Economic Inequality in Preindustrial Times: Europe and Beyond

RUTH MASON: Hi. Welcome to the Oxford Virginia Legal Dialogues. Thank you for joining us today. I'm Ruth Mason. I'm the Edwin S. Cohen, distinguished professor of law and taxation at the University of Virginia, and A. Max Planck law fellow. I'm also the faculty director of the Virginia Center for Tax Law.

My co-convener for this workshop series is Tsilly Dagan, who is a professor of taxation at Oxford University, and one of the directors of the MSC in taxation at Oxford University, Faculty of Law.

The purpose of this workshop is to foster communication between tax scholars and non-tax scholars, and the format for this session is that silly. And I select a tax scholar that we admire and we ask them to select a work of non-tax scholarship that they admire. And then we invite the tax professor and the author of the work to join us here online for a discussion.

All of our sessions are open to the public and all of our prior sessions are available online. So first I'd like to introduce our commentator for today. We are delighted to have Ted Seto who is a professor of law, and the honorable Frederick J. Lower Jr., chair at Loyola Law School.

Ted clerked for Judge Walter Mansfield on the second circuit, and he practiced for 14 years as a civil litigator and tax attorney at Foley in Boston and Drinker Biddle & Reath in Philadelphia before joining the Loyola faculty in 1991.

Ted's current research interests include tax theory, ethics, and epistemology. We're especially pleased to have Ted here with us today because he is a long time and active participant in the Oxford, Virginia legal dialogues and because in 2016 and 2017 he was an academic visitor to the Oxford law faculty.

We are delighted that the piece that Ted selected was by Guido Alfani, who also joins us today. Guido is a full professor at Bocconi University in Milan. He holds a PhD in economic and social history, and his research areas include economic history and demography, with a focus on long-term dynamics, on economic inequality and social mobility, and on the history of epidemics and pandemics.

He's an affiliated scholar of the Stone Center on socioeconomic inequality in New York, a research fellow of the Center of Economic Policy and Research in London, and a research associate of CAGE, the Center for Competitive Advantage in the Global Economy in Warwick, UK.

He's also a member of Bocconi's Dondena Center for Research on Social Dynamics, and director of the Master of Science in economic and Social Sciences at Bocconi. He too has visited Oxford at Nuffield College, as well as many other prestigious institutions around the world. So welcome to Ted and Guido. An I'll turn it over to Ted.

THEODORE P. SETO: Thanks so much, Ruth. So the paper I'm going to present today is Guido Alfani Economic Inequality in Pre-industrial Times, Europe and Beyond, which appeared in the Journal of Economic Literature three years ago.

This paper is an extraordinary step forward, I think, in the area in which it treats, but I'm going to characterize it and I hope this doesn't offend anyone as it's still a work in progress. There's a lot of work to be done in this area, and I think you will see that as we go forward.

Let me put up now my screen. So we've got some PowerPoint slides. There we are. All right. So the question that the paper think is relevant to in tax policy, which is where we're ultimately heading, is what about economic inequality, either wealth inequality or income inequality.

Should taxation be used to reduce income inequality? If so, how best can it do so? And I think this paper, I think, provides a lot of insights that may be relevant to those questions. Our answers to the questions may depend in part on what causes economic inequality in the first place.

Give you an example. Robert Wade has written that in Economic Inequality is, quote, "an inevitable outcome of the market as a coordinating mechanism, and a necessary outcome to function as an incentive mechanism." In other words, maybe economic inequality is a necessary evil or it may not, in fact, be an evil at all.

Now, most modern theorists have based their analysis primarily on data from the Industrial Revolution on basically the past 250 years. And what is extraordinary about this article is that it collects and summarizes a very large recent literature that quantifies economic inequality back as early as 10,000 BCE, but at least up through 1,800 and the Christian era.

The resulting data I suggest call into question prevailing theories of the causes of economic inequality, so, for example, Simon Kuznets, Thomas Piketty, and suggests that the causes of economic inequality may be more complex and contextual than prior work has suggested.

So I want to begin just by talking about measures of inequality. For those of you who may not be as comfortable with some of the economics as the paper assumes, there are at least two measures of economic inequality, and that's either income inequality or wealth income or wealth inequality that are commonly used.

The first is the share of wealth or income held or received by the top 10%. It's of conventional to use that as it's self-explanatory. The second is something known as the Gini index or coefficient, which I'm just going to call the Gini for ease of reference. And this can be a Gini on wealth, it can be a Gini on income, it can be a Gini on actually anything.

So for example, a number of the studies in the paper talk about Ginis of house size. So it's a very flexible index of inequality. And I just want to talk for a moment about how this works.

Gini is a measure of inequality. It is typically reported as ranging from 0 to 1 or from 0% to 100%, and I'll go back and forth on that as it came out of the paper. A low Gini indicates low inequality.

So, for example, this is data from 2014, from the World Bank. Norway had a Gini of 22.7 implicitly percent, so it was the most equal country in the world at the time. A high Gini indicates high inequality. So, for example, same data set. South Africa had a Gini of 63. These are both income genies.

So how do we compute the Gini? We rank our population from the lowest to the highest on whatever the relevant measure is, we plot the percentage of the cumulative total resources that the cumulative total population holds, and the resulting curve is then known as the Lorenz curve.

So here's the typical graph. You will see here that if we start on the left and move to the right. Starting from the poorest people, they don't contribute very much to the overall cumulative totals, but as we get to higher and higher income or higher and higher wealth parts of the population, we end up with a much steeper slope.

So the Gini is simply the area labeled A, divided by the total area of the triangle. And what that means, of course, is if you have perfect equality, A will be 0 because, in fact, everyone will contribute exactly the same amount to the total cumulative resources, or you could have A being one, in which case, of course, the Lorenz curve simply is simply the bottom hand straight line and the right hand straight line, and there you are. So it's a very elegant, simple measure of inequality.

All right. So I want to begin by turning to some of the selected reported results in the paper, and I want to just warn you here, there's a lot of material in the paper, both in terms of results that am not at all talking about, and also in terms of explanatory material. I can only touch on small parts of it, but I want to touch on the parts that I think really jumped out at me the first time I read the paper.

So here is the graphic. I think that just really kind of went wow when I first read the paper. This is evidence so far, and this is a graphic that appears very late in the paper as sort of a summary.

And what we have here is the share of wealth of the top 10% in Europe from 1300 to 2010. And it's made up of two data series, you will see on the right a lighter gray data series labeled Thomas Piketty, and on the left data series labeled Alfani.

