History of Civilisation - A Story of the Rich versus the Poor

Jul 2019
91
Pale Blue Dot - Moonshine Quadrant
#51
The state always had control of the currency - somebody has to (I suppose Bitcoin might be an example of a currency without external control but, on the other hand, the managers of Bitcoin are utilising block-chain processing and a complex algorithm to ensure proper management of it). When a state decides to use money instead of bartering, it must decide what the denominations are, what their value is, and how much is to be issued. So it must keep a grip on currency control, mustn't it? Similarly the free market does not mean a free-for-all, some regulations must be put in place to make a market eg weight standards so that everyone is using the some weight and volume measures.
Actually, until the last few centuries the state has seldom controlled the currency when it was gold, silver of some other commodity. The most it could do was debase no or not debase the coinage that contained the gold or silver.

Money arises on the market as a commodity valued by all, or almost all, voluntary traders that allows them to escapes the limitations of barter. Barter is abandoned by market-based decisions and not a political edict. Where you have chickens and eggs to offer me for my vegetables that you want but I want beef and you have none. If there is a commodity everyone values (like gold or silver) then I can accept that from you for my vegetables and use it to acquire the beef I want from someone else that values the commodity money.

Or course if a ruling state authority, under a wise ruler - there have been a few - accepts the market’s selection of commodity-based money, its authority can increase it uniformity and efficiency and expand that acceptance over a wider area and thus dramatically benefit the voluntary economy. But when a state organization tries to command what is money backlash is inevitable. Bitcoin today is just a market response to the fact that the legal tender currencies commanded by the political state are increasingly manipulated by political authority for political reasons and thus dysfunctional. The current American President is far from the only one – although he is the most blatant - that has sought to bend the Federal Reserve to his will for reasons of electability.

The rich in power did distort the free market by such practices as selling (to someone rich, obviously) the right of monopoly over the trade of some essential goods. In the UK, such practices were stopped in the 19th century, as the state became more democratic. The corn laws, which you mention, are an example of the rich dominating the state and using state power to feather their own nests - ultimately at the expense of the poor of course.
I am claiming that the rich have increasingly captured the economic processes whereby wealth is generated and controlled – that things like Corn Laws were just a more obvious example. This process has been the most obvious in the U. S. where initially there was no aristocracy and an almost unprecedented of social and economic equality – and that the economic equality has steadily regressed as the government, almost always deeply influenced by the wealthy, has exerted growing control over the American economy.

New capital is formed like everything else, work is done to produce it. Maybe those who do the work make capital should own it. Just a thought.
Those that create capital most definitely should own it. But in Western Civilization today there is a massive process of wealth transfer that has been underway for a century or more. If we ignore the political rhetoric which is used to justify this transfer from one group to another while proclaiming certain beneficiaries and look at the condition of the poor and middle classes in since, say, WWI that with the exception of Ludwig Erhard’s West German miracle (where he gutted economic controls imposed by the victorious Allies) it seems quite clear to me that the wealth is being transferred up rather than down and is fueling the populist revolt almost everywhere.

In closing I do want to point out that the non-state institutions of past were often not free of coercion. For example, the church, the employment guilds, and the institution of marriage were all in some degree coercive. And it was that coercion that helped to drive the social revolts against all of them. And there is little doubt in my mind that the idea of a democratic basis for the exercise of political authority that has, to a significant degree, replaced them was well-seasoned with the belief that the lower classes would benefit. And in certain brief periods they have – especially in culmination of the Enlightenment.

But how much of that benefit can be ascribed to the political state and how much to economic growth by social, not political, means is an open question. Certainly, current conditions in American cities and the populist political reactions many places reflect the fact that those gains have been reversing for a good while now and citizen-subjects are becoming radical even though democratic institutions have not (yet) been overthrown.

But economic growth has slowed and the blame (at least in America) must be laid at the feet of the political state. Looking back during the critical years of the aftermath of WWI and the economic aspects of the response to the Great Depression, journalist and classically liberal economic author Garet Garrett wrote:

There are those who still think they are holding the pass against a revolution that may be coming up the road. But they are gazing in the wrong direction. The revolution is behind them. It went by in the Night of Depression, singing songs to freedom…There are those who have never ceased to say very earnestly, "Something is going to happen to the American form of government if we don't watch out." These were the innocent disarmers. Their trust was in words. They had forgotten their Aristotle. More than 2,000 years ago he wrote of what can happen within the form, when "one thing takes the place of another, so that the ancient laws will remain, while the power will be in the hands of those who have brought about revolution in the state."

There has been a revolution in the state and the Enlightenment ideals and its associated political concepts have disappeared even though democracy is largely still operative. If democracy is not the problem, then the solution cannot lie there either.
 
Dec 2011
2,354
#52
I do not believe there can be a civilization without economic growth because the capital formations necessary for creative leisure would be lacking.
Then you are mistaken. For the sake of brevity, can we concentrate on pre-industrial societies, let's say before 1200? There have been periods of real growth, particularly in the first century Roman Empire, but that proved to be temperory. Overall and by and large the vast majority of people were, for thousands of years, in grinding poverty, certainly by our standards. They simply did not have "creative leisure". To them, the routine of work, such as ploughing, seed sowing, harvesting, threshing etc etc etc where immutable, never-changing, facts about existence on Earth, there would be good harvests but there would be bad ones too, and famines and plagues etc. And this went on for the thousands of years of civilisation up to 1200.

Even in ancient civilizations there were very large concentrations of wealth that was produced by someone – There is, of course, considerable overlap between the two but that overlap was not complete. In any civilization there is stratification with intermediate classes – merchants, land owning famers, the Metics in ancient Greece, traders and craftsmen in ancient Persia, etc.
Yes, the large concentrations of wealth was produced by the people who did the work ie the ordinary workers, and they formed the vast majority of the population. What would now be called "middle class" - a tier of, shall we say, intelligentsia who were able, by superior knowledge, to produce more goods and services, were only a tiny part of the population - together they didn't produce much.

Capital should be (a normative claim I recognize) managed by its legitimate owners, the people that have created it.
The workers will have created it. Eg, if land is cleared of trees to grow crops, thereby creating the fixed capital of productive land, the people who chopped down the trees created that. Or if the capital is a house, the building workers created that. Now, what if all the people who created the houses and farm land are long dead, who should get the capital then?

