Inequality Is Cyclical, Skyrocketing Until – Periodically – Revolution Forces Concessions from Those Who Have Grabbed All the Wealth

Cycles of Wealth

Preface:  Sometimes breakthrough insights come from smart, accomplished people in one expertise who look at a different field with fresh eyes … unencumbered by the dogmas and politics of that field.

Peter Turchin is a professor in the Department of Ecology and Evolutionary Biology, and an adjunct professor in the departments of Anthropology and Mathematics at the University of Connecticut.

Turchin’s new research interest is inequality.  Specifically, Turchin is now applying the mathematical rigor used in population biology to inequality.

We currently have what is arguably the worst inequality in history.  (We’re not talking about the 1% … we’re talking about the real powers-that-be.)

Most Democrats and most Republicans think we have too much inequality. Even the mainstream economists who fought the concept for decades now admit that runaway inequality is destroying our economy.

But we can’t take the current situation in a vacuum …

Peter Turchin notes that inequality is cyclical:

In his book Wealth and Democracy (2002), Kevin Phillips came up with a useful way of thinking about the changing patterns of wealth inequality in the US. He looked at the net wealth of the nation’s median household and compared it with the size of the largest fortune in the US. The ratio of the two figures provided a rough measure of wealth inequality, and that’s what he tracked, touching down every decade or so from the turn of the 19th century all the way to the present. In doing so, he found a striking pattern.

From 1800 to the 1920s, inequality increased more than a hundredfold. Then came the reversal: from the 1920s to 1980, it shrank back to levels not seen since the mid-19th century. Over that time, the top fortunes hardly grew (from one to two billion dollars; a decline in real terms). Yet the wealth of a typical family increased by a multiple of 40. From 1980 to the present, the wealth gap has been on another steep, if erratic, rise. Commentators have called the period from 1920s to 1970s the ‘great compression’. The past 30 years are known as the ‘great divergence’. Bring the 19th century into the picture, however, and one sees not isolated movements so much as a rhythm. In other words, when looked at over a long period, the development of wealth inequality in the US appears to be cyclical. And if it’s cyclical, we can predict what happens next.

***

In our book Secular Cycles (2009), Sergey Nefedov and I applied the Phillips approach to England, France and Russia throughout both the medieval and early modern periods, and also to ancient Rome. All of these societies (and others for which information was patchier) went through recurring ‘secular’ cycles, which is to say, very long ones. Over periods of two to three centuries, we found repeated back-and-forth swings in demographic, economic, social, and political structures. And the cycles of inequality were an integral part of the overall motion.

***

Our historical research on Rome, England, France, Russia and now the US shows that these complex interactions add up to a general rhythm.

***

It looks like the pattern that we see in the US is real. Ours is, of course, a very different society from ancient Rome or medieval England. It is cut off from them by the Industrial Revolution and by innumerable advances in technology since then. Even so, a historically based model might shed light on what has been happening in the US over the past three decades.

So what accounts for the periods of rising equality?  Turchin gives a number of factors.

One is revolution, when inequality became too extreme.  Turchin writes:

History provides another clue. Unequal societies generally turn a corner once they have passed through a long spell of political instability. Governing elites tire of incessant violence and disorder. They realise that they need to suppress their internal rivalries, and switch to a more co-operative way of governing, if they are to have any hope of preserving the social order. We see this shift in the social mood repeatedly throughout history — towards the end of the Roman civil wars (first century BC), following the English Wars of the Roses (1455-85), and after the Fronde (1648-53), the final great outbreak of violence that had been convulsing France since the Wars of Religion began in the late 16th century. Put simply, it is fear of revolution that restores equality. And my analysis of US history in a forthcoming book suggests that this is precisely what happened in the US around 1920.

Indeed, it is well-documented that runaway inequality leads to unrest and revolution.   And as Turchin notes,  – unrest and revolution in turn leads the powers-that-be to stop hogging all of the wealth.

The journal Nature writes:

Perhaps revolution is the best, if not the only, remedy for severe social stresses. [Herbert Gintis, a retired economist who is still actively researching the evolution of social complexity at the University of Massachusetts Amherst] points out that he is old enough to have taken part in the most recent period of turbulence in the United States, which helped to secure civil rights for women and black people. Elites have been known to give power back to the majority, he says, but only under duress, to help restore order after a period of turmoil. “I’m not afraid of uprisings,” he says. “That’s why we are where we are.”

We have repeatedly noted that we are opposed to violent revolution.  Activists like David DeGraw point out that things are going to dramatically change one way or the other … through a huge change for the better, or a descent into violence and chaos.

John F. Kennedy said:

Those who make peaceful revolution impossible will make violent revolution inevitable.

Sadly, the government is doing everything it can to crush peaceful change, treating peaceful protesterswhistleblowers and investigative reporters as terrorists.  And the big banks are joining in the effort to make peaceful revolution impossible.

Postscript:  Turchin notes that another factor which at times reduces inequality is a pandemic.   For example, the survivors of the Black Plague could demand higher wages, since labor was scarce.

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  • mirageseekr

    MSM is guilty as well. Millions of people have marched against Monsanto and in the Million Mask March (last years even bigger) and they do not even cover it. Everything they do is carefully constructed to keep TBTB protected. By denying us a voice they will make violence the option for many whom are tired of being silenced.

  • Ronin

    The more things change the more they stay the same

    History repeats….because people don’t study or learn from history…..sad :/

    • nightgaunt

      History and Humanity are too complex to repeat, however it does rhyme.

  • Tatiana Covington

    “…the survivors of the Black Plague could demand higher wages, since labor was scarce.”

    That was the 14th Century, before robots and viral engineering.

    In the 21st and 22nd C’s? Then what? Terminators and super-Ebolas to clear away the working classes once and for all? Is that where this is going?

    • nightgaunt

      Humans are cheaper so unless they want to replace us with robots and pay us to keep our econoomy going they will not destroy us. We are cheaper than robots. However that doesn’t mean they will use them to help subjugate us though. And with an over production of poor humans they keep the cost low as now it is so easy to fire one and replace with another and another etc. So far we in the USA have not risen up. Short of wide wides spread food shortages research shows most people will go along to get along.

  • Tracy Robinson

    Reject money and topple the system.. Trust in each other and work together to rebuild a better future for all of us. Don’t give power to and create a special class of people to become your overseers and owners. We have the technology and the means to the end. This is the only cycle in history I see and money is what brings them all together. Money separates us all further than religion ever could (and religion is a worldwide multibillion dollar corporation)

  • Parzival

    ‘Historical Cycles: Are we doomed to repeat the past?’
    http://bit.ly/1wQgKqN