And so what Guido did here was he took a data series that Thomas Piketty reported in his very celebrated book, Capitalism in the 21st Century, which came out several years-- it came out about a decade ago, and he then extended it backwards from 1800 to 1300. And you can see here-- you can see here they match up very, very nicely.

Now, based on this set of data series, Guido comes up with two what he calls stylized facts. And this is from page 10 of the paper. He says, overall, this recent research has provided enough evidence to establish two previously unknown stylized facts about pre-industrial inequality in Europe in the period 1300 to 1800, first, from circa 1450 or 1500 until 1899. Economic inequality of both wealth and income has tended to increase almost monotonically across almost all of Europe.

I think one of the most striking things about this graphic is a straight line with very little variation in slope running from 1450 up through 1914. And second, before 1450, we find a phase of sustained inequality decline triggered by the Black Death epidemic of 1347 to 1351.

So now from this, we might be tempted to infer that, and I'm going to have extended stylized facts, we might be tempted to infer that first, in the absence of extreme shocks, economic inequality tends to increase monotonically over time. But we have two extreme shocks. One at the beginning of this data series and one at the end.

The first at the beginning in Europe, a shock triggered by the black death, which resulted in a phase of sustained inequality decline for about a century, a massive shift in the dynamics, and then at the end, beginning in 1914, a shock triggered by an extended period of warfare from 1914 to 1949, killing somewhere between and 150 to 170 million combatants, that's not counting civilians, and that shock resulted in the face of sustained inequality decline for about half a century.

So one could look at this graphic and say, well, perhaps increasing economic inequality is inevitable except in times of extreme shocks. What should we do about inequality? Maybe we should have a plague or maybe we should go to war and destroy everything, but that seems a very high price to pay for getting rid of inequality.

Well, before going any further, I just want to focus in on some of the implications of this graphic, and some of the sub graphics that go into building the Alfani series. The question that this raises is what is the proper unit of analysis?

So if you look at the Alfani series, that was the left hand side of the graphic that I showed you, it's an average of wealth data for Savoy, Florence, Kingdom of Naples and the Republic of Venice, basically Italy, or at least significant parts of Italy.

And this raises the question, is Italy representative of Europe as a whole? Because, of course, the right hand graphic, Piketty's graphic was based on different countries data, the UK, Sweden, and France. And the series, although it looks very elegant and clean, therefore represents perhaps incompatible data.

Now the larger question this raises is, what is the relevant economic unit on which this kind of analysis should be performed, and economists would probably ask the question then, will the answer depend on the degree of economic integration among the region?

So if Italy, Sweden, UK, and France were all integrated economically, one would expect, for example, that movements in one would be reflected in another and that we would not see a lot of variation from one to the other, so that the apparently continuous data set that the graphic that I showed you just a moment ago may actually represent simply the functionings of an integrated society.

Now I'd like to add in a further piece of evidence. This goes back now to the Roman empire, between the Roman empire, by the way, and the beginning of the prior data series, which began in 1300, there is very little data being reported being reported. It's kind of known as the Dark Ages for a reason, I think. In any event, on this set of data, on this set of studies, it's rather dark.

But here in the Roman Empire, we have something very interesting going on. We have, as you can see, income inequality growing to the year 150, and then just collapsing pretty dramatically. And the question that I have, I think, would obviously derive from this is, well, is this consistent with the extended stylized facts that I noted a little bit earlier? And my answer is, well, perhaps it is.

So the period prior to 150 is a period of State Building, and it's very similar to the periods in which we have monotonic increases in the period from 1300 to 1800. But from 150 on, we have in Roman history a series of extreme shocks.

So, for example, the Antonine Plague begins in 165, runs for another 15 years. There's a series of imperial crises to 35 to 85 foreign invasions, civil wars, economic disintegration.

The invasion of the Germanic peoples began-- the invasions began in 376 and continued for another century. Then there is the Late Antique Little Ice Age in 536, which runs for another 25 years or thereabouts, producing widespread famine, epidemic disease, social disruption. And one of the consequences is the plague of justinian, which is quite similar in scope to the Black Death that's in that begins in 541.

And one other thing I want to point out, the Ginis get very low. We won't see genies like this anywhere else in the paper. So, for example, after 300, the genies are down below 0.15.

And what is that about? Well, when we get down to the Malthusian limit, everyone living on subsistence, we cannot have a high inequality because, of course, that means that someone has to be lower. And what happens when they're lower when I'm down at the Malthusian limit is they die.

So this is a period, this is what the data suggests, a period in which people are living at subsistence levels, and there's not a lot of surplus to go around to be extracted by the wealthy class. Everyone is just getting by.

All right. So I want to turn now to some of the explanations that Guido explores for economic inequality. Oops, let me move forward here. The first explanation, and this is probably the most classic explanation, is growing inequality is attributable to economic growth. And we saw that in Robert Wade's quotation.

You need to have economic growth to have economic inequality. Economic inequality is just a sign of economic growth. This is perhaps a benign phenomenon. We want economic growth, and therefore we should just put up with inequality to the extent that we can't. Maybe one is causal to the other, and it's not clear which direction the causality runs.

One of the things that's very interesting about the new data sets that are made available through this paper is that they tend to show there is no clear relationship between economic growth and growing inequality.

Simon Kuznets, of course, had his famous inverted U-curve. I think the literature suggests that Kuznets explanation has not been borne out in the most recent data, but it's pretty clear that if Kuznetsov hypothesis was not dead, it is now dead. There is no relationship Alfani shows between economic growth and growing inequality or no necessary relationship in any event. It's often the case that inequality grows during periods of economic stagnation.

And you can see here, here's another graphic from the paper, this is a paper-- this is a graphic showing per capita GDP across much of the period that we had explored before, where you will recall there was monotonically increasing growth in inequality, and here we have GDP per capita, and it's not going anywhere except in the northern low countries.

But France, Spain, Germany, Central, Northern Italy, basically flat, very hard to make an argument that it's economic growth that's driving that monotonically increasing inequality.

Explanation number two, which Guido calls an explanation based on the functional distribution of income. And I think the most celebrated version of the explanation is Thomas Piketty's.

And what Piketty said, as you will recall, is that as long as the rate of return on capital, which he calls R, is higher than the growth rate of national income, which he calls G, and as long as wealth stays highly inheritable, then inequality of both income and wealth will continue to increase. In other words, it's just a law of nature or a law of economic nature.

And he makes a very strong case for this in his capital in the 21st century. But Piketty's data analysis was based almost exclusively on data from the beginning of the Industrial revolution, beginning in just before 1800, and he does have a little bit of data from pre 1800, but it's very thin. It's not very robust data, and he makes very generalized-- draws very generalized conclusions from it.

