(Per Molander, the internationally known specialist on distribution issues, confronts Gero Jenner. Mephisto stayed away unexcused. All Molander quotes are in italics).
GJ: Dear Mr. Molander. You have made a name for yourself studying human inequality and are particularly qualified for the topic because, as a Swede, you grew up in a state that – seen globally – is still considered a model in terms of material justice. In addition, you are equally at home in several foreign idioms, such as German, as you are in your own native language.
PM: You are right, Sweden ranks high on the Gini scale, material equality is a fundamental concern of our society. In countries with relatively high ambitions for redistribution, such as Australia, Canada, Finland, and Sweden, more than half of the market-driven increase in income disparity has been offset by their tax and transfer systems. This policy reduces social tensions because interpersonal envy plays a minor role. A consistent observation is that trust and equality have a strong correlation: the more equal a society is, the more trust the people in that society feel toward each other.
The positive effects of such policies can be empirically verified. In states with high trust, the schools function better, however the results are measured. In states with high trust, children and youths fare better, measured in infant mortality, teen pregnancy, and other health variables. In states with high trust, the rate of violent crime is lower. In states with a strong sense of solidarity, people are generally healthier. States with high trust have lower levels of tax evasion, as estimated by the American Internal Revenue Service.
GJ: Trust is the social glue binding people together.
PM: It is even more than that. A policy of material equality also pays off economically. It makes an economy more dynamic. We can prove empirically that societies grow faster when their initial state is as close as possible to the egalitarian state, because equality of opportunity is conducive to growth.
GJ: If trust and economic dynamism are among the values that every politician should strive for, it becomes difficult to explain why inequality has been on the rise in Western countries since the 1970s and is now as high again as it was before World War II?
PM: You see, mathematically, equality is a most unlikely condition. Let’s put two individuals with equal mental and physical endowments on an island where each builds an existence with the resources at hand. They will probably trade with each other so that each of them will not have to perform the same work. What will happen? After some time, you will notice that one of them had more luck than the other – and immediately inequality develops. Chance determines who, in practice, gets the upper hand in a situation where effort and talent are identical. Research has shown that more than 80 percent of a person’s real income will depend on circumstances beyond her control: country of birth and family background. These effects beyond our control quickly lead to some becoming increasingly richer and others poorer.
GJ: But that’s not true of all societies. Where everyone has just enough to survive, virtual equality prevails – you may say these societies are doomed to equality. In a hunter-gatherer society, where everyone is more or less living at the subsistence level, there simply is no room for inequality, because resources have to be shared equally to ensure that everyone will survive. It is only when there is a surplus that inequality between individuals can develop. As soon as societies become richer, equality belongs to the past. In other words, poverty makes equal, wealth multiplies differences.
PM: That’s the way it is. In that sense, you may say that wealth makes you unhappy, because it breeds envy and destroys trust. Since, from a historical perspective, societies have never been as prosperous as they are in our time, this trend de facto amounts to modern societies being more prone to envy and loss of trust than most societies of the past. Such a development leads to social unrest and instability. If a few people become richer while the majority become relatively poorer, such a development will eventually lead to social tensions if the state does not intervene. For the sake of social peace, government feels compelled to restrict excessive wealth as well as oppressive poverty.
GJ: You just said that an egalitarian society provides the best conditions for growth. But since growth means an increase in wealth, it automatically results in greater inequality. Accordingly, it is egalitarian society itself that is in danger of destroying the state of equality by its very success, because of its particular potential for growth.
PM: That’s right, but in order to prevent this from happening, a welfare state must intervene to correct the situation. He supports this effort by creating an education system that offers all citizens the opportunity for advancement. The state is not the only actor in the service of social justice; private interest groups such as trade unions are important participants. It is thanks to both actors that a high degree of material equality still prevails in Scandinavian countries today.
GJ: Mr. Molander, then we would actually have created the ideal state – a perpetual motion machine! The egalitarian society creates maximum trust and growth potential, while the state intervenes to ensure that growth does not lead to greater inequality and thus to lower growth. If this is indeed the ideal, how do you explain the disturbing fact that social justice plays an increasingly minor role in public debate? Workers’ newspapers have gone out of business one after the other, and trade unions everywhere are in retreat – even though inequality has again been on the rise for half a century. If social trust and economic growth are so vitally important, why do so many people no longer care about the issue? How is it that people vote for right-wing parties and listen to populist theses that praise nationalism and xenophobia, while left-wing demands for more social equality go on unheeded?