I see no reason no reason why his/her heirs should not inherent the wealth/capital.
I see no reason why they should (I don't agree that they should be called "heirs"). You said that the creators of capital should be the ones who receive it. There are many examples of people who have got a whole lot of capital which they didn't do anything to create - they inherited by accident of birth.

Traders, spice merchants, metal workers, potters, jewelers, produce markets, fairs, etc. – basically anyone engaged in voluntary trade; and they existed in societies like China, Persia, and the Muslim empire that never even sniffed democracy.
In what way did these people co-operate, specifically on the matter of distribution of resources? Did they not compete against each other? Are you talking about trade guilds. How did they operate? Did they have monopolies?

Actually, until the last few centuries the state has seldom controlled the currency when it was gold, silver of some other commodity. The most it could do was debase no or not debase the coinage that contained the gold or silver.
Sorry that is wrong. States in the past had complete control over the currency, which included copper by the way. The king or emperor put the impression of his head on all coins, so that there was no dispute about the matter. The king's ministers decided how many coins were issued, what they looked like, what weight they were etc etc. The ability to debase was one tool that they could use for good or ill, the main thing being that nobody could stop them doing that.

Money arises on the market as a commodity valued by all, or almost all, voluntary traders that allows them to escapes the limitations of barter.
That's how currency arose to begin with, when people found gold and silver, and realised that people really liked owning these metals, it was found that small amounts of either metal could be used to make quite large purchases (of, say, cattle), which of course had the effect of oiling the wheels of trade. But later it appears that the super-wealthy eg the kings, had ample supplies of precious metals and decided to stamp their heads on pieces of metal and produce coinage, either as a benign attempt to foster trade, or as a nefarious attempt to claim ownership of all precious metals.

But when a state organization tries to command what is money backlash is inevitable.
No backlash evident for thousands of years.

I am claiming that the rich have increasingly captured the economic processes whereby wealth is generated and controlled – that things like Corn Laws were just a more obvious example. This process has been the most obvious in the U. S. where initially there was no aristocracy and an almost unprecedented of social and economic equality – and that the economic equality has steadily regressed as the government, almost always deeply influenced by the wealthy, has exerted growing control over the American economy.
Perhaps there is some common ground between us here, but I am trying to point to you the real reason why the rich get richer, leaving the rest relatively lacking. Think about how the current President acquired his wealth.

But economic growth has slowed and the blame (at least in America) must be laid at the feet of the political state.
Has economic growth slowed? It is no longer exponential, but I imagine (haven't looked up the stats yet) that the increase in GDP per capita is more than it was in, say, the 1960s. What I means is, suppose GDP was $10,000 a year (in today's money) in the 1960s, growth then was about 4%, so the increase was $400 a year. Now growth is about 2.5%, but the GDP is $20,000 a year, making an increase of $500 a year.

But the question is, who is getting all those extra $500 a year per person?
 
Jul 2019
91
Pale Blue Dot - Moonshine Quadrant
#53
There have been periods of real growth, particularly in the first century Roman Empire, but that proved to be temperory. Overall and by and large the vast majority of people were, for thousands of years, in grinding poverty, certainly by our standards. They simply did not have "creative leisure". To them, the routine of work, such as ploughing, seed sowing, harvesting, threshing etc etc etc where immutable, never-changing, facts about existence on Earth, there would be good harvests but there would be bad ones too, and famines and plagues etc. And this went on for the thousands of years of civilisation up to 1200.
I agree that the vast number of people throughout history were too poor to even conceive of leisure time. My attempted point was that for a civilization to exist there must be a store of capital that would allow some class the free time required to pursue those cultural things associated with civilization, that capital is created by someone, and that such formations of capital arose through voluntary economic activity – even if they appropriated afterward via coercion – and of course coercion has been my theme all along.

The fact that real growth was temporary implies that something stopped it. There can be natural causes but more often it has been violent activity (war) by the coercive state – that is certainly what caused the collapse of the Roman Republic. The growth you mention in the first century AD was largely derived from violent conquest – an appropriation of wealth from Britain, Europe, North Africa and the Near East – and when conquests halted the fact that Rome organic growth begun to decay much earlier, leading to the Gracchi, became apparent.

We seem have different starting points. I think you start with rich and poor my search for why starts with those acts of coercion by which stores of existing capital are appropriated by a ruling class.

Yes, the large concentrations of wealth was produced by the people who did the work ie the ordinary workers, and they formed the vast majority of the population. What would now be called "middle class" - a tier of, shall we say, intelligentsia who were able, by superior knowledge, to produce more goods and services, were only a tiny part of the population - together they didn't produce much.
In a way your first here sentence supports my contention. The people doing the work - and that includes the middle class that was not small everywhere – generated the wealth that was often appropriated by coercive methods. Throughout antiquity the Mediterranean was filled with tradesmen that generated much wealth voluntary - from Tyre and the Phoenicians in general, Egypt, the Greece, Carthage, Rome, and after them the Islamic Empire developed great endeavors and innovations in trade

I see no reason why they should (I don't agree that they should be called "heirs"). You said that the creators of capital should be the ones who receive it. There are many examples of people who have got a whole lot of capital which they didn't do anything to create - they inherited by accident of birth.
In the absence of appropriation by theft, I see no justification why the state (or the church in an earlier era) would have any claim on the property of anyone who has died – that in my view is just more expropriation with a different rationale. This gets in to a property rights discussion which is a complicated subject that is way out of scope here but I do prioritize family before church or state.

In what way did these people co-operate, specifically on the matter of distribution of resources? Did they not compete against each other? Are you talking about trade guilds. How did they operate? Did they have monopolies?
Trade itself is a cooperative undertaking; otherwise it is called theft – which is usually what states do. The distribution occurs through an unhampered market that competes on price and quality or as you said when you opened this thread: “Over time, industriousness, intelligence and sheer luck would result in some families accumulating more capital than others.” There is no doubt that rich and poor will develop. But if the rich lose their industriousness, intelligence or luck they will squander their wealth. It is coercive authority that allows the rich to stay rich despite the loss of those attributes that made them rich.