What Alfani is able to do with his much extended data set is to show that Piketty's thesis is inconsistent with significant portions of the data, most importantly, with the decline in inequality following the Black Death. So the Black Death killed people, it did not destroy physical capital.

One would expect the rate of return on physical capital to remain high, higher than the growth rate of national income, which it certainly was, and yet inequality declined significantly across the period of time after the Black Death began.

And a similar analysis can be performed on the Roman Empire after 150 C.E., as you will recall from the graphic that I showed with regard to the Roman Empire.

Third type of explanation we can have for the growth of inequality or for the decline in growth of inequality, so it's both sides now, is based on shocks, for example, plague or war and institutions. And the thesis here is that shocks can be and often are mediated by institutions. So it's an interactive explanation. And an example of this is the Black Death.

Now, the classic explanation of the impact of the Black Death on inequality was the labor shortages increased labor share of income. But one of the things that Alfani does is to say, well, that can't be the complete explanation. Why? Because we find other plagues not producing the same result.

And so one of the things-- one of the moves he makes is, say, maybe part of the reduction in inequality is explained by partible inheritance rules. In other words, rules in which, let's say if you have seven kids and you die, your property goes out seven ways. And that, of course, will reduce large holdings of capital and should increase equality, reduce inequality.

By contrast, in later plagues, we have a shift in property rules to primogeniture, and that in turn maintains the coherence of the large estates. Another apparent conclusion from the extended data sets that Alfani presents is that state collapse is very clearly associated with decline in inequality. We have the example of the Roman Empire.

We don't have any graphics for this, but he also says the same thing happens in the Tang Empire in China, the Knights in the 10th century CE, and there are a bunch of possible reasons for that.

One of the ones that I find most intriguing that he suggests is that state collapse may reduce opportunities for rent seeking by elites. So if we have a stable period in history, elites can work their magic and extract more and more surplus from society, but when states collapse, their opportunities disappear.

And conversely, and again this is another very interesting surmise, the rise of military competition, for example, in Europe, leads to pressure to raise taxes, which leads to a rise in fiscal capacity and necessary fiscal capacity, which in turn leads to a rise in regressive taxation, and the income Ginis, of course, are after tax.

So if you have to raise taxes, and if the only taxes you can raise are regressive, either for political or for logistical reasons, then perhaps we end up with inequality results. In any event, institutional explanations may be more contingent, more complex than have been suggested before. I want to just touch on this final topic, and then and then let Guido comment.

The last explanation or series of explanations that are a set of explanations are demographic. One of the earliest explanations for inequality was postulated by David Ricardo, and that was based on population growth, he said as population grows, land, read capital becomes relatively more valuable, thereby making economic inequality more likely because those who owned the land become take home a larger and larger share of the product.

And at least at the state level, Alfani shows there is no apparent causal relationship between population growth and economic inequality. So that explanation isn't very satisfactory. His data sets do leave in place the possibility of two other demographic explanations.

One is proletarianization. This is the process through which workers lose ownership of the means of production, so this is still possible. And the other is urbanization. Urban incomes always tend to be higher than rural incomes, or at least reported incomes are, and therefore, as people move to cities, we end up with larger amounts of inequality.

So his bottom line conclusions. And I think these have to be characterized as tentative because as I've said, I view this as a major step forward, but a work in progress that it's very hard to say there's no-- it's very hard to say there is a single necessary cause of inequality based on the data sets, and there may have been a number of sufficient causes, economic growth, demographic factors, institutional factors.

And he says when one or more of these potential causes became active, inequality grew. And, in general, in pre-industrial times, it was easier for inequality to grow than to decline. We have lots of examples of increase, but very few of long lasting inequality decline.

Now I'm running out of time, so I'm not going to go into the last little bit of my presentation. One of the final things that he does in his paper is to introduce another possible measure of inequality, which he calls the inequality extraction ratio, which would take a significant amount of time to explain. So I'm just going to pause at that point and say, thank you so much for this paper, and I'm really looking forward to seeing what work comes out of it.

GUIDO ALFANI: Thank you very much, Ted. I think I'm supposed to answer directly, right, Tsilly? OK fantastic. Well, Thank you very much, Ted. I will now try to share my screen. Are you seeing my slides properly? Yeah, I trust you are. Ted, Thanks again. Delivered really--

SPEAKER: We cannot see your slides. Can you try again, please.

GUIDO ALFANI: OK. Do you see them now?

SPEAKER: No, sorry. Something's coming up. Hold on. Almost. Yes. Thank you.

GUIDO ALFANI: OK. Fantastic. I trust that you continue to see now the slide presented in full screen.

SPEAKER: Yes.

GUIDO ALFANI: Ted, thanks again. You delivered really an excellent presentation of the paper, which is, as you can well imagine, a paper which required A lot of work. It was a long process writing it, and it builds upon a huge amount of research. A substantial amount of that research is my own research in the context of two projects funded by European Research Council, which I'm happy to thank for the support.

Now you raise also some very relevant questions in particular about the relevant unit of observation and whether Italy is representative. Now, I will not bother you with a survey. What I'm going to tell you, I will jump straight in.

Now, the information we collected in this project, and this is the vast majority of the information we now have for the pre-industrial period is at the household level. So we have for each specific area or ancient state, we have a sample of communities, and for each community we have a household level information.

So this sample is then used to build a distribution, which represents the wall of the state, if you want, at least in the Italian case, when we can go state by state, and that dynamic, that trend for the states is meaningful because in practice, it matches what we find at the level of each single community.

So when I show you, for example, the Republic of Venice and you see this nice blue line, by the way, this is the wealth share of the richest 5%, you have to be aware of the fact that blue line basically matches what happens in all the cities and villages of the Republic of Venice, which we have information about, except for very minor exceptions, which are then discussed in a publication which focus on the specific area.

So this is what we do, and I believe that in terms of providing the overall-- providing a discussion of the overall results from this project, but also of the overall tendencies, it's important to go at the level of which ancient state, for example, the level of the Italian state before national unification. On principle, also the level of the German states before the national unification.

But we can do that for Germany because we don't have a sample large enough, which is why in this graph, you see something called Germany, which is basically a general reconstruction for the German area defined into the boundaries. And that's again, a sample of cities and villages, so not the single Germanification states, but this we can do.

So the point is, if we can go down to the level of the single state, it's meaningful then to explore the potential impact, for example, of changes in per capita taxation, which we know about mostly from the point of view of the central state administrations.