PM: You see, Mr. Jenner, for most ruling elites throughout history, whether democratically elected or not, staying in power is their primary goal, and public interest has at best been a means to this end. But it is true that it is only since about the 1980s that elites have increasingly succeeded in overriding the public interest. In 1965, the average American CEO in a larger company earned 24 times as much as the average worker. In 2005, this number had risen to 262. In Sweden, this quotient has been measured since 1950, when it was 26. In 1980, it was at its lowest (9), only to rise to 46 in 2011. How could this happen? First, there are the large international corporations, whose neoliberal course has put pressure on individual states and the trade unions. In addition, many once well-paid jobs were outsourced to Asia, jobs that until then had offered well-paid jobs even to people without special training in our own countries. In the meantime, digitalization is cutting an even greater swathe – in other words, globalization and technological progress continue to destroy jobs. This has inevitably increased the gap between rich and poor. Outsourcing and globalization started in the 1980s; the impact of digitization was felt somewhat later.
GJ: In your book, you emphasize the fact that Europe’s societies achieved maximum social equality in the three postwar decades, that is, until the 1970s.
PM: Yes, the notable exception to the general pattern of rising inequality, which is practically unique in size and scope, is the leveling-out of wealth in the twentieth century following unionization, democratization, and the growth of the welfare state.
GJ: But you don’t explain why this miracle occurred just after World War II.
PM: Aren’t the reasons quite obvious? You know that at that time – and in all Western countries, i.e. in Germany as well as in the United States or in Japan – trade unions had as much influence as never before and never since. Yes, and the state intervened everywhere with a strong hand to help the disadvantaged. By contrast, globalization has increased the room for maneuver of capital. Capital can be moved with a phone call or a keystroke, but the process of mobilizing unions and homogenizing laws across national borders and between continents is a time-consuming and complicated process.
GJ: True, but why was it that the state could afford to intervene in that way at that particular time, and why was it that unions were so strong in those three decades, while in comparison both seem almost helpless today? That’s a question we have to ask ourselves.
PM: You see, the West had to compete with a powerful enemy at that time: communism. Not that in those countries conditions were really any better. In fact, the risk for a concentration of power is higher in a communist economy than in a market economy, because the latter does in fact have the potential for innovation and challenge of existing cartels. The party elite of the so-called communist states de facto accumulated enormous wealth and privileges, but among the population there was greater equality – compared to the West, it consisted in general poverty, which was fairly evenly spread. But the false appearance of greater social justice in the communist states kept Western capitalism in check and thus worked in favor of the welfare state. Today, Russian communism has abdicated. We have lost the enemy – and that has removed all inhibitions among neoliberals.
GJ: And we should not forget that the capitalist system had been discredited at the end of the war. In the United States, the Great Depression of the late 1920s had deprived millions of people of their livelihood. After a tumultuous economic boom, it had plunged the United States into the greatest crisis in its history. It took the economic recovery set in motion by Franklin D. Roosevelt – usually called the New Deal – to alleviate the most extreme hardship. In Germany, however, the collapse of the capitalist system helped fascism to power and led to war – without the Great Depression no Hitler, without Hitler no Second World War, as Eric Hobsbawm concluded. This terrible economic collapse and the horrors of war were still engraved in people’s minds after 1945. That explains why a policy of social equality was able to achieve such resounding success. Yet this policy was maintained for only three decades, after which it was increasingly watered down. Why have we now come to a point where the question of social justice is only dealt with in scholarly books and academic circles?
PM: Human forgetfulness certainly plays a role. The Great Depression and the horrors of war are far behind us. Most people simply lack the imagination to imagine that at any time this may well happen again.
GJ: I am sure that our lack of imagination plays some role. But I am afraid that there is another, a much deeper reason for today’s indifference to social inequality – and this reason has to do with another defect of capitalism. Capitalism not only promotes inequality, it also deeply affects relationships and thus people’s psyche.
