," the Bolsheviks targeted the former elite with particular ferocity. As Lenin wrote in August 1918 to a provincial commissar: "Hang (and I mean hang so that the people can see) not less than 100 known kulaks, rich men, bloodsuckers... Do this so that for hundreds of miles around the people can see, tremble, know and cry." Stalin's forced collectivization in the late 1920s and early 1930s extended this leveling process to the countryside. By 1937, fully 93% of Soviet agriculture had been forcibly collectivized. The human cost was staggering – an estimated 300,000 deportees died during transport, and perhaps 6 million peasants starved to death during the resulting famine. The "Great Terror" of 1937-1938 further decimated the remaining elite, with the NKVD arresting more than 1.5 million citizens, nearly half of whom were executed. China's communist revolution followed a similar pattern after 1949. Mao Zedong's land reform campaign targeted landlords and "rich peasants" for expropriation and often death. Between 1947 and 1952, more than 10 million landlords were expropriated and an estimated 1.5 to 2 million were killed. Mao described this as "the most hideous class war between peasants and landlords... a battle to the death." By the early 1950s, about 40% of China's farmland had been redistributed to poor peasants. The Great Leap Forward (1958-1962) and Cultural Revolution (1966-1976) further attacked remaining economic differences through radical collectivization and campaigns against "bourgeois" elements. The economic results of these revolutionary upheavals were dramatic. In Russia, the income share of the top 1% collapsed. By the 1980s, the market income Gini coefficient in the Soviet Union hovered around 0.27, compared to values above 0.4 in most Western countries. In China, the national market income Gini fell to 0.23 by 1984. Communist regimes in Vietnam, North Korea, Cuba, and Cambodia achieved similar compressions of inequality through similar means. However, this leveling came at an enormous human cost. Communist regimes have been held responsible for approximately 100 million deaths in the twentieth century. Moreover, the equality achieved proved unsustainable once these regimes liberalized or collapsed. After the fall of the Soviet Union, Russia's market income Gini nearly doubled from 0.28 in 1990 to 0.51 five years later. In China, economic liberalization under Deng Xiaoping led to a similar explosion of inequality, with the Gini rising from 0.23 in 1984 to around 0.55 by 2014. This suggests that revolutionary leveling required ongoing repression to maintain, and quickly reversed when constraints were lifted.

Chapter 4: Pandemic Economics: How the Black Death Transformed Medieval Society

The Black Death of 1347-1351 stands as one of history's most powerful equalizing forces. This catastrophic plague, caused by the bacterium Yersinia pestis, killed between 30% and 60% of Europe's population in just four years. Its impact on the distribution of wealth and income would persist for generations, fundamentally altering the economic landscape of medieval Europe. The plague first emerged in the Gobi Desert in the late 1320s before spreading across Asia and eventually reaching Europe via Italian merchant ships from the Crimea in 1347. Contemporary accounts describe the horror in vivid detail. As Agnolo di Tura wrote of Siena: "Father abandoned child, wife husband, one brother another... And so they died. And none could be found to bury the dead for money or friendship... And so many died that all believed it was the end of the world." The disease spread rapidly through urban centers and rural villages alike, killing rich and poor indiscriminately. What made the Black Death such a powerful leveling force was its timing. It struck Europe when the continent was near the peak of a long population expansion that had begun around 1000 CE. By the early 14th century, this growth had created classic Malthusian conditions: too many people competing for limited resources. Land was scarce relative to labor, keeping wages low and rents high. The plague dramatically reversed this ratio, making labor scarce and land abundant. The economic consequences were immediate and profound. Real wages for both skilled and unskilled workers roughly doubled across Europe between the pre-plague period and the mid-15th century. In England, the real purchasing power of agricultural workers' wages rose by about 50% in the decades after the plague. Meanwhile, land rents fell by 30-40%, and interest rates declined both in absolute terms and relative to wages. Landowners lost, while workers gained. Tax records from Italian cities show wealth inequality falling by 10-15 percentage points in the plague's aftermath. Employers and authorities attempted to resist these market forces. In England, the crown passed the Ordinance of Laborers in 1349, forbidding workers from accepting wages higher than pre-plague levels. Similar measures were enacted in France and other countries. However, these efforts largely failed. As the chronicler Henry Knighton noted, "the workers were so above themselves and so bloody-minded that they took no notice of the king's command." Market forces prevailed over government attempts to suppress wages. The plague's leveling effect extended beyond wages and rents. The sudden deaths of so many property owners led to a redistribution of wealth as assets were inherited by more distant relatives or confiscated by local authorities. The shortage of skilled craftsmen and professionals created opportunities for social mobility. In cities like Florence and Venice, previously rigid guild structures were forced to become more flexible, allowing newcomers to enter trades that had been effectively closed to them before. Archaeological evidence shows that post-plague commoners consumed more meat, dairy products, and wheat bread than their predecessors. This period of relative equality lasted for nearly a century and a half. Only around 1500, when European population levels had substantially recovered, did real wages begin to decline and inequality to rise again. By 1600, real wages in most European cities had returned to pre-plague levels, and they continued to fall or stagnate for the next two centuries. The Black Death demonstrates how demographic catastrophe can reshape economic relationships in ways that reduce inequality, providing a stark historical example of how violent shocks can transform social structures more effectively than deliberate policy interventions.