Yes I was talking about guilds and they did have monopolies typically enforced by ruling authority. Guilds are an example of what I was referring to when I noted that non-state institutions of past were often not free of coercion.

Sorry that is wrong. States in the past had complete control over the currency, which included copper by the way. The king or emperor put the impression of his head on all coins, so that there was no dispute about the matter. The king's ministers decided how many coins were issued, what they looked like, what weight they were etc etc. The ability to debase was one tool that they could use for good or ill, the main thing being that nobody could stop them doing that.
Outside of China (Warring States Period, Han Dynasty, the Southern and Northern Dynasties) where private minting came and went, rulers did typically control of coin creation. But their ability to create new coins was limited by their wealth – much of which was appropriated via force. So they could create coins and advertise themselves (as minimally educated American presidents build libraries today), but they could not increase the actual money supply. When they debased coins (an ongoing process in the Roman Empire), they were stealing from existing holders of wealth and transferring that wealth to itself. So there was no good or ill about it. It was theft plain and simple and the theft of monetary debasement today is a major contributor to modern political ills.

But later it appears that the super-wealthy eg the kings, had ample supplies of precious metals and decided to stamp their heads on pieces of metal and produce coinage, either as a benign attempt to foster trade, or as a nefarious attempt to claim ownership of all precious metals.
Rulers had ample supply of precious metal when conquests were successful but not when hunting was poor; then the situation reversed and debasement was typically carried out – and when hunting was good that again is coercion by the wealthy to add to their wealth by appropriating from others (your zero-sum game).
 
Jul 2019
91
Pale Blue Dot - Moonshine Quadrant
#54
No backlash evident for thousands of years.
The Great Stop by Charles II bankrupting his goldsmith allies triggered a backlash that eventually led to the Bank of England – and that initiated the industrial boom-bust cycle starting with the South Sea Bubble. The backlash against assignats helped the rise of Napoleon. Few are interested but currency destruction in the Southern Confederacy also triggered a backlash.

The Bolsheviks were partially enabled by the Czar’s monetary debasement and Lenin consciously used the technique to overturn Russia socially:

Lenin:

The simplest way to exterminate the very spirit of capitalism is therefore to flood the country with notes of a high face-value without financial guarantees of any sort.

Already even a hundred-ruble note is almost valueless in Russia. Soon even the simplest peasant will realize that it is only a scrap of paper, not worth more than the rags from which it is manufactured. Men will cease to covet and hoard it so soon as they discover it will not buy anything, and the great illusion of the value and power of money, on which the capitalist state is based will have been definitely destroyed.

This is the real reason why our presses are printing ruble bills day and night, without rest.

This is exactly what the West is doing today in slow motion.

Hitler was a backlash dramatically assisted by currency destruction in the Wiemar Republic.

The current backlash is obvious in the polling booths on three continents all over Western Civilization – to say nothing of riots in France and street clashes in the urban U. S. (and Brazil soon enough unless I miss my guess.) Democracy-based systems losing their mind don’t just happen randomly.

Indeed, the unprecedented longevity of English democratic traditions is in no small way related to their generally wise treatment of their currency.

Charles II was a problem of course but Isaac Newton eventually straightened out the money situation when he was at the mint; after the banking crises of the late 18th century and the bank panic-depression of 1819, intelligent currency reform occurred around 1825; and the panic-depression of 1837-38 led to the Currency school debate that was remarkably intelligent and led to the Peel Act of 1844. Churchill’s egoistic mistaken valuation of the Pound when he was at the Exchequer caused serious export problems in the 1920’s.

But all and all the English took good care of their money. They seem to have a reservoir of healthy common sense that emotional and excitable Americans usually lack. Even when England's empire and war had financially exhausted it, its leadership sanely, and relatively peacefully, gave up empire without all the kicking and screaming exhibited by most decayed empires - including the the U. S. today.

Perhaps there is some common ground between us here, but I am trying to point to you the real reason why the rich get richer, leaving the rest relatively lacking. Think about how the current President acquired his wealth.
Trump's father made a fortune by building and selling housing for American soldiers and their families in World War II. In a way he was a war profiteer, although apparently not to the extent others have gained from America's continuous warfare.

Trump has maintained his wealth the same way many rich people have done: borrow large amounts of money and pay back the debt with devalued currency. It is a cynical and modern game where the rich profit from the ancient theft of currency debasement. Of course the poor (and non-gamblers of the middle class) cannot play. They can only suffer from the effects of devalued money. And the number of allegedly democratic politicians in the last two generations that have complained about the process can be counted on one hand.

Advocates of democracy are in an existential crisis over the outbreak of emotional chaos in the American democratic process. But Plato, Aristotle, and later Polybius would recognize what is happening and the American Founders also were also well-informed about the end-game in pure democracies. Although many commented on democracy, Madison in Federalist #10 is probably the most well-known:

Democracies have been found incompatible with personal security or the rights of property; and in general have been as short in their lives as they have been violent in their death

You and I have much the same concerns about the process of theft; I hold that modern thieves have largely traded the ancient weapon violence for the capture of the state (even the democratic state) where the process goes on under the rubric if the social contract – a non-historical model of political society the ruling elites have been violating, which singing otherwise, for generations now.

Has economic growth slowed? It is no longer exponential, but I imagine (haven't looked up the stats yet) that the increase in GDP per capita is more than it was in, say, the 1960s. What I means is, suppose GDP was $10,000 a year (in today's money) in the 1960s, growth then was about 4%, so the increase was $400 a year. Now growth is about 2.5%, but the GDP is $20,000 a year, making an increase of $500 a year.

But the question is, who is getting all those $500 dollars a year per person?
Your last question first: the established wealthy are getting that $500 a year per person as they have first access to the new money before debasement works through the economy. And when boom turns to bust, the value of money rises in the ensuing deflation, as it has done multiple times in my lifetime, the banks of Wall Street will be bailed out while Main Street and the middle class will not be rescued; because bailouts don’t trickle down either.

Economic growth in the U. S. has badly slowed. Some, given stagnant (at best) real wages, believe true growth has reversed for all but the upper crust in the American neo-mercantilist system.