PM: You’ll have to explain that to me. Remember. Our question is: Why have certain societies managed to keep inequality within reasonable bounds /and others like our contemporary one have not/?
GJ: I would like to choose as a starting point for my answer the example that you yourself consider a paradigm of systematic and brutal human inequality: the Indian caste system.
PM: An important paradigm indeed. The Indian subcontinent was invaded from the northwest some time during the second millennium BC, when it was populated by people who spoke Dravidian languages. The invaders introduced a strict hierarchical social order – the seeds of the caste system.To this day, DNA analysis reveals that among the highest castes, the proportion of European descent is the largest. The origins of the caste system are thus based on the power of conquering immigrants, a predominantly male horde that entered India via the Hindu Kush and, thanks to better weapons and brutality, was able to enslave a large part of the native population. But that is not all. The cunning of the conquerors of the time was to cloak their system of oppression in a religious mantle. Supposedly, it was the gods themselves who would have placed them, the foreign conquerors, in their privileged position. So, they did, of course, not owe it to the coincidence of an unjust historical invasion but to their own merit. Later, this merit was understood to be the good deeds performed by people in previous existences. According to this ideology, the lower castes are themselves to blame and responsible for their misfortunes because they committed the greatest misdeeds in previous lives. This is the well-known doctrine of karma, which is exceedingly clever in immunizing itself against any possible objections. Who, after all, is able to prove that two hundred years ago he did not live as an earthworm, a marten, a master baker or a bookworm, and during that time did all sorts of good or bad deeds that condition his present birth?
GJ: I agree with you. The whole absurdity of human inequality appears more glaringly in the example of the Indian caste system than anywhere else. The moment we see through rebirths and karma as ideological fictions, the caste system collapses like a house of cards. And yet…
PM: And yet? What are you trying to say? I don’t see any possible limitation of this verdict. Nor is the connection of the Indian paradigm with our starting point, the three happy postwar decades, clear to me.
GJ: Please wait a moment! Let me mention an important historical insight, which you yourself also emphasize. In subsistence societies, where people have to live from hand to mouth, equality is at its greatest. In contrast, human inequality was de facto enforced with the Neolithic Revolution and the wealth that came with it. This seems obvious. By cultivating the fields ninety percent of the population had to provide for that surplus of food, which gave the remaining ten percent the opportunity to pursue occupations beyond working on fields. We see that, except in a few small island communities and religious sects, this compulsion dominated all mass societies from China to India via Europe to the New World. But if inequality was in fact enforced by existing agrarian technology from the Neolithic to the Industrial Revolution, then the Indian example only fits the prevailing norm. Which means that we have rephrase our question: Which of the great agrarian cultures has been best able to cope with this technological constraint?
PM: If ninety percent of the people who worked the land had to produce that surplus of food that fed the top ten percent outside of agriculture, then I would say that those cultures did best with this limitation that allowed the lower classes to move up the social scale through education. Today, at any rate, it is the case that an active education policy seems to be a requirement if the liberal idea of establishing relatively equal conditions for the younger generation is to be realized.
GJ: But there was no active education policy anywhere on a large scale until the Industrial Revolution. No agrarian society could afford to provide the children of peasants scattered far and wide across the countryside with the same education as the children of the top ten percent. The resources required to do so would have made the burden on the shoulders of peasants fully unbearable. In other words, the bottom ninety percent never had a chance to rise to the top in any of the major classical cultures. If now and then in Europe a peasant child could become a cardinal because of his special talent, this was exceptional and did not invalidate the general rule.
The question therefore remains. What did the great cultures of the past make of this constraint imposed on them by the technology of agriculture and animal husbandry? If you ask the question in this way, the caste system suddenly appears in a very different light.
PM: All right. If this light may serve us to return to the starting point of our debate, that is, the three golden postwar decades, it shall be fine with me to learn more about it.