And also because the single states will have their own dynamics, for example, we could discuss what happens in the context of Italy when you see these different parts of the Italian Peninsula declining earlier or later or growing as is the case, for example, of the subordinate state in the 18th century, while all the others are stagnating. So there is variation, which can also be interpreted in a meaningful way.

And then, of course, is Italy representative. Now, in this slide, which has been produced after the article was published, you can see, for example, Germany, which I already mentioned. So Germany for most of the period and surely till the beginning of the 17th century, matches almost perfectly what we find in Italy.

Then it seems different for the later period, but in fact, the difference is only the 17th century, and then you have also in Germany inequality growth in the 18th century.

But in the 17th century, we have another phase of inequality reduction, and this is pretty interesting because this has been triggered apparently by the combination of the terrible plague in the 1620s, which is in Germany, as in Italy, as in South France, the worst plague as far as we know, after the Black Death of 1347, '52.

And on top of that, in combination of that, you also have the 30 years war, so 1680 to 1648, which in a pre-industrial context and beyond the case of, say, state collapse with the fall of the Roman Empire, so forth and so on, but say in medieval and early modern times, in the European context, the 100 years-- sorry, the 30 years' war was the most destructive conflict in terms of also the damage done to physical capital, so to physical wealth.

So it's a combination of the worst plague after the Black Death, and these exceptionally devastating war that in Germany triggers a second phase of inequality reduction that we don't see anywhere else. But in practice, it's like a 1 centimeter divergence, otherwise, the dynamics are very similar.

Beyond this, I could tell you something about England. There is some reason to argue that also in England, wealth inequality is growing in the early modern period. The problem is the earlier part of this graph as far as England is concerned, is built on material which is very different compared to the period from the second half of the 17th century on.

So you have mobile wealth measured based on the subsidies, which were the main instrument of direct taxation in medieval and 16th century England. And that's compared instead to the later period with the estimates of the wealth share of the top quantized produced by Peter Linder based on probate inventories.

So the point is the kind of wealth they represent is a bit different, the method is different. So when we trace a line between 1525 and the beginning of the-- sorry, at the end of the 17th century, in this context, there is a large degree of incertitude.

This being said, I could add, for example, the case of the Kingdom of Sicily. I could get some information for a few other areas. I could mention that income inequality was growing in the southern low countries as well as in the northern low country.

So nowadays Belgium and nowadays the Netherlands, which from the 16th century became two separate states, so also there you have growth in income inequality. I couldn't put that into the graph that you liked, the graph you showed at the very beginning because it's income and wealth. But, in general, they also confirm for the early modern period, so from the beginning of the 16th century.

This really apparently very strong tendency for inequality to grow almost everywhere in Europe. And again, for now, the main exception is Germany in the 17th century and in the 17th century only.

So is Italy generalizable? I would say also based on this additional evidence, I think it represents a broader trend. In the future, we'll also have more information about France, about Northeast and Spain. Based on what we have now, the dynamics there might be a little bit flatter than those found for Italy, but the picture would not change. At least this is my educated guess now based on ongoing research.

As you mentioned, if we look at the very long run, which we can do here, and this is the wealth share of the one percenters. So again, a top quintile, you are showing my data for the top 10%, if we look at the top five of top one, it's basically the same thing from the point of view of how we approach the description of long run dynamics in wealth inequality.

So again, here you see very clearly as in the graph, you showed this drop after the Black Death and the drop in inequality in the wealth share of the one percenters in this case from the beginning of World War I, and then until the 1970s.

So it's kind of tempting to argue that in the long run there is almost a natural tendency for inequality to grow, and the only things which-- and the only events which can lead it to decline are major catastrophes, so a conclusion might be that the cure is is worse than the illness, and then there is not much we can do.

But I personally would resist this interpretation because we shouldn't forget. Here you have again the wealth share of the 1% 1800 only in the period 1,800 to 2020. We shouldn't forget the fact that human agency actually is very important in shaping this dynamics.

In the 20th century, after a phase of inequality reduction, which is strongly connected to the two world wars, we have inequality decline for another couple of decades, and that's kind of the continuation of very progressive taxation combined with the development of the welfare state. These are usually the reasons given for this later phase of inequality decline.

In the previous period, in the pre-industrial period, as you also mentioned, it's very important to see what was done. I mean, the way in which institutions were shaping distributive dynamics. And regarding that, we can look in a little bit finer way to how the way in which fiscal systems were structured in a pre-industrial context, shaped inequality dynamics.

So for the Republic of Venice and for now only for the Republic of Venice, it was possible to try and see which was the-- and try and estimate the effective fiscal rate weighing on each portion of the wealth and income distribution. So an assumption here is that the wealth distribution is the same as the income distribution.

This hypothesis could be relaxed, made less rigid, but this wouldn't change the outcome basically. So it's easier for me to present the data in this way because it allows to jump directly to this kind of graphs.

So what you see here is the difference between the percent of wealth owned/income earned and the percent of tax paid by the size of the distribution. At the top, you have disentangled the top 5% and the 5% immediately below that.

So the point is, you see clearly here that in the-- I mean, if the way in which I modeled the Venetian fiscal system is correct, that was a system in which you have many different sources of inequality in taxation because you have a systematic discrimination of the rural dwellers compared to the city dwellers, so the rural dwellers are taxed a bit more than the city dwellers.

You have that part of the wealth and the income at the top of distribution was exempt from taxation, for example, the income from the so-called privileged properties, which in the Republic of Venice were not much, but were heavily concentrated in the bottom 5%, maybe, in fact, even only in the bottom 1%.

And then you have a strong prevalence of indirect taxation, which tends to be regressive basically by nature. So I try to model how the fiscal system of Republic of Venice was structured. Here you have here 1550, and how it impacts on the distribution.

And you see here that basically the only groups which were advantaged were those at the very top. So the top 10% was the only group which was favored sort of by paying as a-- by paying less than they would have needed to pay under the hypothesis of proportionality, of taxation, not of progressivity or simple proportionality.

So the system was regressive, and it was particularly punishing towards the middling groups. You can see it visually here. And [INAUDIBLE] groups and not the poor? Well, because the poor were somehow protected by the poverty. They wouldn't have much to be taxed. So if you have zero wealth, you can apply to that whatever rate of wealth taxation you want. What you will pay will continue to be zero.

So the system here in Republic of Venice does not change. What changes is the intensity of per capita taxation, because the Republic of Venice, as pretty much all the European states, had to increase fiscal revenues in order to be able to defend itself and to pay for war.

And the point here is that if you look at the dynamic of the system, it seems that the system is converging towards a kind of more balanced, more egalitarian, if you want, situation, which seems to be contrasting with the tendency for wealth inequality to grow across the period.

