As he lay dying from the Spanish flu in 1920, Max Weber was preoccupied with the specter of communism. From Mexico to Russia, the whole world seemed to be in the grips of revolutionary fervor. In his own native Germany, Marxists had nearly occupied Berlin in an armed uprising. Even Munich, where the father of modern sociology finally succumbed to the pandemic, was briefly governed by a workers’ council.
Weber rejected the left’s call to establish a society of shared prosperity through redistribution. In his magnum opus Protestant Ethics and the Spirit of Capitalism, he argued that a country’s economic success was a byproduct of culture: northern Europe was wealthy because Calvinists believed that vocational success was a sign of divine blessing. This chief driver of prosperity – moralization of labor – could not be spontaneously forged by simply conferring resources to the disenfranchised. Therefore, efforts to generate affluence through redistribution were futile at best, destructive at worst.
But Weber’s reading of history was wrong. Protestant societies did not become richer on the merit of their values – they were more affluent because wealth redistribution on a revolutionary scale had accompanied their religious conversion in the 16th century. And throughout history, other societies that embraced egalitarianism have enjoyed similar economic dividends.
As governments today look warily at the prospect of increasing civil discontent amidst growing economic insecurity, they must discard the long-standing belief that redistribution will eventually lead to degradations in the quality of life and embrace egalitarian solutions to persistent socio-economic challenges.
Consider England. The Reformation here meant more than reading the bible in English. Its material impact underwrote the country’s unprecedented economic rise.
Economic historians have long debated why an island on the edge of the European continent achieved industrialization before other nations. Scholars like Robert Allen identified the high cost of human labor in England as the principal impetus for mechanization. Douglas North and Barry Weingast saw the government’s commitment to property rights as the foundation of increased capital investments. Other hypotheses placed a spotlight on the availability of cheap fuel (coal).
But these factors all rely on the abundance of actors who had access to economic resources and could take advantage of these various endowments. These were not conditions that existed in feudal England or elsewhere in medieval Europe where society’s resources were perpetually held in the hands of a small and privileged class.
In 1436, the common people of England held less than half of the cultivated land in the country. Independent peasants controlled about one-fifth of the farmland while knights owned about a quarter. The remaining property was controlled by the upper nobility and the church – a tiny fraction of the total population.
This unequal distribution of wealth left little room for the vast majority of working people to improve their lives or meaningfully participate in the economy. Surveys from medieval England showed that even peasant households with land owned so little that they achieved subsistence only by supplementing their harvest with wages from other work. Moreover, the growing practice of “enclosures” increasingly restricted people’s access to communal properties that helped complement their meager income.
King Henry VIII’s break with the Catholic church in 1534 became the inadvertent catalyst for change. Between 1536 and 1540, parliament transferred the ownership of all 825 monasteries and their lands in England and Wales to the Crown. Desperate to generate cash for the royal treasury, the Tudor monarchy made one-third of the expropriated land available for purchase on the market. The resulting redistribution was the economic legacy of the Reformation in England.
The shift in land ownership over the next century was extraordinary. While the share of the agricultural land held by the upper aristocracy did not change between 1436 and 1688, the portion of total cultivated land owned by knights and middling social classes grew from 25 percent to somewhere between 45 and 50 percent. Simultaneously, free peasants were also able to increase their landholdings from 20 percent to somewhere between 25 and 33 percent. England still remained a highly unequal society and enclosures continued to constrict public access to common resources, making life difficult for landless peasants. Nonetheless, the dissolution of ecclesiastical properties produced a more inclusive economy than what would have existed otherwise.
A wider share of society having access to land corresponded with growth in agricultural output. Estimates suggest that between 1500 and 1700, the yield of wheat per acre increased from 14 bushels to 19. The surplus allowed people to shift resources to industrial production. Reflecting the rise of manufacturing during this time period, nearly half of the English labor force worked outside agriculture by 1700. These were the early stages of the Industrial Revolution.
Contrary to Weber’s view, the tenets of Protestantism that Tudor England adopted was incidental to the creation of new wealth. It was the breakup of ecclesiastical property that preceded growth. Notably, Catholic countries that challenged traditional socio-economic privileges experienced similar transformations.