GJ: Let me first confirm that your view of the Indian caste system is the only correct one in our time – no sane person today believes in the ideological fictions of karma and reincarnation. But this is only one perspective. If we accept this belief as a fact of its time, then there emerges another view that is no less correct. Few societies have made reverence for all living beings the supreme duty of man as did Hinduism with its comprehensive religious interpretation of the universe. It clothed both nature and man with moral meaning. In the cycle of births, in which the people of India began to believe already in pre-Christian times, all creatures from the blade of grass over tigers and monkeys up to humans and the supernatural deities pass through the different reincarnations up to their final redemption. They all are reborn and get their meaning of life on the basis of the karma that is the balance of morally noble and morally reprehensible deeds committed by them.
Nothing was so far removed from this way of thinking as the modern idea of the world as a soulless machine that man may manipulate at will. Rather, individuals saw themselves as animated microcosms in the midst of a nature pulsating with and shaped by the forces of will. By virtue of their will and their decisions for right or wrong actions they were able to steer their own future in the wheel of rebirths either to their favor or disadvantage. If an individual decided for a morally exemplary life, as ordered by his or her respective caste, then a higher rebirth was possible – even the highest rank of one of the many gods of the Indian pantheon. If, on the other hand, his or her actions were morally reprehensible, the individual slipped further and further down the hierarchy of living beings until finally ending up among the “Pretas”, the terrible hunger ghosts. The thoroughly moral world view of Hinduism integrated the whole sphere of living beings within a single planet-wide net.
The natural consequence of such a world view was empathy with all living beings: In a quite literal sense, man recognized himself in each of them. Like himself, all other beings were wandering souls on the way to salvation. It was this theory of an all-encompassing community of all living things that made classical India a land of peaceful coexistence of all creatures. When we speak of an enchanted world citing India as an example, then we refer to a peculiar Indian trait. While the great empires of Mesopotamia and China strove for uniformity in their spheres of rule and were able to enforce it to a great extent, striving for a standardization of language, customs, economic rules, etc., Hinduism allowed diversity, yes, even made the pluralism of world concepts and traditions its very basis. Truth was relative, but not in the sense of Paul Feyerabend, who did not believe in any final and inviolable truth, but because, according to the Hindu view, people differ according to their state of salvation. This ideologically confirmed underpinned diversity made India what it still was until a century ago: a continent of inexhaustible material and spiritual diversity – a continent larger than the world, as the great poet of Argentina, George Louis Borges, once said in an unsurpassed bon mot. Within the constraints of the agrarian caste order, human freedom unfolded into an amazing spiritual cosmos: “The Wonder that was India,” as the Asian scholar A. L. Basham described it in his book of the same name.
PM: You will understand, Dr. Jenner, that as a scientist I have little use for lyrical outpourings like those of Borges. While it is certainly true that inequality is written into the fabric of all agrarian mass societies, we should rather ask ourselves how this could happen in the first place? Suppose a philosopher among hunter-gatherers, where killing was part of the daily business of survival, had asked himself at that time what life would be like in a society of peasants, where everyone pursued the peaceful occupation of planting grain and vegetables on some piece of field. I guess he would have said that agrarian economy would set the stage for eternal peace. You don’t have to own weapons, you don’t have to kill animals, if you live on grains and fruits.
GJ: And this prophetic vision would have been utterly wrong, as was soon to become apparent. Real and great wars only started after the epoch of the hunter-gatherers, that is with the transition to agriculture. And the reason is a well-known historic fact. Some clever individuals soon became aware that a few well-armed and mobile people were enough to subjugate and squeeze the surplus from any number of farmers who were tied to their land. From these few armed parasites emerged the top ten percent. It was the agrarian societies that brought about human war and inequality on a large scale.
PM: That’s right, and it’s just as true for India. The warriors (Kshatriyas) allied themselves with the priests (Brahmins) to perpetuate their own rule both militarily and spiritually.
GJ: Yes, and it is this view that corresponds to the understanding of modern critical science. But science so far failed to provide an answer to a most intriguing question. Why has such an unjust, seemingly inhuman system proved to be the most durable of all? For at least three thousand years the caste system prevailed unchallenged. But relative equality in a mass society just prevailed for hardly thirty years after the last world war. And moreover, the caste system not only dominated its own religious community, but also radiated to Christians and Muslims. They, too, developed caste-like inequalities though their ideologies forbade them to do so. Science has not yet solved this riddle.