GDP is a largely bogus measurement of growth popular with folks seeking to quantify and measure value when value is a subjective, personal concept and there are no constants in economics. Even the Economist is starting to sour on the concept.

The trouble with GDP

If you look at the GDP equation you will see no factor for debt. There is an implicit assumption of stagnant debt levels - that private and government spending embraces both borrowed money that is spent but retired debt reduces reduce spending. So new debt, public and private, is spent and thus counted in the GDP but is not deducted from the GDP until it is retired.

Since the year 2000 the U. S. federal government alone has increased the national debt by some $18 trillion dollars so the GDP snapshots have been overstated by that amount. Were state, and local public debt increases and private increases in debt (personal and corporate) to be factored it the alleged growth rates would shrink even more.

On top of that all of America’s military hardware expenditures are counted as growth – but what does a fleet of aircraft carriers, missiles, submarines, and equipment destroyed in Middle Eastern deserts add to the wealth of a culture?

And don’t get me going on the fact that the house my parents bought in 1964 for $17,900 dollars is now valued at well over $300,000 when it is the exactly same house now 55 years older; and if some fool buys it from my sister that expenditure will also count as economic growth. What is being called growth is, in fact, a measure of money debasement and capital formation distortions.

The Economist article talks about inflation and the problems of its measurement – but the problems are much bigger than what the Economist talks about. Reduced quality is an effect of inflation that cannot be measured as is shortened lifetime that can only be recognized after the fact.

Calculations like GDP are the kinds of often futile quantification that caused Paul Samuelson (Nobel Prize 1970) to absurdly claim in his text book (13th edition) as late as 1989, right before the Berlin Wall was torn down and Soviet Communism collapsed, “The Soviet economy is proof that, contrary to what many skeptics had earlier believed, a socialist command economy can function and even thrive.” Over a decade before that book some Soviet citizens had been moving back into caves because the housing shortage was some bad.

They are also the reason why Friedrich Hayek, who rejected the very methodology of modern economics, entitled his 1974 Nobel Prize acceptance speech The Pretense of Knowledge.

There American middle class Baby Boomers moved radically to the right in 2016 as they drift toward poverty and the Millennial generation is now moving radically left because they sense they will not achieve middle class security – the laws governing student debt in America are not far removed from a re-imposition of indentured servitude. No one can expect either group to vest themselves in a system that drives them toward poverty when compared to the life style of their predecessors.

And the sociology of it is the same that helped bring Mussolini and Hitler to power and the same as that which drove the Optimates and Populares violent struggles in ancient Rome – the destruction and subsequent radicalization of the middle class.
 
Last edited:
Dec 2011
2,354
#55
Thank you for your replies, but I am not convinced of much of what you say, and I think we are straying from the main point, so i will here ask specific questions to see if we can agree on something.

In the OP I said.
Civilisation involves the production of fixed capital eg cultivable land, irrigation channels, fences and walls, functional buildings, that are critical to producing other things of value......Over time, industriousness, intelligence and sheer luck would result in some families accumulating more capital than others. On balance, those with a relatively large amount of capital would be able to retain it through famines, and other vicissitudes, that would ruin those with only a small amount. Thus the tendency would be for the richest to get richer and the condition of the poor would relatively reduce.
Do you agree with this basic picture of how the distribution of wealth became unequal, without real forced coercion? I think you have said that you do, though you pointed out, I think, that the poorer people would only be relatively poor - everyone would become less poor (I think you implied) in this system because the process of improving the land to make it more productive will of course result in more overall product, thus everyone has more than they did before.

My attempted point was that for a civilization to exist there must be a store of capital that would allow some class the free time required to pursue those cultural things associated with civilization, that capital is created by someone, and that such formations of capital arose through voluntary economic activity – even if they appropriated afterward via coercion – and of course coercion has been my theme all along.
Is taking the capital that a family has accumulated, and giving it to the offspring of the owner who has just died "coercion"? Can you give examples from history before 1200 showing what you mean by coercion within societies (not between societies)?

We seem have different starting points. I think you start with rich and poor my search for why starts with those acts of coercion by which stores of existing capital are appropriated by a ruling class.
I start with a notional primitive society which, let's say, are the first group to reach a fertile valley, and they divide the land up equally between them, all with the same intent of making the land productive. My basic point is that inequalities in wealth will result from various factors, one of which is luck, and that these inequalities will become larger over generations, because those that happen to acquire the greatest wealth will naturally find it easier to gain more. I am stating that, even with no coercion, inequalities can and will arise. Do you agree?

In the absence of appropriation by theft, I see no justification why the state (or the church in an earlier era) would have any claim on the property of anyone who has died – that in my view is just more expropriation with a different rationale. This gets in to a property rights discussion which is a complicated subject that is way out of scope here but I do prioritize family before church or state.
But you see, WHO is to decide where an owner's capital should go when he is dead? Let's say he leaves a house and some land. Some guy comes along and decides to occupy it. Will there be anyone to stop that happening? Should it be stopped?

Trade itself is a cooperative undertaking; otherwise it is called theft – which is usually what states do. The distribution occurs through an unhampered market that competes on price and quality or as you said when you opened this thread: “Over time, industriousness, intelligence and sheer luck would result in some families accumulating more capital than others.”
It's called competition (you said "competes"), the trader tries to buy things as cheap as possible and sell them on as expensively as possible. There is no need to co-operate with another trader selling the same goods; if he does that could be the beginning of a monopoly.

No backlash evident for thousands of years.
The Great Stop by Charles II bankrupting his goldsmith allies triggered a backlash that eventually led to the Bank of England – and that initiated the industrial boom-bust cycle starting with the South Sea Bubble. The backlash against assignats helped the rise of Napoleon.
So, as I said, no backlash for the thousands of years of civilisation up to the 17th century.

Trump has maintained his wealth the same way many rich people have done
But how exactly did he FIRST ACQUIRE his wealth?
Your last question first: the established wealthy are getting that $500 a year per person as they have first access to the new money before debasement works through the economy.
You could be right, so the question is how did these established wealthy become wealthy?
What is being called growth is, in fact, a measure of money debasement and capital formation distortions.
I cannot see that, a lot more people have a lot more things, of greater quality, than they did in 1964.
 
