Skip to comments.Income inequality in the Roman Empire
Posted on 12/22/2011 5:46:00 AM PST by 1010RD
Over the last 30 years, wealth in the United States has been steadily concentrating in the upper economic echelons. Whereas the top 1 percent used to control a little over 30 percent of the wealth, they now control 40 percent. Its a trend that was for decades brushed under the rug but is now on the tops of minds and at the tips of tongues.
Since too much inequality can foment revolt and instability, the CIA regularly updates statistics on income distribution for countries around the world, including the U.S. Between 1997 and 2007, inequality in the U.S. grew by almost 10 percent, making it more unequal than Russia, infamous for its powerful oligarchs. The U.S. is not faring well historically, either. Even the Roman Empire, a society built on conquest and slave labor, had a more equitable income distribution.
To determine the size of the Roman economy and the distribution of income, historians Walter Schiedel and Steven Friesen pored over papyri ledgers, previous scholarly estimates, imperial edicts, and Biblical passages. Their target was the state of the economy when the empire was at its population zenith, around 150 C.E. Schiedel and Friesen estimate that the top 1 percent of Roman society controlled 16 percent of the wealth, less than half of what Americas top 1 percent control.
To arrive at that number, they broke down Roman society into its established and implicit classes. Deriving income for the majority of plebeians required estimating the amount of wheat they might have consumed. From there, they could backtrack to daily wages based on wheat costs (most plebs did not have much, if any, discretionary income). Next they estimated the incomes of the respectable and middling sectors by multiplying the wages of the bottom class by a coefficient derived from a review of the literature. The few respectable and middling Romans enjoyed comfortable, but not lavish, lifestyles.
Above the plebs were perched the elite Roman orders. These well-defined classes played important roles in politics and commerce. The ruling patricians sat at the top, though their numbers were likely too few to consider. Below them were the senators. Their numbers are well knownthere were 600 in 150 C.E.but estimating their wealth was difficult. Like most politicians today, they were wealthyto become a senator, a man had to be worth at least 1 million sesterces (a Roman coin, abbreviated HS). In reality, most possessed even greater fortunes. Schiedel and Friesen estimate the average senator was worth over HS5 million and drew annual incomes of more than HS300,000.
After the senators came the equestrians. Originally the Roman armys cavalry, they evolved into a commercial class after senators were banned from business deals in 218 B.C. An equestrians holdings were worth on average about HS600,000, and he earned an average of HS40,000 per year. The decuriones, or city councilmen, occupied the step below the equestrians. They earning about HS9,000 per year and held assets of around HS150,000. Other miscellaneous wealthy people drew incomes and held fortunes of about the same amount as the decuriones.
In total, Schiedel and Friesen figure the elite orders and other wealthy made up about 1.5 percent of the 70 million inhabitants the empire claimed at its peak. Together, they controlled around 20 percent of the wealth.
These numbers paint a picture of two Romes, one of respectable, if not fabulous, wealth and the other of meager wages, enough to survive day-to-day but not enough to prosper. The wealthy were also largely concentrated in the cities. Its not unlike the U.S. today. Indeed, based on a widely used measure of income inequality, the Gini coefficient, imperial Rome was slightly more equal than the U.S.
The CIA, World Bank, and other institutions track the Gini coefficients of modern nations. Its a unitless number, which can make it somewhat tricky to understand. I find visualizing it helps. Take a look at the following graph.
Gini coefficient of inequality
To calculate the Gini coefficient, you divide the orange area (A) by the sum of the orange and blue areas (A + B). The more unequal the income distribution, the larger the orange area. The Gini coefficient scales from 0 to 1, where 0 means each portion of the population gathers an equal amount of income and 1 means a single person collects everything. Schiedel and Friesen calculated a Gini coefficient of 0.420.44 for Rome. By comparison, the Gini coefficient in the U.S. in 2007 was 0.45.