PM: I think it is somewhat understandable that we do not necessarily want to explain absurdities.
GJ: And yet it is precisely such a seemingly absurd fact that may help us to better understand our present time. India was a mass society early on, and the main problem of such societies is the relationship of its people. To be sure, at first glance the caste system is nothing more than an elaborate apparatus of domination that cements social inequality – but that is only one perspective. As mentioned earlier, India, like any other agrarian society, had to cope with the fact that eighty to ninety percent of the people were forced to produce that surplus of food which allowed a minority of ten to twenty percent at most to pursue other occupations. But India has mastered this constraint in a special way – that is the second and more revealing perspective. It redeemed the people of mass society from isolation and anonymity by providing them with a firm hold in tightly knit communities. Each caste was a microcosm of unconditional mutual solidarity, where everyone was responsible for everyone else. A kind of social insurance had existed in this system for more than two thousand years – and for this purpose neither the state nor trade unions were needed.
PM: Because among its members the caste was the unit that provided a great deal of equality?
GJ: Yes, but this system did even more. The meaning of every individual’s activity was immediately comprehensible to the rest of society, because all castes served each other. While biologically segregated with marriages and even meals among members of different castes strictly forbidden, the baker, the blacksmith, the washer, the barber, the priest were indissolubly chained to each other in daily life because each caste had a right to their respective services. This was a kind of labor guarantee and permanency that in our societies was invented much later.
PM: I agree, these are interesting assertions, which of course science would have to verify in detail. But what are you actually trying to say with your excursion to India? I still miss the connection with our previous discussion.
GJ: The Indian caste system defined people as unequal from birth and underpinned this with an ideology that in our understanding is a mere fiction. In this respect, it is an absurd relic, as you rightly criticize in your book. But we are making a huge mistake if we overlook the fact that this system was able to cope in its own way – and very successfully at that – with the greatest challenge that massively threatens us today, namely radical isolation, lack of support, loneliness and anonymity of people who feel uprooted within large state structures.
PM: If I understand you correctly, you see the main problem of our society in loneliness, isolation and anonymity rather than in material inequality?
GJ: That is precisely my thesis.
PM: But then how do you explain that in the first three postwar decades Western states cared so little about this supposed main problem and, on the contrary, regarded the establishment of social justice as their most urgent task?
GJ: That was the time when people in the West no longer wanted to know anything about ideology. The fanfares of propaganda that had led to the were still ringing in people’s ears. They wanted only one thing: to regain a minimum of prosperity, and they did not envy others for wanting the same. But by the beginning of the 1980s at the latest, the war had been forgotten, prosperity had arrived, and most people were materially satiated. And people became aware that modern capitalism produces material wealth but does not increase their psychological well-being. They had to experience that human alienation grows, as it were, in parallel with gross national product.
PM: You mean to say that while capitalism is an efficient, perhaps the most efficient, instrument for increasing wealth, it achieves this goal only at the cost of destroying people in the process?
GJ: Despite all ist booms and busts, capitalism has undoubtedly proved to be the most successful economic model – in a purely material sense the world has never even remotely been as wealthy as it is today. It is precisely because capitalism is so terribly efficient that raw materials are being consumed at a rapid pace and water, air and earth being poisoned with the residues of industrial production. The moment half the world’s population enjoys the same standard of living as your country, Sweden, Mr. Molander, large parts of the globe will no longer be habitable. And that is still not the whole story. For this frightening efficiency of capitalism, not only is nature sacrificed, but also the deepest needs of man. In the perfect capitalist machinery, human beings serve as functional cogs to be replaced at any time. They are not supposed to build lasting interpersonal bonds among each other. In this way, neoliberal capitalism exerts a devastating effect on the needs of man. For these are oriented in the opposite direction: at lasting and reliable bonds with surrounding people and with the habitat where people live.
PM: An interesting thesis. But that is still no answer to the question you yourself posed earlier. Why did equality no longer count after those exceptional three postwar decades?