Jul 2019
91
Pale Blue Dot - Moonshine Quadrant
#56
Do you agree with this basic picture of how the distribution of wealth became unequal, without real forced coercion? I think you have said that you do, though you pointed out, I think, that the poorer people would only be relatively poor - everyone would become less poor (I think you implied) in this system because the process of improving the land to make it more productive will of course result in more overall product, thus everyone has more than they did before.
Yes a natural, non-coerced distribution of wealth will be unequal in some degree. That is not a problem for me. The magnification of that unequal distribution by the use of force is where I develop a problem. In the absence of something that destroys wealth, man-made or otherwise, the general level of wealth, even with stratification, can be expected to rise.

Is taking the capital that a family has accumulated, and giving it to the offspring of the owner who has just died "coercion"?
No. The structure of your question seems to imply that someone other than the owner is to make the decision – maybe I am wrong in that. But the idea of ownership naturally implies the right to dispose of it as the owner sees fit.

I suspect we will remain at loggerheads over this issue (if my reading of the question is accurate)

Can you give examples from history before 1200 showing what you mean by coercion within societies (not between societies)?
The best known I expect are the Proscriptions of Sulla in 82 BC and the proscriptions in 43 BC organized by Octavian Caesar, Marcus Antonius, and Marcus Lepidus. Both represented wholesale murder to eliminate enemies, acquire property and wealth, and in the case of Sulla at least to refresh the treasury of Rome.

Plutarch, talking about Sulla, mentions a list of eighty victims, followed by another list of 200 the next day, while Appian reports 40 senators and 1,600 Equestrians proscribed during a speech to the assembly of the people. Both writers agree it was a terrible massacre.

Octavian’s list included wealthy people, senators, knights, and republicans such as Sextus Pompey and Cicero. There were 2,000 names on the list in total, and a handsome reward of 2,500 drachmae for bringing back the head of a free person on the list (a slave's head was worth 1,000 drachmae); the same rewards were given to anyone who gave information on where someone on the list was hiding. Anyone who tried to save people on the list was added to the list.

Plutarch draws on so Idomeneus to describe Themistocles associating several people against Aristides, and impeaching him when he gave in his financial accounts that caused him to be condemned of robbing the public.

Plutarch also discusses an action taken commenced against Pompey because his father had allegedly embezzled the public treasure. But Pompey traced the principal thefts and charged them upon one Alexander, a freed slave of his father's, and proved to the judges that he [Alexander] had been the appropriator.

Cassius Dio mentions a Bulla Felix who roamed the empire at the beginning of the 3rd century; allegedly the leader of a group of bandits that consisted of 600 men and included runaway slaves, imperial freedmen, and petty criminals who operated in a Robin Hood –like fashion. There is some question as to the historical accuracy of Cassius Dio.

Back in 393 B.C Isocrates in Greece in his work Trapezitica there is a forensic speech in which Isocrates the son of a favorite of Satyrus, king of Bosphorus. The son accused Passio, an Athenian banker, of misappropriating a deposit of money entrusted to him. Though we have no documentary evidence of the trial’s verdict, it is certain that Passio was either convicted or arrived at a compromise with his accuser.

There were also water thefts from the aqueducts.

You are not suggesting that coercive theft did not occur - correct?

I start with a notional primitive society which, let's say, are the first group to reach a fertile valley, and they divide the land up equally between them, all with the same intent of making the land productive. My basic point is that inequalities in wealth will result from various factors, one of which is luck, and that these inequalities will become larger over generations, because those that happen to acquire the greatest wealth will naturally find it easier to gain more. I am stating that, even with no coercion, inequalities can and will arise. Do you agree?
Wealthy people often squander they wealth, especially inherited wealth. Many have noted that had Donald Trump put his original money in a mutual he would be wealthier today. Weath does clearly provide advantages, but even Marx noted that the top crust of America changed all the time - untill mercantilism returned, however.

You are starting at a theoretical starting point of equality, as did John Rawls in his Original Position in his Theory of Justice – that is an honorable political concept relating to rights but not evident in biology or in any known economy. It is not obvious to me that inequalities I have admitted will, and must develop, will grow beyond a certain, undefinable point in the absence of coercion –in my opinion, the inequality would nothing like the rapacious social structures we have seen repeatedly in history.

I also start at a theoretical point in my lack of coercion – which occasionally has clearly existed.

Given our different starting points and focus, our lack of agreement seems assured.

But you see, WHO is to decide where an owner's capital should go when he is dead? Let's say he leaves a house and some land. Some guy comes along and decides to occupy it. Will there be anyone to stop that happening? Should it be stopped?
If there are legitimate heirs who have evidence of their claim, yes.

So, as I said, no backlash for the thousands of years of civilisation up to the 17th century.
I don’t see where you mentioned the17th century – maybe I am missing it.

But either way there have been multiple instances of hyperinflation in ancient China and Diocletian reformation of Rome’s the mints in 284 AD blew up in his face and on 301 AD in desperation, Diocletian issued his infamous “Edict of Maximal Prices.” This imposed prie controls on the victims of his inflation. Those who were caught selling for higher prices than the government limit were put to death.

The Roman Historian Lactantius described it in On the Deaths of the Persecutors c. 315:

“Because his various iniquities were causing huge inflation, he tried to decree a law about the price of market goods; then, much blood was spilled for small and cheap items, and amid the fear, nothing was put up for sale at all, and inflation flared up even worse until after many deaths, the law had to be repealed."

There have always been back lashes when the money is badly compromised.

Trump has maintained his wealth the same way many rich people have done
But how exactly did he FIRST ACQUIRE his wealth?
He inherited it, which assumed I implied when I mention how his farther got wealthy. As I have indicated more than once I have no problem with inheritance. If you do, we are again stuck at different normative assumptions.

Now if some very radical person wants to deny rights of inheritance for wealth acquired helping the state go to war or even repudiating similar wealth transfers, I am all for it. But that means we have to stop the state from going to war and/or stop the state from transferring wealth. I am not holding my breath on that.

I cannot see that, a lot more people have a lot more things, of greater quality, than they did in 1964.
Middle class wages have been stagnant or falling since inflation began to heat up badly in 1964 (especially after Nixon’s currency reform in 1971 – complete with price controls that were admittedly milder than Diocletian’s.