Schiedel and Friesen arent passing judgement on the ancient Romans, nor are they on modern day Americans. Theirs is an academic study, one used to further scholarship on one of the great ancient civilizations. But buried at the end, they make a point thats difficult to parse, yet provocative. They point out that the majority of extant Roman ruins resulted from the economic activities of the top 10 percent. Yet the disproportionate visibility of this fortunate decile must not let us forget the vast butto usinconspicuous majority that failed even to begin to share in the moderate amount of economic growth associated with large-scale formation in the ancient Mediterranean and its hinterlands.
In other words, what we see as the glory of Rome is really just the rubble of the rich, built on the backs of poor farmers and laborers, traces of whom have all but vanished. Its as though Romes 99 percent never existed. Which makes me wonder, what will future civilizations think of us?
Scheidel, W., & Friesen, S. (2010). The Size of the Economy and the Distribution of Income in the Roman Empire Journal of Roman Studies, 99 DOI: 10.3815/007543509789745223
How much total wealth does the society have? Are the lower 10% in the current US better off than the upper 10% of Rome?
Right. Imagine a society made up of grasshoppers and ants. The ants invest and work hard and the grasshoppers don’t. When bad times show up who’s more likely to be without or to see their income plummet?
The trouble with measuring this way is that during a debt deflation you have very high and pervasive job loss. That drags down the bottom earners and overinflates the top earners. Who’s more likely to be out of a job - a janitor or a brain surgeon?
Worse, income isn’t a measure of wealth or even happiness. Marx was trapped in 18th century aristocratic Britain. The world moved, but the Marxists keep trying to fit their formula despite reality.
IF this is indeed true, think about it this way. When the Federal Reserve generates seven trillion in "temporary overnight near-zero interest 'loans,'" 65% to 6 banks, who were the beneficiaries? Was it you? It certainly wasn't me. When the Treasury buys $700 Billion in "bad assets" from banks, who is the beneficiary?
Suppose you were allowed to take all your money an put it in the stock market. Anything that lost, the government bought back at its original price. Anything that went up you get to sell and keep. How would you do with such government guaranteed success compared to the random Joe with his 401K?
One of the phenomena of Rome was the increasing concentration of land in Italy in the hands of the patricians as the government continually increased debt beyond reasonable levels. So Rome continually debased its currency.
I really fail to see what is so different. it was the same in many Greek city states as well, where those who got marginalized out left and formed colonies elsewhere in the Mediterranean world.
"There is nothing new under the sun." Even democracy and it's corruption. I have hope that sooner or later the electorate won't tolerate it any more and make changes.
P.S. I have no issue with folks who work hard making all the money they can honestly providing goods and services, inventing stuff, founding companies and so on. But the Gates and the Wozniaks and Jobs's are not the rule in this story. A large fraction of folks are just ripping off the country with the assistance of the federal government and the FED. The Fannies and Freddies should have gone bankrupt. So should AIG, and a lot of other banks. Or, if you have no taste for wholesale bankruptcy, when the government bails them out put them on federal salaries without bonuses. After all, why should someone who damn near tanked the economy of the whole world (and it isn't over yet by any means) get a multi-million dollar bonus.
That depends, do you benefit from a functioning banking system?
When the Treasury buys $700 Billion in "bad assets" from banks, who is the beneficiary?
The Treasury never did that.
Suppose you were allowed to take all your money an put it in the stock market. Anything that lost, the government bought back at its original price.
When did that happen?
You’re onto something.
It’s not because the very wealthy have monopolized more of the wealth it’s because 50% of the population is non-productive and is sucking resources out of us.
What civilization can survive with half of its citizens sitting around demanding money from the other half.
the real question to be asked is. So what? The distribution of wealth or products and services tells us nothing of the prosperity of a society or the standard of living. Could it be that a prosperous society with a higher standard of living could also have an unequal distribution of wealth? What good is equality when all are peasants and starving?
Exactly correct. Income doesn’t measure happiness or wealth.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.