In which period did the wealth disparity between the lowest classes in society and the highest classes reach the astronomical gap it is today?

by themoobster

So I'm actually a classical historian myself and was discussing Solon's classes based on wealth in Classical Athens with my students. Under that system we can see even the to be one of the rare few to be considered in the richest class of Athenians could have a wealth of only 20 times the wealth needed for a family of 5 to merely eat and survive.

Now this is obviously a miniscule amount of wealth disparity compared to the modern day (for example here in Australia the Prime Minister gets paid 40 times the amount that the government believes is needed for a person to literally survive and nothing else, and he gets paid pittance compared to the owners, board members, etc. of large businesses).

Now my students asked how/when that disparity changed so much, I had to guess around the Industrial Revolution... but I'm not a modern historian or an economics historian so I'm hoping there's some experts on here that can help.

Tiako

I would recommend Walter Scheidel's The Great Leveler for this, it is to my knowledge the most complete attempt to track rates of inequality throughout history. His basic conclusion is that current rates of inequality are fairly typical historically, the amount of wealth captured by the 1% today is pretty close to what it was under the Roman empire.

It is difficult to say how far back this goes, for the vast majority of humanity's time on the planet social stratification was relatively low but how we got from there to here is unclear and subject to debate. The old just so story (Scheidel unfortunately repeats) is that the development of agriculture allowed for wealth accumulation for the first time, and from there it is a straight line to Bill Gates. However we are safe rejecting this narrative now for, as the anthropologist David Graeber pointed out, for much of the Neolithic communities across the Mediterranean region tended to be fairly egalitarian. This is a far cry from perfectly egalitarian of course, and there are all sorts of ways inequality can manifest that are undetectable to archaeology, but much less than what would come later. I would tentatively place the origin of massive inequality in the Bronze Age, with the development of states, palace organization and the exultation of individuals.

Now that said, it is true that inequality developed and then stayed constant, Scheidel merely argues that roughly modern levels of inequality are the norm. However he identifies four things that tend to cause drastic reductions in inequality: disease, mass mobilization warfare, social upheaval, and systems collapse. With classical Greece he points to the state of near constant warfare that kept inequality low (I would also add social upheaval given the development of Athens radical democracy). Perhaps more interesting to readers today, however, is that the relatively low inequality of the post WWII era (to which modern trends are unfavorably compared) was quite unusual historically, as the world exited a period of unprecedented economic upheaval and military destruction.

(As an addendum, the point is not that lowering inequality is impossible, it's actually fairly straightforward (raise taxes, distribute benefits), but rather that political policy is not often oriented to lowering inequality given that in a hierarchical society those with wealth can parlay that into political power. Mass mobilization warfare forces elites to bargain with lower orders in as they need manpower.)