by Guido Alfani (Bocconi University, Milan, Dondena Centre and IGIER)
Recent research in economic history has unearthed previously unknown facts about the long-term trends in inequality. We now have, for at least some areas of Europe, continuous time series of key inequality indicators from around 1300.
These new data are changing the way in which we perceive economic inequality not only in the past, but even today – as a key lesson from history is that economic inequality (especially but not only of wealth) has a marked tendency for increasing over time, and only catastrophes on the scale of the Black Death or the World Wars managed to bring it down, albeit temporarily (see Figure 1).
The new historical evidence is also relevant to the debate about the long-term determinants of inequality growth. This seems to be independent, to a large degree at least, from economic growth. Other factors seem to have played a crucial role, including institutional factors and in particular (in the early modern period) the rise of the fiscal-military state.
These recent acquisitions, however, raise many questions about the actual impact on society of distributive dynamics. My current project funded by the European Research Council – SMITE: Social Mobility and Inequality across Italy and Europe 1300-1800 – is exploring at least some key aspects of the social impact and significance of inequality change.
In this context, particular attention is being paid to the case of the Republic of Venice, which is the object of the study to be presented at the Economic History Society’s 2019 annual conference. In the Republic of Venice, as seemingly was common throughout Europe, economic inequality tended to grow monotonically from the fifteenth century until the end of the early modern period (which is also the end of the Republic of Venice as a specific political entity).
Generally speaking, this inequality growth could not simply be considered the consequence of economic growth, as it also covered phases of economic stagnation. Indeed, the Italian domains of the Republic of Venice transitioned, over the period 1500-1900, from being one of the richest and most advanced areas of Western Europe, to being one of the poorest. Partly as a consequence of this, it is very unlikely that during the period, and especially from 1600 on, inequality growth could have taken place in a context of easy upward social mobility.
Our research aims to measure rates of socio-economic mobility in different periods, based on a range of case studies, including the large and very important city of Verona. Our results so far confirm that during the early modern period inequality growth came to be increasingly associated with more difficult upward socio-economic mobility.
This provides useful hints about the nature and the causes of inequality growth in pre-industrial Europe. We pay particular attention to the role played by state taxation in consolidating the relative position of the richest, while compromising the ambitions of upward mobility of other socio-economic groups. Our study is also one of the very first attempts at reconstructing household-level measures of social mobility for the pre-industrial period by means of extensive record linkage of the available sources and by using the standard methods of mobility studies.
The picture that we reconstruct suggests that from around 1600 or 1650, the Italian domains of the Republic of Venice were characterised at the same time by economic stagnation, growth in economic inequality, and low (and worsening) rates of social-economic mobility. This picture corresponds quite closely to the situation being faced by Italy and by other parts of southern Europe since the onset of the Great Recession in 2008 – which is definitely not a very encouraging scenario.
Source: Alfani, The top rich in Europe in the long run of history, Vox 15 January 2017