Chapter 5: State Collapse: When Civilizations Fall and Elites Lose Everything

Throughout history, the disintegration of states and civilizations has repeatedly served as a powerful force for economic leveling. When complex societies unravel, the wealthy and powerful typically have the most to lose, while the gap between elites and commoners narrows amid general impoverishment. This pattern has appeared across vastly different historical contexts, from ancient civilizations to modern failed states. The collapse of the Western Roman Empire provides a classic example. By the early 5th century CE, enormous wealth had accumulated in the hands of a small ruling class with intimate ties to political power. The richest Roman senators owned estates scattered across the Mediterranean basin and commanded annual incomes comparable to the revenue the state expected from entire provinces. As Germanic kingdoms took over Roman territories between the 430s and 470s CE, this super-rich elite lost access to their far-flung properties. Archaeological evidence shows that inequality plummeted across former Roman territories—in Britain, the Gini coefficient for house sizes fell from 0.63 during the Roman period to 0.41 in the early Anglo-Saxon era. Elite villas disappeared, replaced by simpler dwellings of more uniform size. The terminal phase of China's Tang dynasty (618-907 CE) provides another clear example of how state disintegration destroys elite wealth. By the ninth century, a small number of aristocratic families had come to dominate the Tang state, monopolizing high offices and accumulating vast estates. This elite was concentrated in the capital cities of Chang'an and Luoyang, where proximity to the imperial court ensured access to power and wealth. However, this metropolitan residence proved fatal when the state began to unravel. In 881 CE, the rebel warlord Huang Chao captured Chang'an, triggering violent reprisals against high officials. According to contemporary sources, Huang's troops "especially detested bureaucrats, killing all those they got their hands on." The properties of the wealthy were looted and destroyed. As the poet Zheng Gu lamented, "At sunset, foxes and hares cross where the grandees of state resided but recently." Over the following decades, a series of purges decimated what remained of the Tang elite. By the time a new dynasty emerged in 960 CE, the old aristocracy had virtually disappeared from the historical record. The collapse of complex societies in the ancient world provides even more dramatic examples of leveling. When the Mycenaean palace civilization of Greece collapsed around 1200 BCE, it eliminated an entire ruling class that had controlled a redistributive economy. Writing disappeared, monumental construction ceased, and luxury goods vanished from the archaeological record. For several centuries afterward, Greece entered a "Dark Age" characterized by small settlements, simple dwellings, and minimal social stratification. Similar patterns can be observed in the collapse of the Classic Maya civilization in the ninth century CE and the fall of Teotihuacan in central Mexico in the sixth century. Even in the modern world, state collapse can reduce inequality. Somalia, following the overthrow of dictator Siad Barre in 1991, provides a contemporary example. Under Barre's rule, state resources had been systematically diverted to the dictator and his allies. After the central government disintegrated, the extraction of resources for the benefit of a unified national elite ceased. Despite Somalia's many problems, its income Gini coefficient of 0.4 in 1997 was lower than in neighboring countries (0.47) and in West Africa (0.45) at the time. The leveling effect of state collapse stems from the fact that in most preindustrial societies, elite wealth was primarily derived from two sources: the accumulation of resources through investment in productive assets and predatory accumulation via state service, graft, and plunder. Both income streams critically depended on state stability. When states failed, established elites lost not only opportunities for continuing enrichment but often their existing property as well. Although everyone suffered during such upheavals, the rich simply had vastly more to lose.