The poor have sunk radically – compare American ghettos in 1964 to today. They are larger, more violent, more crime infested, more diseased, and hopelessness has risen dramatically. This is not even questioned by anyone.

A very large percentage of Americans have little or no savings (which earn no interest anyway) and the ones that can retire will do so with less than their parents had. And it is commonly accepted that a large scale pension fund bust is just around the corner – which most observers pointing at Illinois/Chicago as ground zero; although some bet on Connecticut, New Jersey, or possibly California as potential bubble bursters.

Our inexpensive electronic gadgets and the mass media are our Circuses and the food dole is the other half of Rome's Bread and Circuses while the upper crust thrives - also just as in Rome.
 
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2,354
#57
Given our different starting points and focus, our lack of agreement seems assured.
I think you are probably right, but I think we might at least have understanding of each others positions, and can agree to disagree.
Yes a natural, non-coerced distribution of wealth will be unequal in some degree. That is not a problem for me.
Yes, it's probably impossible to have complete equality in the distribution of wealth, and equality may not even be a good thing to aim for. Some degree of inequality is inevitable, if only because some people work harder than others. And my starting point in this discussion was to show how inequality could naturally arise, even in a primitive society where they started by giving out the same amount of land to each family (and I am not actually saying that primitive societies actually started out like that, I can well believe that there was inequality at the start, I am just saying that even IF they started out equal, they would tend to become unequal over time).

So I think we agree that some degree of inequality is OK, with the basic proviso that the wealth people acquire should be through their own application (of work and ability) and that, of course, if some have taken their wealth by force (coercion)- well that's obviously theft and neither of us agree with that.

Do we agree that the level of inequality is something to be concerned about? If the CEO is getting a salary a thousand times that of the average worker, need we be concerned? Well maybe that CEO is so good that he creates employment for thousands of employees, so such an imbalance is not my immediate concern.

Of more concern is the imbalance of capital holdings ie millions of people having almost no capital, some having a chunk of capital but has nearly as much of debt, and a small percentage having most of the capital. By capital let's focus on company ownership, which comes down to equity (shares in companies). As shareholders, those are the people with, not only the wealth, but the power. It is that type of inequality that is of real concern.

Is taking the capital that a family has accumulated, and giving it to the offspring of the owner who has just died "coercion"?
No. The structure of your question seems to imply that someone other than the owner is to make the decision – maybe I am wrong in that. But the idea of ownership naturally implies the right to dispose of it as the owner sees fit.
The owner is DEAD. He cannot do anything, he can't dispose and can't see fit. So a decision has to be made by the living as to what to do with the capital he left. Who is to decide how to do that?

Thank you for your long list of coercive actions carried out in classical times by rich and powerful people. I expect that most of them were extra-judicial and we both agree that seizing the wealth of people by killing them first and just taking it is not the way that a civilised society should behave, because, among other things, such robbery will disincentivise people from building up wealth by honest application. Some of the examples seem to be about the constitution of the state allowing such actions to be taken, and I think we both agree that such practices are not good for a well-organised economy.

I had asked the question to get a handle on what you mean by coercion. We agree (basically) that coercion should not be used, though, at the same time, do we agree with taxation, which is the taking of money by the state to spend at it sees fit? That is done coercively - if you don't pay tax, you go to prison.

But anyway, my main point is that wealth inequality will happen and get more unequal over time, without coercion. And the reason that happens is the inheritance laws (though laws could be regarded as coercive - if you try to use the capital that a dead person has left, the state will coerce you into doing that, and use the state-instituted laws to imprison you for trying to do that).

He inherited it, which assumed I implied when I mention how his farther got wealthy. As I have indicated more than once I have no problem with inheritance
Whether or not you or I have a problem with inheritance is not the issue. I am simply asking one question - how is it that there is such a huge difference in the distribution of wealth? I am giving the basic answer to the question of why inequality increases over time - it's the inheritance laws which the state imposes, ensuring that wealth continues to be held in certain families.

Now if some very radical person wants to deny rights of inheritance for wealth acquired helping the state go to war or even repudiating similar wealth transfers, I am all for it.
Why mention going to war? Let's not have any war. I am simply saying why wealth inequality increases over time. We can leave the question of what should be done about it for later.

Middle class wages have been stagnant or falling since inflation began to heat up badly in 1964 (especially after Nixon’s currency reform in 1971 – complete with price controls that were admittedly milder than Diocletian’s.
Without the statistics I don't know if what you say there is true, but I doubt if it is.
 
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91
Pale Blue Dot - Moonshine Quadrant
#58
Do we agree that the level of inequality is something to be concerned about?

Of more concern is the imbalance of capital holdings ie millions of people having almost no capital, some having a chunk of capital but has nearly as much of debt, and a small percentage having most of the capital. By capital let's focus on company ownership, which comes down to equity (shares in companies). As shareholders, those are the people with, not only the wealth, but the power. It is that type of inequality that is of real concern.
Absolutely the degree of wealth inequality now and repeatedly in the past is something to be concerned about. I think the question for both of us is why does it occur in such extremes and why is it more extreme in some historical periods than in others?

It is my position that it becomes more extreme to the extent that it is magnified by the application of force – be it by explicit military conquest, person-to-person robbery, laws and traditions that assured female and minority poverty and dependence, some of the less defensible historical practices of the Church, or the use of “legal” coercion enabled by capture of the of the political state.

Even the idea of ownership via shares in a company (of which the truly poor cannot even afford to involve themselves despite the legal freedom to do so) has become an increasingly untrustworthy form of ownership even for the middle class due to the usually unexplained but very real boom-bust economic cycle. The bust phase of that process destroys wealth radically by damaging or even wiping out capital wealth that has often been non-coercively acquired.

I also question the actual level of power shareholder wealth typically gives because the shares, like democratic votes in an expansive political system, are usually too diluted. There are exceptions of course where shares are closely held and in some cases hostile takeovers with leveraged money can concentrate shares that were once heavily diluted

The owner is DEAD. He cannot do anything, he can't dispose and can't see fit. So a decision has to be made by the living as to what to do with the capital he left. Who is to decide how to do that?
In my view if the own made plans to death to dispose of his/her wealth either to heirs, charity, or research foundations those plans are a legally binding contract after death. In the absence of those plans it becomes a state affair.