But the reason is, and of course, this graph fits this other graph, which shows you clearly that the the total share of taxes paid by the richest were growing across the early modern times. How is it possible? Well, the point is that the richest in the Republic of Venice are paying more and more of the total amount of taxes, but that's simply because they are concentrating more and more and way more, in fact, on the total income and total wealth.

So the point is, in this system, if you make it evolve ad infinitum, you will reach a situation which you have perfect proportionality in practice because everybody's at zero, and only one individual counts and does everything. So you will get to a situation which is perfectly proportional, but with a Gini index of 1, which is a hypothetical situation where you will never get because most of the people will have died before getting there.

And now this is pretty interesting. Generally speaking, there will be much to say about how the system can stand. I would only mention the fact that for a predecessor society, the simple fact that the rich were paying much more taxes than all the others was considered sufficient to believe that the system was actually acceptable because these were societies that did not understand themselves as egalitarian, meaning they were divided structurally in order.

So what was proper to different individuals was determined by the group to which they belonged. So it was not a society in which we expect that everybody has an equal treatment. No, not at all. And the fact that the rich were paying more was considered sufficient-- was basically sufficient in practice because the Republic of Venice was very stable. You don't find revolts in this context.

And also, the point is what happens at the bottom? What happens to the poor? The poor are losing more and more their actual direct ownership of economic resources, but they can't be left to starve. So at the same time, you have the intensification of charity. So something is trickling down from the top to the bottom.

But the point is, at the bottom of the socioeconomic pyramid, people are more and more dependent upon the goodwill of the top. And this is also kind of a problem, which will lead me to the final point I want to make before showing you this slide in which you have-- I told you about taxes.

But taxation was regressive in radical Venice. The fiscal expenditure, the fiscal distribution was not, so not going towards lowering inequality, basically, because the way-- I mean, most of the resources collected were used for war and for servicing public debt, which was itself built because of war. And whatever you can define as social expenditure was only a minimal part of the budget of the central states, as you can see here.

Now, I would like to conclude with some reflections on, again, the agency of the political and economic elite. And I will connect to this book, which I published recently, which is about the rich. And I touch upon some of the topics which are explored in the article, but looking more, actually, at human agency.

And last week I was discussing at the conference mobility, social mobility, which is another interesting aspect. And I was showing this picture. This is a group of senators from Venice from the 16th century, and they was calling them the enemies of mobility. And the point is, these were the enemies of mobility. And this is also the same people who were actually pushing inequality up.

So the point is, why did the political elite, which in the context of a patrician republic like Venice, but also the economic elite, why were they shaping in the long run the distribution in such a way that it favored inequality growth while also leading mobility to decline?

And by the way, a frequent justification in modern societies of high inequality is that if those societies are also very mobile, so it is easy to move from the bottom to the top because of one's skills, attitudes, or whatever, then inequality is more acceptable. And then there will be much debate there because we tend to overestimate the degree of mobility in many Western countries, beginning with the United States, in fact.

Anyway, the point is, these are the people which, as Ted mentioned, after the Black Death, when they realized that they risk-- their patrimony is being fragmented, the patrimony they want to-- intend to pass the standards, that when they realize that this new infection, which has come back to Europe to remain, and they see these plague waves happening one after the other, they are those which decide to use institutions like [INAUDIBLE] commission to make, in practice, their patrimony transmissible to a system similar to primogeniture, as Ted was mentioning.

And the point is, the same people, the same groups were also reacting to other challenges. For example, they were reacting to phases during which it was experienced, it was feared, that the economic opportunities were worsening by trying to strengthen their control over the local resources, the political resources, and also the economic resources.

I mentioned the senators of Venice. In fact, this is more relevant if you go and look at those people who were controlling the councils of the single communities, like the single cities and towns constituting the states.

And we see systematically, in South Europe, when the competition from Northern Europe with the so-called little divergence, so from the beginning of the 17th century when this competition intensifies, we see that those who used to control the local political council, the local government, the local political bodies, tried to make the right to have a seat there inevitable itself. So they tried to concentrate those resources because that has also an economic value.

These are also the same people who, in the context of much of South Europe and surely of Italy, at the beginning of the 17th century decide to switch their investments from trade and manufacture to land. And in that way also they favor politicalization because they tend to compete with the poorest strata on the land market. And it's them by land when the poor strata are experiencing difficulties, for example, during famines.

So this defensive strategies also favor economic inequality, and the same time they reduce mobility. I could tell you much more about this, but I am in the same situation as Ted was, meaning that I don't want to run out of time. And so I think I will stop here and thank you very much for having read the paper, if you read it, and for your attention. Thank you.

SPEAKER: Thank you very much. And we are opening the queue for questions and comments. So as Ruth said initially, please raise your hand if you would like to ask a question or make a comment. Ruth, do you want to get us started? Ruth, please.

RUTH MASON: Yeah. So thank you both very much. That was really, really interesting. And so I want to just throw out a bunch of questions, Guido, and you can just decide which pique your interest the most.

So the first was the issue that you just got to at the end, which is, I wanted to invite you to say a little bit more about why it's important to study the evidence that you and people working in your area have brought forward? That is, why should we care about economic inequality? Why is it bad? Whatever its relationship to growth, why is it an important research topic?

And then my other question was also about unit, but a little bit different from the one that Ted asked. So Ted asked whether Italy was representative. My question was, what's the right unit at which to study economic inequality? So if the harm of economic inequality is principally political, then should we be studying it at a political level? And we maybe then wouldn't care about cross-national comparisons of things like Gini coefficients.

And then if it is political, at what level do we care? Do we care about federal? Do we care about state? Do we care about the town level? If the problem is social or emotional, does that make a difference for at what level we study it?

And this question is in part inspired by work-- recent work by my colleague here at UVA, Andrew Hayashi, who's written about how our focus on income inequality, national income inequality in the United States, may have led us to adopt policies that decrease national income inequality, but at the price of increasing local inequality. And one example he gives is student loan forgiveness. Sorry, students.

And he starts his paper with a really arresting example of Caesar passing an Alpine village, a poor Alpine village. And his companion said, is it possible that here too, in this poor village, that men are striving and their ambitions are clashing and that there's intrigue there as well? And the reputed response from Caesar is that he would rather be first in the Alpine village, then second in Rome.

Which, by the way, is the exact opposite of what I would expect in terms of the desire about the society you'd want to live in. That is, I'd rather be a median wealth or income person in a high Gini but rich society than the median in a low Gini subsistence society. So which Ginis matter, global, which country, which levels, federal, state, is it your high school class Gini coefficient that matters, where does it count, and why?

