by Bill O’Grady

Occasionally, we find a book that has such an interesting message that we dedicate a Weekly Geopolitical Report to reviewing it.  This week, we will look at The Great Leveler by Walter Scheidel.[1]  The book is an extensive historical analysis of inequality and the factors that reduce it.

In this report, we will discuss the premise of the book, the “four horsemen” of income leveling and the future it portends.  As always, we will conclude with potential market ramifications.

The Basic Premise
Inequality has become a critical issue.  In 2013, President Obama said the following about inequality:

And that is a dangerous and growing inequality and lack of upward mobility that has jeopardized middle-class America’s basic bargain—that if you work hard, you have a chance to get ahead.  I believe this is the defining challenge of our time: Making sure our economy works for every working American.[2] 

Interestingly enough, Scheidel’s historical analysis makes it clear that the current level of inequality is hardly unique.  And, a certain degree of inequality has been with us since the early stages of human existence.  Archeologists note that even early gravesites of hunters and gatherers show distinctions of wealth and status.  These differences steadily became more widespread as civilization developed.

In theory, society could take steps to prevent or reduce inequality.  However, history suggests the opposite usually occurs.  As agriculture developed, Scheidel’s analysis shows that wealth became increasingly concentrated.  Scheidel’s key insight is that civilization and peace tend to bring rising income and wealth inequality.

However, a casual observation of history also suggests that wealth and income distributions are not permanent.  Sadly, Scheidel’s conclusion is that massive societal disruption reduces inequality.  He refers to these as the four horsemen of equality.

The Four Horsemen
The “Four Horsemen of the Apocalypse” comes from scripture.[3]  The biblical reference is widely debated but, in general, it refers to tribulations.  Scheidel suggests that his four horsemen refer to events that cause inequality to decline.  Here is his list: Mass Mobilization War, Transformative Revolution, Societal Collapse and Plague.

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[1] Scheidel, W. (2017). The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First Century. Princeton, NJ: Princeton University Press.

[2] Ibid, page 2.

[3] Rev. 6:1-8