This is the first of a multipart series on wealth inequality.
In the wake of the Black Death good help was hard to find. The plague had wiped out anywhere from a third to half of the population, decimating the serfdom so thoroughly that demand for labor soared. The survivors expected higher wages from a desperate aristocracy, and Europe’s wealthiest families had no choice; they could only watch their treasuries dwindle even as incomes among the lower classes doubled and even tripled. By 1349, this situation had become so dire that “prelates, earls, barons, and other great men” took their grievance to King Edward III. The crown responded by issuing a royal decree freezing wages at a lower price, but to no avail; instead of accepting lower wages, workers simply migrated between estates and sold their labor to the highest bidder. Thus in 1351 the king’s council complained:
…said servants…do withdraw themselves to serve great men and other, unless they have livery and wages to the double or treble of that they were wont to take the said twentieth year, and before, to the great damage of great men…
No amount of royal intervention could save those great men from the market’s reckoning. Wages rose, and their coffees emptied. Revenues from the shrunken tax base dropped, and their coffers emptied. And as fields went unplowed, their coffers emptied. In the century after the plague, the riches of Europe’s richest 10% sank to less than half the continent’s total wealth. Economic inequality fell to the lowest level it would ever reach after the fall of the Roman Empire.
But then, something remarkable happened: the rich began to seize control of land. Starting in the late 14th century, fields and forest that had once belonged only to the commons, and where the peasantry had survived by farming tiny plots of land and tending cattle, were slowly but surely taken over. At first the rich simply took these lands by brute force, but over time their conquests – what would eventually be called the enclosures – gained the color of law. Written accounts start to emerge in the sixteenth century, such as this by London’s Robert Crowley:
Cormorants, greedy gulls; yea, men that would eat up men, women, & children…They take our houses over our heads, they buy our lands out of our hands, they raise our rents, they levy great (yea unreasonable) fines, they enclose our commons! No custom, no law or statute can keep them from oppressing us in such sort, that we know not which way to turn so as to live.
Raphael Holinshed, meanwhile, observed the spread of enclosures throughout Europe:
Certainly this misfortune hath not only happened unto our isle and nation, but unto most of the famous countries heretofore, and all by the greedy desire of such as would live alone and only for themselves.
In this way, land once held in common became the exclusive property of the rich, to do with as they pleased. At the same time, the peasantry, evicted from their homes and their fields, found themselves desperate for work and at the mercy of anyone who would employ them.
Thus began capitalism: with the mass privatization of land in one of the most economically equal societies in history. Financial recordkeeping from that time was sporadic at best, so it is difficult to talk about the first centuries of capitalism with absolute certainty; but drawing primarily from pre-Italian tax records, Guido Alfani has developed a series tracking the wealth of Europe’s top 10% percent. And the trend is clear: from the beginning of capitalism to the turn of the twentieth century, the rich got richer, and richer, and richer. By the eighteenth century the top decile would capture 65% of the continent’s wealth; by the twentieth century, that number hit an astonishing 90%.
In the first half of the twentieth century, the wealth share of the top decile plummeted all the way down to 60% of the total wealth; we will discuss the reasons for this shortly, but for now it is enough to observe that the drop was short-lived. By mid-century wealth began to concentrate once again all over the world, and today the top 10% controls 65% of the world’s riches – 15% more than they held when capitalism began.
That figure – 15% – poses one of the most important political and economic questions facing us today. Does it signal some fundamental process through which capitalism slowly but surely concentrates wealth in fewer and fewer hands? Or does the brief leveling of inequality at the beginning of the twentieth century prove otherwise? Or to ask the question differently: was Karl Marx right?