Unveiling Inequality: A World-Historical Perspective

This book is part of an ongoing re-direction of the sociological space of imagination and investigation, from the national to the global, and of comparative cross-national research, from the mostly “Western” OECD world to the globe. In this perspective, the authors note, U.S. income inequality no longer appears outrageous but in the middle.

The empirical base of the study is a set income distribution data from 96 countries, unavoidably of less than perfect reliability and comparability, but reasonably good working material in an imperfect world. Through cluster analysis they then divide their sample into three groups by the level of their Gini index of inequality. The Low Inequality group has an index value of less than 0.33, and the High Inequality group above 0.50. As is well known, the former includes Europe east of the British Isles and Portugal and west of Poland, with a few Eastern additions, plus Northeast Asia except China. The High group consists of Latin America, Sub-Saharan African countries, with shaky figures but plausible location. Just above the threshold is India, on the fragile basis of a single, unpublished study, diverging from virtually all other Indian studies, with varying adjustments for translating expenditure data from standard surveys into income distributions. China, Russia, the United States, and the United Kingdom are in the middle category, left out of most of the global analysis. The authors’ empirical presentations are sometimes blurred by bad editing. The graph of the three country clusters is in part so cluttered as to be unintelligible. Their listing of global deciles—calculated from Gross National Income, and not from household income—will require many readers to resort to a magnifying glass.

The book puts forward two main arguments. First, low and high inequality within countries are long-term stable patterns, and should therefore be taken as equilibria: “. . . the areas . . . today having low and high levels of inequality are for the most part the very same areas that had relatively low and high levels of inequality during or even before the eighteenth century” (p. 23). Second, the “ascriptive criteria” (p. 120) of national citizenship and the nation-state are the main culprits of existing income inequality: “ . . . the nation-states . . . became the main axis for the articulation of inequality . . . over the past several centuries and continue to constitute such an axis today” (p. 111).

These are bold and interesting claims, which fail to convince, however. In part because the authors have little grasp of history, their claim to a “world-historical” approach notwithstanding, and in part because their predominant development economics focus gives little room or time for sociological reflection.

The alleged long, centuries-old division of high and low inequality countries is largely a fiction, entangled in a tangential argument about high income plantation slave economies being capable of generating much wealth in their time. Western Europe is the core of the authors’ Low Inequality group. For two of the major European countries rather good historical data on income distribution exist. The French Gini index on the eve of the Revolution was above 0.6, a figure touched again under post-revolutionary capitalism in the l860s. England and Wales in l801 and the United Kingdom in l867 were also High Inequality countries, with Ginis above 0.5. Scattered data and recent scholarly estimates from other countries indicate strongly that not so long ago Europe was a “High Inequality” area, the Netherlands had an index of 0.63 in l808 and probably above 0.5 in l916, and eight towns in Norway in the l860s–70s together had a 0.69 income distribution. In Northeast Asia, Taiwanese Gini went down from 0.56 in l953 to 0.32 in l964. ¹

On the second point, it is, of course, true that national economies largely shape the income prospects of most people. But is it reasonable to expect that an abolition of national citizenship—which, by the way, is not necessarily an “ascriptive category,” when in most rich countries the foreign-born make up between an eighth and a fourth of the population—would create a low inequality world? I think not, for two reasons, one empirical, the other theoretical.

Empirically, it is a fact that national citizenship has proved compatible with enormous within-nation inequality. Calculations of world income distribution among households, by Branko Milanovic and other World Bank economists, have yielded a planetary Gini Index around 0.65. ² Such a distribution among the inhabitants of the earth is about the same as that between the citizens of South Africa or Bolivia, and only a little higher than among the citizens of Brazil under the Presidency of Fernando Henrique Cardoso. Among the national citizens-cum-city-residents of Johannesburg, the current income distribution is 0.75. ³

Theoretically, if citizens can be kept massively unequal, there seems to be little reason to expect inequality among a population unlimited by citizenship, or some other kind of membership concept, to decline. It has to be taken into account that the privileged have many other means to preserve and defend their privileged position in an inegalitarian system than the state border police, from inheritance, exclusive private schools, clinics, and clubs, to business networks, gated housing and private guards. Any serious visitor to, say Manila, São Paulo or Johannesburg cannot fail to notice at least some of them. Without citizenship, the chances of redistribution and of pooling of risks among classes are also likely to be severely reduced.

A world-historical perspective on inequality is a most promising approach, but it should be done more carefully than this one.