Income Inequality 101: The Historical Context

It is time to reset your mental clocks and start thinking, for the duration of this article, in “historical time.” By historical time, I mean the centuries, sometimes the millennia it takes for a people to morph from a collection to a group to a society to a civilization. Bear with me while I provide the context.

A random gathering of fans at a football game is a collection of people. These fans may have nothing in common except they are at the same game.

A football team is a group. Members of a group interact primarily with other team members. They have their own “culture.”

A society begins with the mixture of two or more groups and their cultures. There is more interaction between the groups than within the group, sometimes resulting in an entirely new culture, but not often.

A society can be either a subsisting or producing society. A simple example of a subsisting society is the traditional Inuit (Eskimos) who live from hunting, gathering and fishing. They do not increase the amount of wealth in the world, but either decrease it or maintain a delicate balance. The Masai of Africa are a producing society because their economic activity revolves around the domestication of animals and agriculture. This increases the world’s wealth. Only producing societies can become civilizations! (The United States, France, and Brazil are producing societies, for example, but all are part of Western Civilization.)

Civilizations are complex, but the most common requirements are that they have both writing and cities. Producing societies have six cultural components.* Each of these components arise from man’s efforts to satisfy a human need:

  1. The need for group security – military
  2. The need to organize power relationships – political
  3. The need for material wealth – economic
  4. The need for companionship – social
  5. The need for psychological certainty – beliefs (religion)
  6. The need for understanding – intellectual

To satisfy the needs of any level, “instruments of expansion” are required. These instruments mainly consist of personal relationships whose ends are to achieve the needs of that level. As long as the needs are being effectively met, the “instrument of expansion” will exist. But all too often an instrument of expansion continues to exist long after the need has been met or is being met less effectively. Then the “instrument of expansion” becomes an “institution,” an entity that takes on a life of its own, independent, separate and sometimes at odds with the purposes for which it was intended. All too often, when an “instrument” becomes an “institution,” it is to the detriment of all the other components of the society.

An instrument of expansion must accomplish three things: (1) an accumulation of surplus, (2), an incentive to invent, and (3) the surplus must be used to pay for or use the new inventions. The essential element is the accumulation of surplus, though there can be no expansion if the other two are not present.

Here is a very simple example:

Mooki is a savage. He manages to kill one rabbit a day by throwing rocks. It’s just enough to keep him alive until the next day. Mooki would like to invent something that would make his life easier because he is tired of living hand to mouth. He actually has an idea for a new killing tool but can’t make it because he has no leisure time, and without leisure time, there is no time to create anything.

One day Mooki manages to kill a deer with a large rock. The deer provides him with enough food for 12 days! Mooki now has a surplus (the deer), which gives him a surplus of time as well. His hunger provides the incentive to invent and so he invests this surplus of “leisure time” to make and perfect the bow and arrow.

Now he can kill five rabbits a day. He can keep them all and become fat. He can give four other savages one rabbit each in return for favors like cooking, building a new hut or making arrows. He can keep the secret of how to make the bow and arrow to himself and be the sole depository of all wealth and knowledge. Or he can teach the other savages how to make bows and arrows, thereby increasing the living standard for all of them. He can also come up with other combinations besides these two. How his surplus will be used are social and political decisions. Regardless of whether Mooki keeps power and wealth for himself or disperses it among others, Mooki has brought into being the “instrument of expansion”… the bow and arrow!

In Mesopotamia, the instrument of expansion (or the surplus-creating instrument) was the tribute the citizens had to pay to the Sumerian priesthood. Minoan civilization created their surplus through taxation. The Greeks and Romans (Classical Civilization) had an instrument of expansion known as slavery. Western Civilization’s earliest instrument of expansion was feudalism, followed by mercantilism, capitalism, and corporate capitalism, the latter two being quite different from each other.

Most importantly, know that whoever controls the surplus also controls if or how it will be invested and that will have an effect on the incentives to invent. When the instrument of expansion become ineffective at satisfying the needs for which it was created, then it becomes an institution. When a civilization’s instrument of expansion becomes an institution, the rate of expansion slows down or ceases altogether, civilization is in decay and therefore ripe for being overthrown or absorbed by another civilization.

When we speak of the rise and fall of civilizations we are actually referring to the instruments of expansion (the rise) and the institutions into which they become (the fall.) In between, a civilization will have gone through many stages of development, but the common thread is that they always rise… and they always fall.

