A mod­est pro­posal

The Washington Post Sunday - - SUNDAY OPINION - GE­ORGE F. WILL georgewill@wash­post.com

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 a try. This might be a bit ex­treme, but if in­creased equal­ity is the goal, Stan­ford Univer­sity’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 Dürer’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 blood­y­minded 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 less than 3 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 “one-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: About 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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