Matt Yglesias writes today, Inequality in Pre-Revolutionary Russia. He is reporting on the work of two economists: Steven Nafziger and Peter Lindert. They’ve been looking at income inequality in Russia under the Tsar at the turn of the 20th century. What they find is that Russia was about as unequal as similarly rich countries of that time. The more important finding: Tsarist Russia was less unequal than—Wait for it!—the United States today.
I’ve been thinking of the evolution of political/economic systems. We know that any economic system can lead to a totalitarian system if the government takes too much power. Libertarians are fond of pointing this out and rubbing the noses of liberals in it. But the assumption is always a capitalist system only has the government to worry about. Left to itself, a capitalism leads only to free markets and free minds. But as far as I can tell, a truly free market (and regardless of what they claim, no conservative—including libertarians—are really for free markets) leads to effectively a feudal system where 99% of the people are nothing more than serfs.
This takes me back to The One Percent and all the nonsense that Milton Friedman was spouting. It is interesting how libertarians always make practical arguments when presented with moral issues and moral arguments when presented with practical issues. Capitalism leads to an immoral level of inequality? Practically speaking, everyone is better off! (This is not even true, but it is a religious Truth for libertarians.) The poor are dying young because of lead in their water? It is immoral to take money away from anyone who earned it!
But you would think that information indicating that we have a worse income inequality problem than the one that led to the Russian Revolution might give such free marketeers pause. After all, democracy can push back against the unfettered market utopia that conservatives preach. But conservatives don’t pause. Regardless of what Ayn Rand said about enlightened self-interest, capitalism is now and always an extremely short-sighted system. The power elites don’t care any more about income inequality than they do about global warming. After all, the Russian Revolution was way before their time. And they don’t think any longer than one financial quarter ahead.