I had asked the question to get a handle on what you mean by coercion. We agree (basically) that coercion should not be used, though, at the same time, do we agree with taxation, which is the taking of money by the state to spend at it sees fit? That is done coercively - if you don't pay tax, you go to prison.
As you say taxation is coercive and it too represents a wealth transfer from one group to another. In a well-ordered state truly focused on the general welfare (excluding stateless anarchism) it can be non- controversial. But there are real limits to what is subsumed by the concept of general welfare.

Once taxation gets used to attempt social engineering (like rewarding families and the creation of children, subsidizing railroads or even solar power, to fund acquisition of foreign natural resources like mineral wealth on lands left to Native American or Middle Eastern oil) it becomes manipulative, appropriative, and usually controversial. In such conditions the “social contract” begins to be violated – which naturally leads to social reaction.

But anyway, my main point is that wealth inequality will happen and get more unequal over time, without coercion. And the reason that happens is the inheritance laws (though laws could be regarded as coercive - if you try to use the capital that a dead person has left, the state will coerce you into doing that, and use the state-instituted laws to imprison you for trying to do that).
I do not agree that extreme wealth inequality like we have seen for thousands of years builds naturally to a predatory degree of its own momentum. Unfortunately for your claim coercion has always accompanied the extreme wealth distributions that concern us both and thus there is no empirical evidence where mal-distribution can be separated from coercion.

On the other hand, there have been periods of successful economic growth for all levels of society – not just the wealthy - when coercion was at a relative minimum.

Examples:

Some periods in China - the early stages of the Western Han Dynasty for example and Confucian thought throughout Chinese history has often opposed extensive economic government controls.

The Dutch Golden Age when it became the world's largest commercial enterprise of the 17th century after the Bank of Amsterdam, established 1609, maintained at all times the very rare policy of 100-percent reserve ratio with respect to “demand” deposits – that is honest banking without manipulative expansions of credit for preferred customers. The Bank of Amsterdam’s reputation was so high among scholars and intellectuals, as well as merchants, of the day that the bank was discussed by David Hume in his essay Of Money in 1752.

Robert Walpole and the Duke of Newcastle initiated a policy of salutary neglect toward the North American colonies in the 18th century that probably spoiled the Americans and gave them an over optimist view of what English Mercantilism was really about. Salutary neglect ended after the Seven Years War and the royal government in England needed money, leading to the American Revolution when economic coercion returned.

The United States from around 1800 to the Civil War - although the war with England in 1812 was a fly in the ointment, as were the monetary policies of the Second National Bank that triggered the depressions of 1819 and 1837.

Each of these cases of relatively balanced economic growth ended with a return to a policy of state intervention where the ruling class through predatory coercion, have always in the end killed the goose that laid gold eggs of private, voluntary economic growth. This been a common theme in liberal understanding of the political appropriation of wealth.

The Frenchman Adolphe Blanqui, in what is probably the first history of economic thought Histoire de l'Economie Politique en Europe depuis les anciens jusqu'à nos jours, published in 1837 when young Marx was just getting involved the Young Hegelians, anticipated Marx’s class analysis when he wrote:

In all the revolutions, there have always been but two parties opposing each other; that of the people who wish to live by their own labor, and that of those who would live by the labor of others…. Patricians and plebeians, slaves and freemen, guelphs and ghibellines, red roses and white roses, cavaliers and roundheads, liberals and serviles, are only varieties of the same species…So, in one country, it is through taxes that the fruit of the laborer's toil is wrested from him, under pretense of the good of the state…The same abuse is reproduced under more indirect, but no less oppressive, forms, when, by means of custom-duties, the state shares with the privileged industries the benefits of the taxes imposed on all those who are not privileged.

Marx and Engels saw economic class at the source of all social distortions, were aware of the existence of this earlier notion of class analysis. In a letter written in 1852 to his follower, Joseph Weydemeyer, the first exponent of Marxism in the United States, Marx asserted:

…no credit is due to me for discovering the existence of classes in modern society or the struggle between them. Long before me bourgeois historians had described the historical development of this class struggle and bourgeois economists the economic anatomy of the classes.

In the Communist Manifesto Marx openly accepted the assertion of Blanqui.

Political power, properly so called, is merely the organised power of one class for oppressing another.

Polybius, the Greek historian of the Roman Republic also noted the relationship some 2,000 years earlier:

So when they [the rich] begin to be fond of office, and find themselves unable to obtain it by their own unassisted efforts and their own merits, they ruin their estates, while enticing and corrupting the common people in every possible way. By which means when, in their senseless mania for reputation, they have made the populace ready and greedy to receive bribes, the virtue of democracy is destroyed, and it is transformed into a government of violence and the strong hand.

So, this idea I have been pushing has a long backing of economic and social analysis – by the free market folks, Marx and Engels, and ancient historians.

Nor do I agree that inheritance laws that do not restrain what an owner can do with his/her wealth are coercive. Earlier primogeniture laws that controlled such things were coercive certainly, but today the only obvious coercion that appears in inheritance taxes is the disorganization of civilization-enabling capital.
 
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91
Pale Blue Dot - Moonshine Quadrant
#59
I am simply asking one question - how is it that there is such a huge difference in the distribution of wealth? I am giving the basic answer to the question of why inequality increases over time - it's the inheritance laws which the state imposes, ensuring that wealth continues to be held in certain families.
My assertion is that coercion (not the presence of wealth itself) is the answer to your question. Since ancient times, the wealthy have used the power of coercion (especially the state) to further their interests.

Think about it. If the wealthy seek to always increase their wealth (on which I think we agree), then why would they not use the state’s monopoly on coercion to further their own monopolist desires? It would be an especially inept monopolist that did not recognize the advantage of capturing the political process. State control over the economy is the bait that attracts the sharks. And it is lucrative bait – one that disguises theft under a fig leaf of legality.