And then was struck in your paper when you said that the early United States had a low extraction ratio. And because, at the same time-- this was the Revolutionary period-- there was slavery. Or I asked ChatGPT after I read your paper, what are some countries that have low Gini coefficients?

And one of them was Switzerland, but women got the right to vote in Switzerland in 1970, and that was at a time when they could see that women could vote in other countries. And so they could-- it must have stung. And so I wonder, what can Ginis tell us? What can't they tell us? Are there measures that are more robust when it comes to well-being than income or wealth inequality?

And then lastly, since you work in demography, I wondered if you would-- I just wanted to invite you to speculate as to future trends. So if the expected population, dramatic population declines come in the wealthy countries, what's going to happen? So we might expect labor to be more valuable.

But, at the same time, if there are fewer and fewer people to inherit these large masses of income, maybe that would be pro inequality. So those are the questions. Answer as many or as few as you like.

SPEAKER: Guido, please. Yes.

GUIDO ALFANI: Thank you. So I answer immediately without waiting for other questions. No, thank you very much. These are all very, very interesting and very important questions.

Now, let me answer in order. So first, why study this evidence? Well, beyond the fact it is interesting from a historical point of view, but that's not your question. I think that the evidence for an apparently remote past speaks very directly to our current concerns.

The debate that Ted was mentioning was discussing the one about the impact of-- I mean, the relationship between inequality growth and economic growth is actually extremely important for today debates and concerns. And the way in which you can address the debate is looking at historical data.

And this is what [INAUDIBLE] did himself in his article in 1955. It was relied on a bit of information about different European polities in the 19th century. And he was saying, this is mostly speculation, potentially tainted by wishful thinking. And that's led to more research in the historical data to see whether it was right for the 19th and the 20th century.

But then if you go before that, you realize that this tendency are much more long run. And then, looking at today from this longer run perspective changes actually very much our understanding of what's happening now. And the same is true-- and this is kind of more the topic of my book, the other work he was mentioning. If you look, for example, at things like the role played by the richest part of society in society as a whole.

So we can understand better the situation we experience today if we look at what was happening centuries ago, because some problems, we discover, they weren't new. The concerns about, for example, how much high wealth concentration can lead few individuals to have a potentially very strong control over political dynamics in their countries, it's a concept that already Aristotle had in the Republic. And then it was there in 14th century Europe, and it was there in early 20th century United States with the debate on the money trust and so forth and so on.

So these things are not new, and simply understanding that they are not new helps us somehow to address properly our current concerns. And I could go on and on about this point, but I won't.

Why we care about inequality? Well, we do care about inequality almost automatically. The moment we no longer believe, it is simply a side effect of something good.

So if you can abandon the idea, we should actually, based on the data, abandon the idea that high inequality, inequality growth is simply a side effect of something good, which is economic growth, then inequality becomes more of a concern. If we can abandon the idea that high inequality goes hand-in-hand with high mobility, then we can have a concern.

Or if we go as far as arguing, as I did earlier, that at least in certain contexts, high inequality and declining mobility go together, and pretty much for the same reason, because you have the Aristocratic nation, if you want, of the wealthy elites, and a strategy, which is aimed at protecting those who belong to the elite from threats from those who might have other privileges and so forth and so on, then we look at a certain model, current developments in a different way.

Now, about the United States. Yes, I understand very well your concern. Of course, the inequality extraction ratio is a technical definition. It's simply the ratio between the maximum between the inequality observed and the maximum possible inequality you can have in the society if you give to everybody subsistence and all the extra subsistence to one single individual.

So this doesn't allow you easily, or at least not automatically, to look at other dimensions of inequality within society. It's simply a matter of redistribution, distribution of income.

And slavery is also complicated to address from the point of view of the measure of income and wealth and wealth inequality. And there is a very nice book by my colleagues, Peter Lindert and Jeff Williamson on the United States from pre-Revolution period till today basically. It's called Unequal Gains. And they also address the issue of slavery from this specific perspective.

But slavery, of course, is only, in this context, one particularly important example of a more general concern, which is, beyond what-- I mean, the little that a Gini index or a number can tell us, we have to consider what's happening behind the scenes, which, many of those who work on this kind of topics historically also try to do. Then one might focus on a certain aspect or another depending on the context.

And of course, this specific article was aimed at a journal in economics. So it was looking more at the data and at the measure than at this more sociological slash social historical aspects.

Finally demography. Now, it's, of course, a very important concern. I would say that, almost automatically, if you take the case of societies in which the population is shrinking, looking at the so-called natural change, so simple difference between births and deaths, the population in which the total fertility rate is below two per woman, you will have wealth concentration among the descendants.

And if in the same society you have the population is stable or even growing, but only because of immigration from poorer countries, you will have a growing divide between a group of people who descend from the original population who inherit more and more, the mergers of patrimonies across generations.

In the case of Italy, where we have this cultural thing about having-- about the owning the house where you live. This means that the generation of long children, to which I belong-- I am a lone child and my wife is as well-- we, on principle, will inherit real estate from two sides. And all the immigrants to my country or to your country, those who get to the new country without anything will be, by construction, at a further and further level from the descendants of the original population.

So in this context, surely the demographic dynamics will tend to push inequality up in the future by themselves. And of course, the net result depends on a bunch of other factors. But demography by itself, in the context of a rich country in which the population experiences less than two children per couple will tend, I would say, automatically, to push inequality up.

SPEAKER: Thank you. Ted, would you like to come in here to comment on these questions or on the responses? Don't feel obliged. Just want to give you the floor.

THEODORE P. SETO: No, I just wanted to mention that Guido's response of the relationship of labor mobility to the problem is really very interesting-- not really addressed in the paper, but it opens up an entirely new avenue for research and thought. The fact that, for example, the European Union now has labor mobility ought to, if Guido is right, ought to produce increases in economic inequality inevitably merely by reason of the fact that people are now free to move when they're poor to someplace that's richer.

AUDIENCE: Thank you. So I actually wanted to touch upon a similar question and to ask you to talk a little bit more about mobility. And you did mention social mobility as an option. So one question is, do we actually know, or what do we actually know about social mobility within these periods, if at all that exists?

But more so, I wanted to ask you about geographical mobility, which links me to Ruth's point about the relevant unit. Because if-- and Ruth hinted at that in her response-- in her question, sorry-- if the reason we care about inequality is political, that is that inequality is an issue within political communities rather than, for example, across borders, then should we really look at the data from a global perspective at all? What does it mean for us now that capital has been moving across national borders for ages now.

