In doing so, he found a striking pattern. From to the s, inequality increased more than a hundredfold. Then came the reversal: from the s to , it shrank back to levels not seen since the midth 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 From to the present, the wealth gap has been on another steep, if erratic, rise. 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.
An obvious objection presents itself at this point. Does observing just one and a half cycles really show that there is a regular pattern in the dynamics of inequality? But this is where looking at other historical societies becomes interesting. In our book Secular Cycles , 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. 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. Cycles in the real world are chaotic, because complex systems such as human societies have many parts that are constantly moving and influencing each other. Despite this complexity, our historical research on Rome, England, France, Russia and now the US shows that these complex interactions add up to a general rhythm.
Upward trends in variables for example, economic inequality alternate with downward trends.
And most importantly, the ways in which other parts of the system move can tell us why certain trends periodically reverse themselves. Understanding and perhaps even forecasting such trend-reversals is at the core of the new discipline of cliodynamics, which looks at history through the lens of mathematical modelling.
So 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. F irst, we need to think about jobs. Unless other forces intervene, an overabundance of labour will tend to drive down its price, which naturally means that workers and their families have less to live on.
One of the most important forces affecting the labour supply in the US has been immigration, and it turns out that immigration, as measured by the proportion of the population who were born abroad, has changed in a cyclical manner just like inequality. In fact, the periods of high immigration coincided with the periods of stagnating wages.
The Great Compression, meanwhile, unfolded under a low-immigration regime.
This tallies with work by the Harvard economist George Borjas, who argues that immigration plays an important role in depressing wages, especially for those unskilled workers who compete most directly with new arrivals. Immigration is only one part of a complex story.
Another reason why the labour supply in the US went up in the 19th century is, not to put too fine a point on it, sex. The native-born population was growing at what were, at the time, unprecedented rates: a 2. By there was no available farmland in Eastern Seaboard states. This connection between the oversupply of labour and plummeting living standards for the poor is one of the more robust generalisations in history. Consider the case of medieval England.
Consequently, a man who is “poor” in material possessions many times society gap between rich and poor keeps growing year after year, the. Free Essay: “America the beautiful, Who are you beautiful for?” America, the land of opportunity, but is it really? America is made up of people of many.
The population of England doubled between and Too many hungry mouths and too many idle hands resulted in a fourfold increase in food prices and a halving of real wages. Then, when a series of horrible epidemics, starting with the Black Death of , carried away more than half of the population, the same dynamic ran in reverse. The catastrophe, paradoxically, introduced a Golden Age for common people. Real wages tripled and living standards went up, both quantitatively and qualitatively. Common people relied less on bread, gorging themselves instead on meat, fish, and dairy products.
Much the same pattern can be seen during the secular cycle of the Roman Principate.
The population of the Roman Empire grew rapidly during the first two centuries up to AD. Then came a series of deadly epidemics, known as the Antonine Plague. In Roman Egypt, for which we have contemporary data thanks to preserved papyri, real wages first fell when the population increased and then regained ground when the population collapsed.
We also know that many grain fields were converted to orchards and vineyards following the plagues. The implication is that the standard of life for common people improved — they ate less bread, more fruit, and drank wine. The gap between common people and the elites shrank. Naturally, the conditions affecting the labour supply were different in the second half of the 20th century in the US.
But none of this alters the fact that an oversupply of labour tends to depress wages for the poorer section of the population. And just as in Roman Egypt, the poor in the US today eat more energy-dense foods — bread, pasta, and potatoes — while the wealthy eat more fruit and drink wine. As the slice of the economic pie going to employees diminishes, the share going to employers goes up.
Periods of rapid growth for top fortunes are commonly associated with stagnating incomes for the majority. Equally, when worker incomes grew in the Great Compression, top fortunes actually declined in real terms. And so in 13th-century England, as the overall population doubles, we find landowners charging peasants higher rents and paying less in wages: the immiseration of the general populace translates into a Golden Age for the aristocrats.
As the historian Christopher Dyer wrote, life was good for the upper-crust English around They drank more wine and spent their spare cash building or refurbishing castles, cathedrals, and monasteries. For example, the number of knights and esquires tripled between and But disaster struck in , when the Black Death removed the population surplus and then some. By the 15th century, while the common people were enjoying their own Golden Age, the aristocracy had fallen on hard times. We can infer the severity of their financial straits from the amount of claret imported from France.
Only the gentry drank wine, and around , England imported 20, tuns or casks of it from France per year. By , this declined to only 5, In the midth century, there were simply fewer aristocrats and they were much poorer.
In the US between around and , there was another Golden Age for the elites, appropriately called the Gilded Age. While living standards for the majority declined seen vividly in dwindling average heights and life expectancies , the moneyed classes were enjoying ever more luxurious lifestyles. And just like in 13th-century England, the total number of the wealthy was shooting up. Between and , the number of millionaires in constant dollars went from 2. In our current cycle, the proportion of decamillionaires those whose net worth exceeds 10 million in dollars grew tenfold between and — from 0.
This seems like a peculiar development.
The reason for it — cheeringly enough, you might say — is that cheap labour allows many enterprising, hard-working or simply lucky members of the poorer classes to climb into the ranks of the wealthy. In America today, enterprising and hard-working individuals start dotcom companies or claw their way into jobs as the CEOs of large corporations. According to a January 12, New York Times article written by Sabrina Tavernise there is a rising perception of class tensions between the rich and the poor due to income inequalities.
It clearly articulates that the jobs of routine producers and in-person servers have vanished totally as modern techniques have replaced them. The author has stated that the only people whose jobs are on. This means the gap between the rich and poor has broaden throughout the years. The problem of the poorest of the population is that the fact that they don't have any. Why the rich vacation to poor countries and why do the poor immigrate to rich countries - Sociology - Essay words - 2 pages Essay Project 1 Often times the incentive to travel derives from financial status.
People from high income countries are traveling to low income countries as tourist, whereas people from low income counties are traveling to high income countries as immigrants. The key difference between the two is that one group travels willingly while the other is dependent on it to survive.