Institutions are loath to adapt to new conditions and change. The members of the institutions, due to “vested interests,” always resist the necessary reforms to keep them viable and effective. New instruments of expansion must be created and ineffective institutions must be allowed to crumble. But so far this has never happened peacefully.

If a civilization does not expand, then it begins to collapse. It has happened rarely, but sometimes an institution can reform itself to become an instrument of expansion once again. Sometimes an institution is circumvented. The vested interests are allowed to remain vested, but another instrument of expansion grows up beside the old institution and takes over most of its functions. Or if the vested interests of an institution are completely deaf and blind to the needs of a society in decay and disintegration, then the only way to create a new instrument of expansion is through reaction, sometimes called revolution!

Since recorded history, sixteen civilizations have been identified that meet the definition given earlier. Of these, six are still extant and in varying stages of decay because all their instruments of expansion have become institutions: Hindu, Islamic, Chinese, Japanese, Orthodox (Russian), and Western.

The strife we see around the world is simply the manifestation of societies trying to reform or circumvent their obsolete institutions and the powers that run them. They are trying to create a new instrument of expansion. If they don’t succeed, they will resort to revolution, which has been and may be their only recourse. I am hoping the latter can be thwarted by reasonable people who can think in historical time… understand the really big picture, and use it as a framework for not repeating the mistakes of the past.

Some civilizations have lasted thousands of years, but in the end, they all rise and fall. Western Civilization has been the most nimble in its ability to reform and circumvent its institutions, but our latest instrument of expansion… something called “corporate capitalism” has become a vast, pervasive institution, outliving its usefulness to satisfy the needs of the people. The vested interests that control the institutions will stubbornly refuse to reform themselves. Corporate Capitalism demands consumption. But if people do not have the money with which to consume, the institution of corporate capitalism will ultimately collapse. If the “surpluses” being hoarded by these vested interests aren’t freed up for invention and investment, then the institution will eventually be replaced… by what I do not know.

I do know the future will be most interesting, especially if one can step away from the immediate headlines of the day and see the world evolving, for better or for worse, in historical time. In a world where every news story is broadcast and continually barrages our senses, it is easy to get depressed. But if you can view the world in this larger context, you will find life easier to handle. Thinking in historical time is akin to a Zen exercise… to be in the world, but not of it!

Namaste,

The Unapologetic Hippie

Many thanks to Dr. Carroll Quigley, who taught me how to think and not what to think!

*Please note that when discussing historical development, both time and categories are not discrete, but part of a continuum. They are arbitrary and imaginary. I only refer to time or categories as a convenience. In truth, history is fluid and must be studied using a different “clock” and recognizing that categories are very much like a rainbow, whose colors merge into one another.

(If you wish to make a comment, and I hope you do, either click the Reply link at the top of the article, or the Title of the article itself.)

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11 thoughts on “Income Inequality 101: The Historical Context

  1. Alkitim

    I believe there is a chance that Corporate Capitalism could eventually burn out on its own because the people will not have enough income to keep the monster fed. As long as the masses are distracted by fears of plagues and warring mongrels, the oligarchs running the corporations can continue to suck everyone dry. The question is – when will the 1% realize that the lives they are living are not sustainable? What will fill the void when Corporate Capitalism caves in on itself? Will it be too late for mankind? Will mother earth decide to take back what is hers? She can certainly continue on without humans. It has been that way for most of earth’s history…. between this and today’s election…
    Oh man I need a joint!

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    1. The Unapologetic Hippie Post author

      Tim… thanks for this very insightful comment. Though I have yet to “bring home” this brief historical analysis and how it will effect our daily live and those of following generations, I will by the third and last installment. But you already understand where I am going with this. We are in deep trouble, brother Tim. Please do not bogart that joint!

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  2. Darwinfish

    To paraphrase Stephen King from “The Dead Zone”:
    95% of people who inhabit the earth are simply inert. 1% are saints. 1% are sinners. The remaining 3% are people who do what they say they can do.

    In speaking of our home…the earth…I view most humans as parasites. Some of them willfully. Some of them willingly. Some of them thoughtlessly.

    Amongst good groups of humans who come together to fight for the earth there is contentious rivalry, disagreements and distrust, largely due to egos; both within each group and similar groups that should be banding together to fight the good fight.

    Just call me Jubal.

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    1. The Unapologetic Hippie Post author

      Darwinfish… the substance of your comment is right on. Percentages of the saints and sinners… well whatever they are, they are most likely equal. Curious about this 3% you mention. Last paragraph so powerful… how to cut through the ego stuff and pull together as one. I like the way you write, btw… very economical, very eloquent. Thanks. Phil

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  3. Will Feathers

    “May you live in interesting times ” so goes an old Chinese curse. We do indeed live in “Interesting Times” and we don’t belie
    ve we’re on the eve of destruction . . .