But I think Ted is exactly right that the trend now is people's mobility and not just with the poor. We're seeing an increased people's mobility on the high end of society. And we're seeing the top, definitely the top 1%, but think even more than that actually making themself able to enjoy the multiplicity of jurisdictions across the world and really going beyond the state.

So I guess my question to you is whether you might be interested in saying a bit more about the effects of such mobility in the times of your research, but also going forward, can we learn something from history about that? Or are we saying, because we've studied specific countries in a specific era when mobility was a little bit limited, geographical mobility was limited, then there's no way of knowing what it might yield in the future and now that we're going across political communities?

The other point I wanted to make is, Ted was making this comment half jokingly saying, we may want to have a major war or a pandemics to resolve inequality. But actually, I want to try and connect this half-joking comment to your intuition about human capacity.

And I think, because the political systems are very much entrenched within their current powers, and because we know that that's so often the haves also have not only economic power but also political power. And in fact, you may argue that the state entrenches such power.

Then many a times, the attempt of political communities to change this rule of nature and to say, wait a second, if inequality is something inherent in the market, really, then we should have mitigating mechanisms. But it's very hard to do when people are trying to focus on predistribution, when there are, in fact, playing the game, knowing what they have without any sort of veil of ignorance or a one step removed from the game itself.

And so I wonder whether major wars or pandemics remind us of making us all a bit humble and allowing us to pierce through the veil of ignorance and to say, wait a second, I'm not necessarily of ownership of the things that I think I have. Life is a lot more vulnerable. We may want to think of the whole system in a new light.

And these moments in history are the ones that are actually allowing us to redesign the system and to reset the building blocks so as in a predistribution way would allow to a lot more opportunities for the people who are playing this market game to restart their operation. So that's for me again. Feel free to either address or not, your call. Guido?

GUIDO ALFANI: Yeah, no, thank you. So social mobility, well, we now know something about that for the pre-industrial period because that-- I've been trying to measure it for at least a few areas of Europe was the object of my second project, funded by the European Research Council. So most of that research is still unpublished. We are working on the publications.

But we measured for at least a few areas these using similar archival information as that which we have to use for inequality. But this basically means you have to link in time the households and individuals to see whether they move up and to which portion of the society they belong.

So what's the general picture we get? Well, we get something very clear about the Black Death. There is only one region in Europe for which you can really study mobility after Black Death in this way, and that's Tuscany, because otherwise you will not have the sources. And you see this boost to socioeconomic mobility.

So the Black Death opens positions within the society, and somebody is able to use those holes to clean up, basically. And this lasts for two generations, two generations and a half, and then you have this movement back to normal.

Point is-- and this kind of matches what we discussed about inequality in this period. After the Black Death, in the same way as major plagues are no longer able to reduce inequality, they're also no longer able to really boost social mobility, and for pretty much the same reasons, because the richest families had learned how to protect themselves from the unwanted distributive consequences of the fragmentation of patrimonies triggered by these mortality crises.

And the other interesting thing is that from the early modern period, we see mobility declining and a growing divide between Northern and Southern Europe. And we can, in the South of Europe, really study this looking at what people do as also as a consequence of the progressive entrenchment of those who have some access to resources to say, OK, the future is not looking good. What we will do is to try and ensure that the little which we can count upon will remain in our hands.

And this, again, requires also gaining control over public resources like the common goods owned by communities. How do you do that? Well, you learn how to control the local councils. And you do that by changing the rules and establishing that only the members of families which were already enjoying a seat in the council will be eligible to the council in the future. That's what happens across the board at the beginning of the 17th century.

Now, is this a political process? Sure it is. But it's not only-- this doesn't mean that we are concerned about inequality only for political reasons. Because the point is, do these dynamics also change the opportunities for long-term economic development? Unfortunately, they do.

So the point is, in the context of the divergence between a growing Northern Europe and a stagnating Southern Europe, this growing divide in mobility also in roots that divide in levels of economic development because it becomes more difficult to exploit ideas to have-- to exploit one's good attitudes, behaviors, whatever. You don't have any space at all.

And the other point is this. When we observe, even in the context of a growing economy, that wealth dynasties become established, who also have some control over political resources, we systematically observe-- and, again, this happens, say, in the Dutch Republic at the end of the 17th century or in the United States at the end of the Gilded Age.

We observe that there is a tendency for the wealthy elite to aristocratize, to have the building up of wealth aristocracies. And wealth aristocracies are protective of the privileges. They are basically defined by their privileges. And you can't share a privilege too widely, otherwise it will become no privilege at all. And we observe this happening repeatedly in history.

And then the suspicion is-- and this is something that we will need to study better-- that those processes which come in parallel to phases of very dynamic economic growth. But those processes or the establishment of wealth dynasties and the aristocratization of this wealth elite brings to an end the phases of quick economic growth.

So that's a suspicion. That's something that also we might want to think about closely, because there are today concerns about what somebody referred to as the development of a global economic elite.

Now, finally, about mortality crisis. Yes, they definitely are phases during which people can think about the institutional framework, if you want, and then they can become moments of change, because it's also possible that a consensus develops towards that change.

I could make tons of historical examples, but closer to us is the phase of the World Wars, when we have the political problem that, especially beginning with World War I, that if you have to convince the lower strata to go and fight in the trenches, you also have to give them something back. And what you give them is the right to vote, progressive taxation, These things go hand in hand.

Then the problem becomes, did the most recent crisis have the same consequences, and including the recent COVID-19 pandemic? Well, in some respects, yes. For example, in the European continent, COVID-19 allowed for the build-up of a consensus towards doing something in common, raising some common debt to help the area struck worst by the pandemic to set up a recovery plan. And this wouldn't have been possible before.

But from another point of view, we see that the way in which Western societies are organized, the way in which, for example, they decide to collect resources from the citizens through taxation haven't changed. I checked these surveys of fiscal reforms in OECD countries.

And you find very few examples during all the most recent crisis of countries that tried to do even to introduce even very limited attempts at making the certain strata, and particularly the more affluent, pay more for the bill of the crisis.

But that had happened instead across the centuries from the Middle Ages. Because although in normal years the fiscal systems were regressive, in times of that crisis, it was understood that the state could go to the richest people and ask them loans, force them to provide loans if they weren't willing, and tax them specifically, and so forth and so on. And this happens across the centuries from the late Middle Ages until the World Wars period. But this hasn't happened during the most recent crisis.

