Around 100 BC, a Roman nobleman calculated that it took about 100,000 sesterces a year to live comfortably. That was roughly 200 times the amount of money a poor city dweller needed to eke out a living. If an American needed the same multiple of the subsistence income to join the upper middle class today, the threshold would be $3.5 million. The United States economy has become less equal lately, but it remains much more egalitarian than the ancient Roman Republic.
The modern news on economic inequality is much more good than bad. The good news is very good. The greatest moral problem caused by inequality – the unequal access to the most basic economic goods, those which support life – has become less severe. The portion of the total population that suffers from this bottom-inequality is probably the lowest ever in history.
True, we do not know how many ancient Romans were on the wrong side of the bottom-inequality, but statistics for the most recent decades are encouraging. In 1970, 26 percent of the world’s population suffered from hunger, according to the UN’s Food and Agriculture Organisation. The proportion is now 13 percent – still scandalously high, but the gain in food-equality is clear. Nor is food an isolated example. Electricity is a relative new development, but the Soviet dream of universal electrification has already nearly become a reality; more than 80 percent of the world’s population can plug in, according to the International Energy Agency. Health care and sanitary living conditions are now considered basic goods – and access to them has become more equal. The average life expectancy at birth is 65 or above in countries accounting for roughly 80 percent of the world’s population.
The bad news is on the other end of the income spectrum. There has been an increase in top-inequality – a widening gap between the elite and the rest – in the United States, the UK and a few other countries. The bottom 90 percent in the United States are not exactly suffering; they have been getting richer on average for the last few decades. But the rich, especially the very rich, have been getting richer much faster. The top 10 percent of earners took in 32 percent of the nation’s total income three decades ago. That has risen to 46 percent. The share taken by the top 1 percent has more than doubled, from 8 to 18 percent, according to the World Top Incomes Database. In the UK, the newly published report from the High Pay Commission points out that the top 0.1 percent’s portion has multiplied from 1.3 to 6.5 percent.
The increase in top-inequality is bad in principle. People are not different enough in their abilities or in their dedication to work to justify the recent increases in the gap between rich and relatively poor. The damage can be seen in practice. The commission makes a good case that top-inequality reduces social solidarity, making companies less efficient and slowing GDP growth. It also points out, along with the book The Spirit Level, that greater top-inequality is associated with societies which have more health and behavior problems.