Chapter 6: The Great Divergence: Rising Inequality Since the 1970s

Since the 1970s, income and wealth inequality have risen dramatically across much of the world, effectively reversing many of the equalizing gains achieved during the Great Compression. This resurgence of inequality represents a fundamental shift in the economic landscape and has transformed societies in ways that would have been difficult to imagine in the mid-20th century. The timing of this reversal varied somewhat by country, but the pattern is remarkably consistent. In the United States, income concentration began increasing around 1973, while the United Kingdom saw similar trends starting in the same year under Margaret Thatcher's leadership. Other Anglo-Saxon economies followed in the late 1970s and early 1980s. Continental European countries and Japan generally experienced rising inequality slightly later, with 1983 marking a statistical turning point for many nations. By the early 21st century, top income shares in many developed countries had returned to levels not seen since before World War I. Multiple forces have driven this dramatic shift. Technological change has increased demand for highly skilled workers while automating many middle-skill jobs, creating a polarized labor market. The computer revolution and automation eliminated many middle-skill jobs, while global supply chains allowed companies to outsource production to lower-wage countries. These structural economic changes created winners and losers—college graduates saw their wages rise relative to high school graduates, while manufacturing workers in developed economies faced stagnant or declining real wages. In the United States, the college wage premium nearly doubled between 1980 and 2005. Institutional changes have been equally important. Union membership has declined precipitously across the developed world, weakening labor's bargaining power. In the United States, the unionization rate fell from about 35% in the 1950s to less than 11% today. Minimum wages have failed to keep pace with productivity growth in many countries. Tax policies have become less progressive, with top marginal income tax rates falling from around 70-90% in the 1970s to 35-50% by the 2000s in most developed nations. In the United States, the top rate was slashed from 70% to 28% under Reagan. Estate and inheritance taxes have been weakened or eliminated in many jurisdictions. The collapse of communism accelerated these trends by removing a powerful ideological competitor that had indirectly constrained inequality in capitalist societies. During the Cold War, Western governments had recognized that addressing inequality was essential to preventing communist ideas from gaining traction. Once this threat disappeared, political support for redistributive policies weakened. As former British Prime Minister Tony Blair acknowledged, "the fall of the Berlin Wall in 1989 meant that the left could no longer pretend that the state should own the commanding heights of the economy." Financial sector growth played a particularly important role in driving top-end inequality. Deregulation allowed banks to engage in increasingly complex and profitable activities, from securitization to derivatives trading. The share of financial sector profits in total corporate profits in the United States rose from around 15% in the early 1980s to over 40% by 2007. Compensation in finance surged accordingly—by the early 2000s, financial professionals accounted for 15-25% of the top 0.1% of earners in the United States, compared to just 5% in the 1970s. The 2008 financial crisis temporarily halted the growth of inequality in many countries, as asset prices collapsed and financial sector profits evaporated. However, the subsequent recovery proved highly uneven. Central bank policies designed to prevent economic collapse, particularly quantitative easing, disproportionately benefited asset owners by inflating stock and real estate values. By 2015, the top 1% had recovered all their losses from the crisis, while median household wealth in many countries remained below pre-crisis levels. This resurgence of inequality raises profound questions about the exceptional nature of the mid-twentieth century compression and whether societies can find peaceful means to reduce inequality without the catastrophic violence that drove the Great Compression.

Chapter 7: Peaceful Alternatives: Can Societies Reduce Inequality Without Violence?

