The Wisdom of Solon

Somewhere in the blogosphere (bilbo?), a poster quoted from Will and Ariel Durant’s “Lessons of History”, and I thought a larger excerpt more appropriate:

“We observe that the invading barbarians found Rome weak because the agricultural population which had formerly supplied the legions with hardy and patriotic warriors fighting for land had been replaced by slaves laboring listlessly on vast farms owned by one man or a few. […]

 The experience of the past leaves little doubt that every economic system must sooner or later rely upon some form of the profit motive to stir individuals and groups to productivity. Substitutes like slavery, police supervision, or ideological enthusiasm prove too unproductive, too expensive, or too transient. Normally and generally men are judged by their ability to produce-except in war, when they are ranked according to their ability to destroy.

Since practical ability differs from person to person, the majority of such abilities, in nearly all societies, is gathered in a minority of men. The concentration of wealth is a natural result of this concentration of ability, and regularly recurs in history. The rate of concentration varies (other factors being equal) with the economic freedom permitted by morals and the laws. 

Despotism may for a time retard the concentration; democracy, allowing the most liberty, accelerates it. 

The relative equality of Americans before 1776 has been overwhelmed by a thousand forms of physical, mental, and economic differentiation, so that the gap between the wealthiest and the poorest is now greater than at any time since Imperial plutocratic Rome. 

In progressive societies the concentration may reach a point where the strength of number in the many poor rivals the strength of ability in the few rich; then the unstable equilibrium generates a critical situation, which history has diversely met by legislation redistributing wealth or by revolution distributing poverty. 

In the Athens of 594 B.C., according to Plutarch, “the disparity of fortune between the rich and the poor had reached its height, so that the city seemed to be in a dangerous condition, and no other means for freeing it from disturbances . . . seemed possible but despotic power.” 

 The poor, finding their status worsened with each year- the government in the hands of their masters, and the corrupt courts deciding every issue against them-began to talk of violent revolt. The rich, angry at the challenge to their property, prepared to defend themselves by force. Good sense prevailed; moderate elements secured the election of Solon, a businessman of aristocratic lineage, to the supreme archonship. He devaluated the currency, thereby easing the burden of all debtors (though he himself was a creditor); he reduced all personal debts, and ended imprisonment for debt; he canceled arrears for taxes and mortgage interest; he established a graduated income tax that made the rich pay at a rate twelve times that required of the poor; he reorganized the courts on a more popular basis; and he arranged that the sons of those who had died in war for Athens should be brought up and educated at the government’s expense. The rich protested that his measures were outright confiscation; the radicals complained that he had not redivided the land; but within a generation almost all agreed that his reforms had saved Athens from revolution.

The Roman Senate, so famous for its wisdom, adopted an uncompromising course when the concentration of wealth approached an explosive point in Italy; the result was a hundred years of class and civil war. Tiberius Gracchus, an aristocrat elected as tribune of the people, proposed to redistribute land by limiting ownership to 333 acres per person, and alloting surplus land to the restive proletariat of the capital. The Senate rejected his proposals as confiscatory. He appealed to the people, telling them, “You fight and die to give wealth and luxury to others; you are called the masters of the world, but there is not a foot of ground that you can call your own.”  Contrary to Roman law, he campaigned for re-election as tribune; in an election-day riot he was slain (133 B.C.). His brother Caius, taking up his cause, failed to prevent a renewal of violence, and ordered his servant to kill him; the slave obeyed, and then killed himself (121 B.C.); three thousand of Caius’ followers were put to death by Senatorial decree. Marius became the leader of the plebs, but withdrew when the movement verged on revolution. Catiline, proposing to abolish all debts, organized a revolutionary army of “wretched paupers”; he was inundated by Cicero’s angry eloquence, and died in battle against the state (62 B.C.). Julius Caesar attempted a compromise, but was cut down by the patricians (44 B.C.) after five years of civil war. Mark Antony confused his support of Caesar’s policies with personal ambitions and romance; Octavius defeated him at Actium, and established the “Principate” that for 2 10 years (30 B.C. -A.D. 180) maintained the Pax Romana between the classes as well as among the states within the Imperial frontiers.