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    1. The Unapologetic Hippie Post author

      Will… Thanks for the comment. I guess you said it all, my friend. Do you have your ringside seat for the mayhem or shall we watch it from “a 1000 light years from home?”

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  4. leebalanarts

    Great article. I also believe modern technology has unprecedented influence and control over the expansion of institutions. Technology itself has become an institution. I think there are unpredictable variables involved with the emergence of artificial intelligence and digitalization. How societies and civilization adapts to new technology will have a disproportionate influence on survivability.

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    1. The Unapologetic Hippie Post author

      Lee, thanks for your comments and your insights. You pose a most interesting question… whether technology which many think will “save” us, has itself become an institution. We must keep in mind, and what I have hoped to do here in this article, is that societal change happens over a very long time. Once in a while, there is an abrupt change, but history has shown us societies and civilizations evolve or devolve at a snail’s pace, unknown to the participants of the time. Unfortunately, it is often hundreds of years after the fact that we realize where a society has gone wrong and what “instruments” have become “institutions.” But I hope if we can step back and look at ourselves from afar… in the longer and larger context of the evolution of a civilization… maybe there is a chance we can enlighten enough people to reform or circumvent our institutions peacefully. If not… ????

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  5. Norm

    A couple of notes and quibbles along with a big bravo!
    You seem to imply that hunter-gatherer societies are parasitic and not productive of added “wealth”. And then you talk about Mooki inventing the bow and arrow to more effectively hunt/diminish the natural “wealth” surrounding his tribe. So, is Mooki a productive parasite or what?

    I would point out that the hunter-gatherer 1st Nations living on the plains significantly transformed the ecological habitat such that the bison population exploded. That strikes me as productive.

    I would also point out that the reintroduction of wolves to a variety of areas drastically reduced the overpopulation of deer and elk; thereby, significantly increasing the growth of new trees and grasses, increasing the ability of multiple species to expand, decreasing the erosion of soils, increasing river/stream currents, increasing fish populations and changing the course of streams and rivers. Were the wolves parasites or producers?

    Going back to Mooki, he could not have kept his new tech secret. Any other member of society could, because of the simplicity and exposed nature of the bow and arrow, copy it. Interestingly, invention in western civilization until the 19th or 20th century was mostly open source. For example, Andrew Carnegie grew wealthy in the US because he used Bessemer’s process for making steel. Carnegie seems to have paid Bessemer exactly nothing other than compliments. I doubt that Eli Whitney was able to license his cotton gin to all the Southern plantation groups that built and used it. Reverse engineering was the American way (buy one, take it apart and copy it).

    But once the concept of intellectual property took hold, parasitism took hold of western civilization. Once one could withhold new discoveries from others’ ability to copy and use them, the new producer became a parasite. In your parlance, the concept of innovation became institutionalized by patent laws. I can think of nothing more parasitic than computer operating systems. Bill Gates and Microsoft are the greatest parasites in economic history (not to be confused with Hitler, Stalin, etc. in political history).

    As for civilization you are probably right regarding the classical, if generally self-serving, definition of civilization. But that word has become rather loosely used over the centuries. Would the Aztec society which was able to build healthy cities such as Tenochtitlan be more or less “civilized” than the French, Spanish and Italian which experienced plagues and pandemics on a regular basis due to their lack of sanitation in cities of equal density? Were 1st Nations more or less “civilized” and productive than modern America considering their far more healthy relationship with their environment?

    What constitutes “productive”? Our modern economic activities are most commonly measured by GDP. But that does not account for the negative consequences of destructive extraction techniques, widespread pollution, spreading chronic diseases as negatives. When we spend money to fix those and other negative impacts, that too is counted as productive.

    But, again, your concept is interesting and insightful. The notion that institutionalized activities lead to decline is, I think, spot on. And it applies at the micro level, especially. When popular movements become institutionalized, they tend to lose touch with their original purpose and become instruments of the status quo, which then causes them to atrophy and collapse.

    Thank you.

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    1. The Unapologetic Hippie Post author

      NSConrad, wow, this is exactly the kind of interaction for which I hunger! Thank you. Let me try to address some of your notes and quibbles. The bravos I will accept humbly.

      Words are indeed powerful and despite the considerable amount of writing I do, I still learn from people like you who point out the ways in which I may have misspoken or not been clear enough. Forgive me. I was trying to encapsulate an entire course in historical analysis into one article. I was merely trying to create a vocabulary and a context in which I could delve into this subject in more detail in future articles.