GJ: But I have already hinted at the answer. At the end of the 1970s, when most people were once again living in prosperity to the point of material saturation, memories of the war and the ideologically fomented Volksgemeinschaft receded. Instead, the need for spiritual support and togetherness, the need for identity and community came to the fore again. Now the ideal of social justice lost its appeal, while ideological proposals of struggle against taxes, for the preservation of migratory toads, against deforestation of the rainforest, for the climate, or the confession of sexual peculiarities created militant groups united by common beliefs and goals. Such communities are particularly tight-knit when they have to stand up against enemies – real or perceived persecution always brings people particularly close together. This is especially true for sexual or ethnic minorities, for whom, everywhere in the world, their own identity soon became much more important than social.
PM: Even if your analysis is correct, I don’t see what politics can do to strengthen human community. As I show in detail in my book, we can pass laws and strengthen institutions like labor unions to make our societies more socially just. But we cannot impose community. So, what is the use of an analysis that does not lead to practical consequences?
GJ: No, no state can impose community, but a strong – very strong – state can impose equality. That is true. But, dear Mr. Molander, you overlook a crucial difference. If it is true that the social instinct is one of man’s deepest needs, then the state does not need to become active. Friendships, communities, associations and cooperatives, that is, bonds, arise spontaneously among people. The state only needs to remove those impediments that prevent this need from unfolding.
PM: You mean to say that he must rein in capitalism when it isolates man, tears apart human bonds, transforms him into a mere interchangeable cog?
GJ: That’s exactly what I’m trying to say, because it’s dangerous when people can’t live out their basic need for community. Then this need will be satisfied in other ways. The uprooted, unstable, lonely person, for whom one’s neighbors are only numbers, has by no means lost his longing for human communication and bonding. Demagogues from Hitler and Stalin up to their more or less diabolical contemporary imitators know this quite well. Populist politicians of the right-wing spectrum in particular take advantage of this need when they artificially weld people together into hordes with unrealizable promises or inflammatory slogans. Then bawling mobs emerge, feeding on resentment and hatred – a diabolical substitute for peaceful community.
PM: If I understand you correctly, you are saying that in rich capitalist societies, which are flexible, mobile, and diverse to the point of disintegration, identity, not social justice, is the anchor consciously or unconsciously sought for by most people. In other words, the economic system should not interfere with our human need to create lasting ties to other people and to the nonhuman environment as well such as the village, the town, the professional community, and ultimately the homeland where we live. To my ears, that sounds very much like social romanticism.
GJ: You are right. During the past two centuries, capitalism, so efficient in economic terms, proved to be a power of destruction for long-term human ties; nowadays, even marriage and nation seem to be romantic reminiscences. But if we allow our neoliberal economic system to gradually break down lasting human communities, then we should not be surprised that people reach for artificial substitutes. In order to experience that inborn need for social belonging, they allow themselves to be seduced by the inflammatory slogans and whispers of demagogues. The lowest common denominator – usually hatred of some opponent built up into a bogeyman – then welds people together into manipulable hordes. Don’t think that these people criticize shallow seducers like Donald Trump for being a hereditary millionaire. If they are united with him in common hatred, that union means a hundred times more to them than material equality.
PM: I know, of course, that those people exist. But I know enough others who need neither good nor demagogic communities, people who feel very happy communicating across the boundaries of space and time with their colleagues all over the world. They are so absorbed in their respective specialties as businessmen, biogeneticists, astrophysicists, corporate executives, rock stars, etc., that home, nation, and place of origin have not the slightest meaning for them. These cosmopolitically oriented, often highly educated people are, by the way, extremely resistant to demagogic whispers.
GJ: Yes, but this is a favored minority – and favored minorities are on the upper rungs of the social ladder and therefore feel comfortable everywhere. And they don’t care about social justice either – scientists like you are an exception. Social justice and identity primarily concern the lower classes. These form the overwhelming majority, a majority which has never been cosmopolitan. For these people community means the people of their neighborhood, their language, their way of feeling and thinking. For these either offend or strengthen their self-esteem.
Let us be clear on this point: The great intellectual adventures that our time in particular has to offer in such abundance can be a substitute for the need for local rootedness and community. Through these adventures a privileged find their spiritual home in transnational communities. But when politics is oriented toward the privileged instead of the majority and its needs, it not only loses sight of social justice, but also prepares the ground for resentment, hatred, and demagogues.