In an email exchange, I wrote
“I have been reading War Peace and War by Peter Turchin, and I came across this:
When land becomes a scarce commodity. . .Those who do not have enough land to feed themselves will have to start selling what they have to make up the difference. As a result, they become poorer. By contrast, those who have more land than they need to feed themselves will have a surplus income that they can use to acquire even more land. Thus, the rich get richer.
This might explain the custom of the Jubilee year. To stop what otherwise would be a strong tendency for wealth to concentrate, particularly when a society is typically operating close to the Malthusian margin. If you don’t employ such a custom, the society is likely to disintegrate.
This also may account for the laws against usury. People on the brink of starvation will need to borrow. If they are charged interest, you will have poor people getting poorer and rich people getting richer.”
To which, my correspondent replied,
That makes sense. Does this spark any more thoughts on how this concept/phenomenon plays out in today’s world where land isn’t necessarily the key commodity and what an equivalent system might be to abate the issue?
My thoughts.
1. As an aside, land is still an important source of wealth, but it is not the land per se. Rents are high in Cambridge, but that is not because of the fertility of the soil.
2. That is not the only difference between our economy and the sort of agrarian society that Turchin is focused on or which gave rise to the Jubilee year. We no longer are in a Malthusian population situation. In the developed world already, and pretty soon almost everywhere, we have the demographic transition, in which the number of children born to each woman falls dramatically. Humans have created many tangible assets (roads, sewer systems, communication tools, factories, etc.) as well as intangible assets (rule of law, pro-social norms and customs, knowledge, etc.) As a result, there is no reason that people have to be pushed to the margin where they have to sell everything they have in order to eat.
3. Still, there may be other forces that cause the rich to get richer and the poor to get poorer. Let’s not worry about the rich getting richer, but instead worry about why the poor might be getting poorer. Maybe poor people pass along genetic endowments to their children that are adverse. Maybe poor people lack access to mainstream banking, and this makes their everyday transactions more costly. Maybe poor people are stuck with bad schools.
4. Suppose we believe that poor people themselves best understand why they are poor. In that case, it would be better to give them money than to have legislators and bureaucrats design packages of benefits like food stamps and Medicaid and so on. My own guess is that this is the best way to go (although like anything else, it would not be perfect). In that case, the modern equivalent of the Jubilee year would be to get rid of all the social programs and replace them with a fairly large cash payment. This is known these days as Universal Basic Income. It has proponents and opponents on both ends of the political spectrum.
If utility is driven more by relative wealth than by absolute wealth (beyond a certain level of basic needs) this would invalidate some of your conclusions. I believe this to be the case and people will increasingly vote accordingly as they view themselves as “have-nots” despite having basic needs met.
Coincidentally, I’m reading Greg Cochran and Henry Harpending’s The 10,000 Year Explosion at the moment. Their discussion of Malthusian limits in agrarian societies makes clear that there were other mitigating factors at work, also: when they run out of additional land to farm, agriculturalists send kids they can’t feed off to towns and cities to seek non-farm employment. Due to poor sanitation, those cities became population sinks; ie, high death rates from disease, so the population had to be continually replenished by migration from rural areas.
Also, war.
F.H. Buckley addresses this very same issue in his excellent The Way Back. Review at: http://blog.heartland.org/2016/05/review-of-f-h-buckleys-the-way-back-restoring-the-promise-of-america/ Highly recommended and a perfect booked to your Reintroduction. His proposals are not as specific as some might like but they are genuinely heterodox and thoughtful. I’m all for #4 but then I read Scott Sumner and wonder if I’m living in a cocoon. http://econlog.econlib.org/archives/2016/06/three_ways_to_d.html
The Jubilee year and usury laws probably helped to keep humanity stuck in a Malthusian equilibrium trap for an extra thousand years.
The problem is a steady ratcheting up of social complexity and common burden. The basics of life – work, housing, transportation, taxes, healthcare, interactions with the law, financial issues – all of these are immensely more complex than they were 50 years ago. For a smart, well educated person that can handle the burden, these changes come with many benefits. For a person of below average intellect, they can be crushing.
If you are going to cancel debt, why would people keep making loans? Maybe this is another one of the benefits. You basically guarantee a mild recession every 7 years or so instead of a Minsky Moment every 20 years.
This was hilarious satire, A+
…
Oh God, you weren’t serious, were you?
Define “serious”?
I have seriously always wondered why anyone would make a loan a year before jubilee. They forget every time?
Do you seriously think this is a good idea?
Conspicuous consumption of all kinds is a feature of highly unequal income distribution in traditional societies, for pretty much this reason. Societies that didn’t recycle some wealth back to the peasantry didn’t survive. It is one way to look at the trappings of religious festivals, for example.
” This is known these days as Universal Basic Income.”
Arnold Kling, say hello to Charles Murray.
Unfortunately, I’m a poverty is caused by genetics guy, so I don’t think that will help much either. But it might make a difference at the margins and it would certainly help get rid of lots of government, so I could support a version of the program.
Who would consciously choose to spend as much on health care as we do, but who would consciously choose not to when faced with the alternative, and when is we, I? Many decisions fall short of rational and we fall back on experts to tell us.