Rethinking Early Modern Inequality
Two promising but difficult paths are leading towards a new appreciation of the rise of global inequality in living standards from the early sixteenth through the early nineteenth centuries.
One path explores the great global divergence in the average living standards of countries and continents, while the other explores economic inequality within societies. Global divergence between countries appears to have emerged within Europe in this era, and much of western Europe began to pull ahead of Asia in the late eighteenth and early nineteenth centuries. Inequality within the nations of Europe may also have been rising (van Zanden 1995; Pomeranz 2000; Allen 2001).Neither path is easy to clear in a pre-statistical era, but both are leading towards a new history of inequality. In this new history, the highly unequal world of the early nineteenth century was neither inherited from an ancient feudal order nor created by the Industrial Revolution. Rather, both paths are leading us towards the suspicion that humans were not yet as starkly unequal when Vasco de Gama and Columbus set sail as their descendants were to become in the early nineteenth century.
A concept of real, as opposed to nominal or conventional, inequality in human living standards will help us make progress along both paths. Using such a concept suggests that on balance, the long era from about 1500 to the 1820s was indeed an era of rising global inequality, like the era since the 1820s.2 To clear the way for this suggestion, a first step is to overhaul the conventional measurements of the gaps between nations' average real incomes.
Measures of early income inequality between nations may have been particularly distorted by the working-class bias in our comparative studies. Driven by social concerns and a partial data base, we have concentrated too much on comparing the abilities of ordinary workers to buy ordinary food.
This leads to an anomaly: in the very era where we suspect that western Europe is starting to pull ahead of eastern Europe and Asia, our only measures—those conventional food-wage measures—imply that western Europe was actually declining, except in Amsterdam and southern England for certain periods. If so, it must have been the rise of western Europe's middle and upper classes that pulled the region's product per capita far ahead of the rest of the world before the 1820s.As this conjecture implies, inequality within the nations of western Europe has risen greatly. In fact, the real gaps have widened even more greatly than the widening of nominal income gaps can reveal. The magnified swings in real inequality were caused by the interaction of population growth with concentrated land ownership and Engel's law. Concentrated land ownership and Engel's law together meant that the poor and the rich depended greatly on each other's factor services. Population
growth, by supplying more labour, tipped the terms of inter-class trade against workers, who needed more landintensive food. This combination was broken up by the French Revolution and by globalization in the nineteenth century.
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