Throughout history, societies have occasionally attempted to reduce inequality through non-violent means. Land reform, democratization, and expanded education represent the most significant peaceful approaches to leveling. However, the historical record suggests these methods have rarely succeeded without the backdrop of violent shocks or credible threats of violence. Land reform - the redistribution of agricultural property from large landowners to smallholders or landless peasants - has been implemented in numerous countries. In theory, it offers a direct path to reducing wealth inequality in agrarian societies. Yet successful peaceful land reforms have been exceedingly rare. Japan's land reform after World War II is often cited as a success story, but it occurred under American military occupation following Japan's defeat. South Korea and Taiwan implemented effective land reforms in the 1950s, but these were driven by fears of communist revolution amid the Cold War. Without such extraordinary circumstances, peaceful land reform typically faces insurmountable opposition from landowners. Education expansion represents perhaps the most promising peaceful leveler. By expanding human capital and reducing skill premiums, education can potentially compress wage differentials. The mid-20th century democratization of access to secondary and higher education in developed countries helped compress wage differentials by increasing the supply of skilled workers. South Korea's massive educational investments since the 1960s contributed to its relatively equal income distribution despite rapid economic growth. However, education alone cannot counteract all disequalizing forces, as demonstrated by rising inequality in the United States despite continued educational expansion. Progressive taxation and social transfers have moderated market income inequality in many countries, particularly in Northern Europe. Sweden, Denmark, and other Scandinavian nations have maintained relatively compressed income distributions through high tax rates and generous social benefits. However, even these countries have experienced rising market income inequality in recent decades, offset only by increasingly extensive redistribution. Moreover, the high taxation that supports Nordic welfare states emerged in a historical context shaped by the world wars and the threat of communist alternatives. Labor market institutions also play a crucial role in peaceful compression. Countries with strong collective bargaining, minimum wage laws, and employment protections generally maintain more equal wage distributions. Germany's system of coordinated wage bargaining has helped prevent the extreme wage dispersion seen in more liberalized labor markets like the United States. However, maintaining these institutions has proven difficult in the face of globalization, technological change, and shifting political priorities. Democratic political systems can facilitate peaceful redistribution under certain conditions. Expanded suffrage historically coincided with greater social spending and progressive taxation. However, democracy alone does not guarantee equalizing outcomes, as demonstrated by persistently high inequality in many democratic developing countries and rising inequality in established democracies. Studies show that elected officials are often more responsive to the preferences of affluent constituents than to those of middle-class or poor voters, creating feedback loops where economic inequality reinforces political inequality. Recent experiments with more innovative approaches offer some promise. Several Latin American countries have reduced inequality through expanded social programs and minimum wages, though these gains remain modest and potentially fragile. Universal basic income proposals have gained attention as potential responses to technological disruption, though implementation challenges remain substantial. Wealth taxes have been proposed to address capital concentration, but face significant political and practical obstacles. The limitations of peaceful compression are significant. No society has achieved through entirely peaceful means the degree of equalization that occurred during the Great Compression triggered by the world wars. Powerful interests typically resist significant redistribution, and the political feasibility of equalizing reforms often depends on unusual circumstances or external pressures. Even the most successful cases of peaceful compression have generally reduced inequality gradually and modestly rather than dramatically and rapidly. This historical pattern presents a profound challenge: can contemporary societies develop more effective peaceful mechanisms for creating broadly shared prosperity, or will structural forces continue to drive inequality in the absence of catastrophic leveling events?

Summary

The central insight that emerges from this historical survey is both profound and disturbing: significant reductions in economic inequality have almost always resulted from violent and catastrophic events. The "Four Horsemen" of leveling - mass mobilization warfare, transformative revolution, state collapse, and lethal pandemics - have been the primary forces compressing the distribution of income and wealth throughout human history. From the Black Death's dramatic effect on medieval wages to the equalizing impact of the World Wars, from communist revolutions to the collapse of states and empires, violent shocks have repeatedly disrupted established patterns of wealth concentration. By contrast, peaceful reforms have rarely achieved substantial or lasting equalization without the backdrop of these catastrophic events. This historical pattern challenges conventional thinking about inequality and its remedies. It suggests that the relatively low inequality of the mid-20th century was not simply the natural outcome of economic development or democratization, but rather the product of extraordinary violent shocks that are unlikely to recur. As these effects have faded, inequality has resurged across much of the world. The implication is sobering: addressing today's growing disparities may prove extraordinarily difficult without the pressure of catastrophic events that no one would wish to experience. This doesn't mean we should abandon efforts at peaceful reform through progressive taxation, educational expansion, and strengthened labor institutions. Rather, it suggests we should be realistic about the scale of the challenge and the historical precedents for significant equalization. Perhaps most importantly, this history reminds us that economic arrangements are not inevitable or immutable, but shaped by specific historical circumstances that can change dramatically - sometimes with devastating consequences.

About Author

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Walter Scheidel

Dickason Professor in the HumanitiesProfessor of Classics and HistoryCatherine R. Kennedy and Daniel L. Grossman Fellow in Human BiologyWalter Scheidel is the Dickason Professor in the Humanities, Professor of Classics and History, and a Kennedy-Grossman Fellow in Human Biology at Stanford University. The author or editor of sixteen previous books, he has published widely on premodern social and economic history, demography, and comparative history. He lives in Palo Alto, California.Scheidel's research ranges from ancient social and economic history and premodern historical demography to the comparative and transdisciplinary world history of inequality, state formation, and human welfare. He is particularly interested in connecting the humanities, the social sciences, and the life sciences.

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