      I am tempted to edit my article to correct any misunderstandings. I will leave it as it is for now. I am sorry I used the word “parasitic.” It has negative connotations and stigmas. I should have used the word “subsisting” to describe the group of which Mooki is part. Mooki is a savage, barely post Neanderthal. Mooki represents man’s first use of tools and invention. Mooki is separated from the peoples I think of as First Nations by many thousands of years. First Nations, by the time contact was made with European “trespassers,” were highly evolved societies. So excuse me if anyone felt I was disparaging First Nation peoples.

      So let us talk about “subsisting” societies rather than “parasitic,” though I am using the term “parasitic” in its biological/botanical definition. A parasite lives off a host. Mooki is the parasite, the earth is his host. They have a symbiotic relationship and many may argue that is the healthiest relationship to have with the earth. (There are times I long to return to being a hunter/gatherer myself!) Mooki is not taking more than he needs, but is it consciously done? Or is it that bows and arrows are not enough to decimate the rabbit population? Early Neolithic Garden Cultures had subsistence (parasitic) agriculture. But were they able to produce a surplus so that the culture provided leisure time in which new inventions could be made? What I did not address was that though subsisting societies may not add to the wealth of the world, they also, for the most part, did not detract from it either.

      Also the *note at the bottom of the article. I am making generalizations and I am trying to create a context in which to view history, but just for convenience do I use categories or generalizations. In real life, as we all know, history is mushy and different aspects slide over one another. Time is relative, but we assign dates to history simply for our convenience. Keeping all that in mind, I could say that their have been “subsisting” societies who increased the wealth of the world, and there have been “producing” societies that killed themselves off by over-farming and depleting the earth of its nutrients. The 1st Nations may have increased the bison population, but was that intentional or just the fact that their hunting tools were not so effective as to wipe out the herds? Now with the introduction of the rifle… we have a different story. At any rate, there are always exceptions. I am just trying to bring my readers along with me so we can get more detailed in future articles.

      You bring up many questions which we could discuses for hours and they are excellent points. But I think your last two paragraphs let me know you understand where I am going: “The notion that institutionalized activities lead to decline is, I think, spot on. And it applies at the micro level, especially. When popular movements become institutionalized, they tend to lose touch with their original purpose and become instruments of the status quo, which then causes them to atrophy and collapse.”… so well said! This was basically at the heart of my article. This and the concept that whoever controls the surplus, controls investment and thereby the incentives to invent. I think you can guess where I am going with this! Thank you for a great comment… could have been an article in itself. Keep them coming!

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      1. Norm

        Phil,

        Thank you for the kind remarks.

        With regard to the bison population, that appears to have been deliberate. It also had little or nothing to do with the bow and arrow technology’s limitations. It had to do with the creative use of fire — regularly burning large areas that created the ecology for the tall prairie grasses that allowed the bison to proliferate, which synergistically kept the prairies fertile because of the small size of the bison hoof relative to their weight, which punched organic matter into the soil as they migrated. That appears to be why the Canadian Prairies and the American Great Plains were so fertile and why modern farming practices have so significantly diminished their nutrient capabilities.

        As you know First Nations existed and thrived throughout the western hemisphere long before Columbus and long before Leif Erikson arrived. In almost every case, that which we think we know about them is utterly false and self-serving. The pre-Columbian population was far greater than is generally acknowledged. The trading networks were far longer than is generally acknowledged. The method of settling disputes was far more peaceful than is generally known. Their technologies were different but in many cases far superior to that of Europeans (it is no accident that the major technological advantages enjoyed by the Conquistadors were firearms and ideologically validated sadism). The major technological advantages the First Nations developed were, among others, domesticating vegetables, nuts and fruits (about 50% of what we eat today was first cultivated in N Am, including tomatoes and potatoes — sorry Italy, sorry Ireland and England).

        But I would also suggest that almost everything we think we know about Neanderthal man is just plain wrong. It appears that modern man is, in most so-called races, directly related to them, Caucasians/Europeans especially, as Cro-Magnon and Neanderthal frequently interbred. [An interesting bit of fiction about Neanderthals is (Lord of the Flies fame) William Golding’s book, The Inheritors.] The science of Neanderthal intelligence, sociability, etc. has been known for many decades. That knowledge seems to have escaped popular culture as It is inconvenient for most self-congratulatory storylines of Western superiority. Present company excepted, of course.

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