Tag Archives: continuum

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.

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