Obama legacy is that he trimmed the top 1-percenters’ share, after taxes and transfers, to only 15.4 percent, from 16.6 percent of the nation’s income and increased the slice going to the poorest fifth of families by 0.6 percentage point, to a grand total of 4 percent. Not much of an achievement. But probably the best he could accomplish. Walter Scheidel, a professor of history at Stanford, however, in his new book, “The Great Leveler” reckons that “only all-out thermonuclear war might fundamentally reset the existing distribution of resources.”
Scheidel’s depressing view is based upon his interpretation of the effects of catastrophes in history.
The collapse of the Roman Empire in the second half of the fifth century, reinforced by a bubonic plague pandemic, brought about Western Europe’s first great leveling. Productivity collapsed and the aristocracy’s far-flung assets were expropriated, while Rome’s trade networks and fiscal structures were destroyed. Inequality bounced back, of course. By 1300 the richest 5 percent of people had amassed nearly half the wealth in the cities of Italy’s Piedmont. But another bubonic plague known in history as the Black Death changed all that, killing a quarter of Europe’s population in the 14th century and cutting the share of wealth of Piedmont’s rich to under 35 percent. World War II was also a game changer. It significantly improved the earnings of those at the bottom of the social system by vastly raising demand for unskilled labor to serve the war effort. Between 1939 and 1945 the income share of the richest 10 percent dropped by more than 10 percentage points.
Many reformists would like to propose higher minimum wages, perhaps even a universal basic income; or maybe helicopter in some cash to each citizen so all can benefit from the high returns on investment to help curb poverty; sharply higher income tax rates for the rich along with a wealth tax; a weakening of intellectual property rules, curbs on monopolies and coordination of labor standards around the world.
Again, Scheidel’s prognosis for change is a pessimistic one. “Serious consideration of the means required to mobilize political majorities for implementing any of this advocacy is conspicuous by its absence.”