American history is particularly illuminating in this respect. Outside the Slavocracy of the South, who maintained themselves via coercion of slaves, there was no aristocratic, wealthy class that was permanently entrenched. With the Declaration of Independence and again at the time of the American Constitution, compromise with that slave-based coercion was undertaken. That deadly compromise reaped in 1860 what had been sowed in 1776 and 1787. Thus, a massive increase in federal state power became necessary to challenge the Southern states’ coercive grip on blacks and thus end slavery.

But there are no single issue events in history and the Republican Party of that day, with the wind of its moral superiority over slavery at its back, adopted a corporatist economic policy not unlike what it often seeks today. In less than a generation after the end of the Civil War the 1890 the United States census showed that 9 % of the population controlled 71 % of the wealth, and by 1900, about three quarters of the American people qualified as poor.

This was also a period of high immigration that held down wages and radically expanded the poor sections of America cities so the re-institution of Mercantilism in the U.S. was not the only factor – but it impact was a major effect. Populism on the Midwest plains and Progressive political turmoil came in its wake for entirely understandable reasons.

Statistics are hard to come and sometimes of questionable reliability by for earlier periods but Alexis de Tocqueville in his celebrated 1835 Democracy in America noted that:

Among the novel objects that attracted my attention during my stay in the United States, nothing struck me more forcibly than the general equality of condition among the people.

Certainly there was little political turmoil in the first half of the 19th century in the U.S. outside slavery, the currency implications of state involvement in banking, and some tariff controversy – all directed at the state and not wealth per se; that came only with Marx.

So about a century after the American Revolution exerted a tremendous leveling of wealth and status that English rule had established – and they did admittedly coerce the Tories loyal to England – American society was scandalously top heavy. A large measure of that process came with the Civil War and its Republican Party aftermath; and that process encompassed the whole nation east, west, north, and not just the war ravaged south that had seen its morally indefensible economic and social structure overturned.

Why mention going to war? Let's not have any war. I am simply saying why wealth inequality increases over time. We can leave the question of what should be done about it for later.
Unfortunately war is a primary cause of how the wealth collects at the top - ancient and modern. The U.S. has had a permanent war economy since the 1930's and it shows in the wealth distribution.

My point was that daddy Trump made much of his wealth building houses for military personnel. If war is coercive, then, in some minds, so is the preparation for war. This is particularly true in the U.S. which has built an obscenely large military machine despite never in its history having had a threatening neighbor and when direct attacks occurred on its homeland (in say 1941 and 2011) were related to its foreign policy aggressions overseas that sought to control foreign markets (the property of others).

So my hypothetical very radical person might want to deny Trump’s inheritance because in that person view his father’s wealth would have been acquired via state coercion – a more abstract and remote form of the Merchants of Death investigation by the U.S. Congress after the debacle of World War I.

Without the statistics I don't know if what you say there is true, but I doubt if it is.
Here are some charts and articles to consider:

Home Ownership (US)
Homeownership Rate for the United States

This a U.K article – I cannot comment on its validity
Home ownership in England at a 30-year low, official figures show

Labor force participation rate
USA - Civilian labor force participation rate 1990-2018 | Statista

Personal debt
Household Debt Is Enslaving Americans
The Center for Microeconomic Data - FEDERAL RESERVE BANK of NEW YORK

Public debt
Federal Debt: Total Public Debt

Student debt – especially significant since students’ legal inability to escape debt threatens a return to indentured servitude. A couple of court decisions have recently weakened student debt chains however
Student Loans Owned and Securitized, Outstanding

A discussion from Public Broadcasting Service (PBS) on wages, jobs, debt, and net worth.
The State of America's Middle Class in Eight Charts
 
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2,354
#60
It is my position that it becomes more extreme to the extent that it is magnified by the application of force – be it by explicit military conquest, person-to-person robbery, laws and traditions that assured female and minority poverty and dependence, some of the less defensible historical practices of the Church, or the use of “legal” coercion enabled by capture of the of the political state.
You have given examples of coercions/enforcements in the past that would transferred wealth from certain individuals to more powerful individuals. But these examples are "one-offs" which, while certainly transferring capital to the wealthier people, don't explain how the inequalities that they caused are carried on, increasingly, over generations.

Even the idea of ownership via shares in a company (of which the truly poor cannot even afford to involve themselves despite the legal freedom to do so) has become an increasingly untrustworthy form of ownership even for the middle class due to the usually unexplained but very real boom-bust economic cycle. The bust phase of that process destroys wealth radically by damaging or even wiping out capital wealth that has often been non-coercively acquired.

I also question the actual level of power shareholder wealth typically gives because the shares, like democratic votes in an expansive political system, are usually too diluted. There are exceptions of course where shares are closely held and in some cases hostile takeovers with leveraged money can concentrate shares that were once heavily diluted
I agree with most of that, except that I think, if share ownership was really widespread, such that just about everyone received dividends, there would be real "democratic" pressure to control what big companies do.

In my view if the own made plans to death to dispose of his/her wealth either to heirs, charity, or research foundations those plans are a legally binding contract after death. In the absence of those plans it becomes a state affair.
I must emphasise that it is INEVITABLY a state affair, because, unless we say that the capital left by the late owner just gets taken by whoever happens to arrive there and seize it, the community must get involved in the form of THE STATE which makes INHERITANCE LAWS eg primogeniture which govern how property of the dead is to be disposed of. Of course the common consent is that the wishes of the owner, as expressed in a written document, should be paramount, which in practice means that the close relatives get the property. I am only saying, at this stage, that this is a major cause for wealth inequality ie the inheritors, though they may have done little or no work to create the capital, do in fact receive a large part of it.

I do not agree that extreme wealth inequality like we have seen for thousands of years builds naturally to a predatory degree of its own momentum. Unfortunately for your claim coercion has always accompanied the extreme wealth distributions that concern us both and thus there is no empirical evidence where mal-distribution can be separated from coercion.
I certainly need some statistics to back up my claim. I suppose that in England since 1066, I might be able demonstrate that there are still wealthy estates that have been retained for centuries. For the present I am relying on what I consider to be logic; even if there was no kind of coercion, what would prevent wealthy families from accumulating their wealth for generations?

On the other hand, there have been periods of successful economic growth for all levels of society – not just the wealthy - when coercion was at a relative minimum.
In the examples that you given, I would need some firm statistics to show that prosperity really did increase, and not just for a certain class of people.
 

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