So I would say, to really reach a conclusion in this answer that, yes, major crises provide an opportunity of change, make people think about how their societies and their institutions, structures and institutions work. But that possibility does not necessarily result into change itself. So there are windows of opportunity. Whether you take the opportunity or not depends on the overall context.

SPEAKER: Thank you. Ted, do you want to come in here? OK, Shreya, please.

AUDIENCE: Thanks, [INAUDIBLE]. And thanks, Guido. Absolutely fascinating paper. I was riveted throughout the paper and throughout the discussion today, so thank you for that. Although I should also say that as a tax lawyer, it left me in a little bit of an existential crisis, and my questions to you are about that.

So the first question-- and there's a couple of things that you mentioned that I really latched on to. So first, you talk about how the reduction in economic inequality historically has tended to happen primarily because of some form of catastrophe, so either a war or a pandemic or one of those things. And I think you also cite Walter Scheidel, who's also done a similar analysis and who also comes to similar conclusions.

And so-- and you also say a second thing, which is that historically, when the state has been strong, there has actually been increased economic inequality. I think that's one of the conclusions that you come to in one of the portions of your paper as well.

And so that leads me to ask that, what really is the role of taxation over here? So if catastrophes are the only thing that reduces inequality, and if a strong state, which is a precondition for taxation, is actually increasing inequality, then are there any situations where taxation can actually work to reduce inequality? So that's the first question.

The second question-- and this is related to the first question, and you bring it up as well-- in relation to how historically there were periods where taxation was regressive. And when you say regressive, you say it is because the mid-level tier were paying more than the wealthiest.

And the question that I had when I saw that is are there ever any situations where taxation is truly progressive? Because the folks who are the wealthiest always have a better ability to plan. And even today, there is evidence that shows that the wealthiest don't actually pay their fair share of tax. So is there really evidence of systems where progressive taxation has truly been progressive? And if yes, what are the kinds of systems that have achieved that kind of progressivity?

And the third question that I had, or rather a comment, and this was something that I was thinking about when I saw the England curve that you had put up. Because some of the countries that you deal with, and particularly between the 15th to 19th century period, there was, of course, a history of colonialism around the world.

And some of the countries that you refer to were more active as colonial empires in comparison to others. And these colonial empires did benefit hugely from a one-way transfer of wealth from the Global South. So did that have any impact on inequality within these particular countries as compared to others? So those were the three questions.

GUIDO ALFANI: Yeah, thank you very much. They are all very interesting questions.

Now, regarding the first, it's true. I mean, I would say that a strong state has a stronger capacity to impact the distribution, to shape the distribution across its subjects.

Then in the long run of history, this has gone usually in the direction of producing more inequality, but not across history-- total history. Because in the-- from at some point in the 19th century, we have the beginning of the turn from overall regressive fiscal system to overall progressive fiscal systems.

The moment when the net results are progressive is not clear because nobody has tried to measure it in this way and to find the actual period during which [INAUDIBLE], in any state, I couldn't think of one example, but the actual moment when overall the system starts becoming mildly progressive and then more strongly progressive.

But in that phase, you have the strong states can produce more inequality reduction. So the point is, the ability of the state to tax can serve different objectives, and those objectives are determined by human agency in the end. So it's the people who are entitled to decide how to proceed with taxation that in the end will shape institutional framework in such a way which makes the fiscal system progressive or regressive.

So it's not-- the strength of the state does not necessarily go hand in hand with inequality growth, and the history of the 20th century shows this very clearly. And so it's also the first part of the 20th century when you really find in Western countries examples of fiscal systems which were clearly strongly progressive.

From World War I, you have the personal income tax becomes the main instrument of direct taxation. It's, by design, from the very beginning progressive. It becomes a universal tax, and it plays its important role.

You have also the spread of progressive taxation on the largest patrimonies. You have also big time the spread of progressive taxation on inheritances, And together these contribute a lot to bringing inequality down.

So even in the World Wars period, it's not only a matter of catastrophes or destruction of physical capital or financial capital, there is also this fiscal side, which is, of course, connected to political developments. And this is also why, after the end of World War II, you continue to find inequality reduction.

And then it's from the early 1980s that you observe the also kind of a change in preferences among the voters. Because, at some point, in the 1960s, everybody was in favor of progressive taxation. That was the idea. And also almost everybody was in favor of the state intermediating a large part of the economy. And then preferences changed. But if you want an example of a moment when really taxation was progressive, that was clearly the moment.

Regarding colonial empires, this is something that is-- I mean, there are two aspects to this. Something that I'm growing more and more interested in is how empires produce relatively high inequality within themselves, so between the different components of the empire itself.

When we look at the data for England, which refer only to England itself, to mainland England, then the problem you ask is whether that part of the British Empire, so only England, the mainland, experiences not only maybe the gains of colonialism.

So it becomes on average wealthier, which I think is highly probable, although not all economic historians would agree, but also whether it feeds inequality growth because some components of population will be better able to exploit the colonies, the rest of the empire.

I think this is the case. But the problem is the data-- I mean, the work I did on my own on England is from the earlier period, so from 1290 to 1525. And when you move into the other measures which I showed you, these are basically coming from social tables built by Peter Lindert based on probate records and other information.

And the point is, that approach does not give us the flexibility that we would need and the kind of more granular information we would need to observe whether in some parts of England, for example, in the main hubs of the city, those which were more directly connected to the rest of the empire, some specific groups were enjoying big-time the benefits of expropriation, benefits of empire.

So on principle, that should be possible. Based on the studies we have right now, this can be done. But it's a very interesting question and hopefully somebody will look into that. And I think you are correct. I mean, this is something that probably creates inequality across the empire as a whole. And I'm looking at some ancient empires in this way.

But it's also creating inequality within the specific-- the single areas of the empire because imperial policies were almost by definition inegalitarian. So they were aimed at favoring some groups over others.

Maybe this is a-- I mean, I would make this as a very strong statement, and then I'm sure that some colleague might challenge this for specific areas. But generally speaking, I think this is a feature that empires tend to have across history, basically.

AUDIENCE: Thank you.

SPEAKER: Thank you very much. Just it may me interesting, our next guest on the series is Professor Ron Harris, who studied the colonial UK system from the corporate perspective. So it may be interesting to try and ask him the same question. I wonder if he'll have some information for us on that.

So if I think we're about time. So if there are no other questions or comments, please join me in warmly thanking Guido, Fanny, and Theodore Seto for this fascinating, fascinating exchange or dialogue, as we'd like to call it. And thank you all for joining us. Thank you.

GUIDO ALFANI: Thanks a lot. It has been great talking to you all. Thank you.

SPEAKER: Lovely having you.