After the breakdown of political order in the Western Roman Empire (A.D. 476), centuries of destitution were followed by the slow renewal and re-concentration of wealth, partly in the hierarchy of the Catholic Church. In one aspect the Reformation was a redistribution of this wealth by the reduction of German and English payments to the Roman Church, and by the secular appropriation of ecclesiastical property and revenues. The French Revolution attempted a violent redistribution of wealth by Jacqueries in the countryside and massacres in the cities, but the chief result was a transfer of property and privilege from the aristocracy to the bourgeoisie. The government of the United States, in 1933-52 and 1960-65, followed Solon’s peaceful methods, and accomplished a moderate and pacifying redistribution; perhaps someone had studied history. The upper classes in America cursed, complied, and resumed the concentration of wealth.

We conclude that the concentration of wealth is natural and inevitable, and is periodically alleviated by violent or peaceable partial re-distribution. In this view all economic history is the slow heartbeat of the social organism, a vast systole and diastole of concentrating wealth and compulsive recirculation.”

It seems clear to me that our biggest problem is not mortgage debt but inequality. The reforms of Roosevelt and his successors — tight regulation, 90% marginal income tax rates, high levels of public investment — were remarkably effective at creating a highly productive middle class with rapid economic growth. And the rich remained rich — they were just millionaires instead of billionaires. It is far past time for another re-distribution, but will we have the wisdom of the ancient Greeks or the civil strife of the Romans? I’m not hopeful.

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The Wisdom of Solon

7 thoughts on “The Wisdom of Solon

  1. beowulf says:

    Fascinating post. The more things change, the more they stay the same. Its remarkable that even at the end of Civil War, the focus was on political reforms within the rebel states (which were quickly ignored) instead of economic redistribution. Its a pity that the fairly awesome General Benjamin Butler turned down Lincoln’s VP offer, now that was a man with a plan– Greenback currency reform (“One of the most important matters which pressed upon me immediately after my occupation of [New Orleans] was the condition of the currency… ” p. 504) and land reform ( “I would have confiscated the real estate of all those who had voluntarily taken an active part in the Rebellion… Their lands so forfeited I would have divided among the private soldiers of the army. p.909).
    http://books.google.com/books?id=u0spAAAAYAAJ&pg

  2. Oliver says:

    The concentration of wealth is a natural result of this concentration of ability

    The main ability always seems to be that of concentrating wealth. So, although I don’t really buy the democracy = meritocracy argument, it is a very fascinating excerpt indeed!

  3. This isn’t a meritocracy argument per se. For example, suppose A has 10 units of abilities, and B has 11 units of abilities. If A’s wealth is 100, while B’s wealth is 10, then even small variations in abilities lead to large concentrations of wealth. And that’s what you would expect with exponential accumulation.

    1. Oliver says:

      But, if I understand correctly, it is still maintained that the differences in wealth can be traced back to some differences in ability, no matter how minute? I see how market forces can bring about the difference in price between a Van Gogh and an early Oliver. But my claim is that that is an exception that can only explain very few pockets of wealth. Judging from the people I deal with in my line of work, I’d say the rich are mostly no Van Goghs. In fact, I’d be arrogant enough to say they are often no more discernibly Van Gogh than myself. The way I perceive my surroundings, it seems more important to inherit than to be endowed with some measurable amount of merit. And I use the word ‘inherit’ in the broadest sense, that includes social skills and codes and other means of social stratification etc.. How much wealth is actually ‘deserved’, as in earned through measurable and useful skills?

      1. I understand. There are a couple of things going on here, though. “Ability” is very abstract. The connection between “Ability” and “Marginal Revenue Product” is filtered via institutions and ultimately reflects power, or wealth. Ability itself is the result of educational opportunities, which also depends on wealth. And how much ability is valued is a result of conscious decisions on the part of those who organize production. You can dumb down a production process and have an army of poorly paid workers or you can have a more skilled production process with fewer workers, each earning higher wages. You can pay the CEO a lot and the engineer less, or you can pay the CEO less and the engineer more.

        A more nuanced view would understand the contribution of ability together with the underlying power relations. You can recognize the role of one without denying the role of another.

        Take a look at the David Noble’s “Forces of Production”.

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