Traveling through France in the late 18th century, English agriculturalist Arthur Young described the country’s rural economy as a “miserable system.” 23 million farmers – about 80 percent of the total population – toiled in the field. A significant share of these workers were tenant farmers who relied on their landlords for seed and cattle, leaving them constantly indebted with little resources to escape poverty. Just as in England before the Reformation, even paysans who had their own land often possessed so little that they barely eked out a living as subsistence farmers.
There were other burdens that the French peasantry assumed as a subservient class. The local aristocracy had the right to collect payments for people crossing rivers, digging wells, selling goods, and other activities vital to commerce. These feudal obligations acted as further barriers to growth.
The privileges of the largest landowning class per capita in the country – the Roman Catholic Church – exemplified the rampant inequality in the country. The institution held 6.5 percent of the total cultivated land, but paid no taxes and collected a tithe from the general population.
Then in 1789, representatives of the working class and the bourgeoisie took control of the state. One of their first actions was to expropriate all land owned by the church. As the Revolution wore on, a significant share of the property owned by the former nobility was also expropriated and redistributed. In French Flanders, the share of land held by the clergy and nobility decreased from 42 percent in 1788 to 12 percent in 1802. Concurrently, peasant share of the land grew from 30 percent to 42.
As was the case in England, the redistribution was done through an auction, thus excluding the poorest members of society from the process. Despite the revolutionary government’s failure to live up to its egalitarian ideals, research by economists Theresa Finley, Raphaël Franck, and Noel D. Johnson showed that regions of the country that experienced greater redistribution of church property enjoyed greater agricultural output and investments over the next half-century.
Building on this economic foundation, France too experienced rapid industrialization in the 19th century. What made France different from other countries that did not achieve intensive economic growth during this period was not creed but politics.
Far from handicapping economic growth, as many modern free market doctrinaires claim, redistribution helped lift Western Europe from a subsistence economy.
This was not a uniquely European phenomenon. The current economic engine of the world, East Asia, perhaps best exemplified the triumph of egalitarianism.
The region hosted the newest adherents of Weber’s thesis. This time, however, the focus was not on Protestantism but on Confucianism. Former Singaporean Prime Minister Lee Kwan Yew provided the most well-known endorsement of this view:
“Confucian societies believe that the individual exists in the context of the family, extended family, friends, and wider society, and that the government cannot and should not take over the role of the family… [a country] depends on the strength and influence of the family to keep society orderly and maintain a culture of thrift, hard work, filial piety, and respect for elders and for scholarship and for learning… These values make for a productive people and help economic growth.”
It was a twist on the Weberian worldview, but an outlook that still emphasized the supremacy of culture in determining a country’s economic success. Lee’s message also implied that economic misfortune could be attributed to moral failure at an individual or familial level – diverting attention from potential structural barriers to a person’s fulfilment of their vocational aspirations.
And yet, Lee left a key question unanswered. Why were Confucian societies like Korea so poor in pre-modern times? Again, case studies show that redistribution – not culture – acted as a precursor for prosperity.
At the end of Japanese colonial rule in 1945, Korea was a highly unequal agrarian society. The richest 2.7 percent of rural households owned two-thirds of all cultivated lands while over half of the population owned no land at all.
During their brief governance of the country between 1945 and 1948, U.S. military authorities distributed about 240,000 hectares of land that was previously owned by Japanese interests. But this only represented approximately one-tenth of the arable land. Further efforts to redistribute the means of production ran into opposition, particularly from South Korean President Syngman Rhee who saw landowners as a staunchly anti-communist constituency who would support his efforts to repress leftists who challenged his authoritarian administration.
The Korean War changed this political calculation. After being driven from the capital twice by communist forces, Rhee’s government woke up to the realization that rural poverty fostered domestic sympathies for the rival regime in Pyongyang.
This national security imperative rallied political support behind a substantial and earnest redistribution of resources. The government restricted land ownership to three hectares and 330,000 hectares of farmland was reallocated to previously landless farmers. Furthermore, landlords directly sold 500,000 hectares to their tenants by 1952. In total, 52 percent of total cultivated land changed hands, reducing the tenancy from 49 percent of farming households to 7 percent.
The scope of the redistribution in Korea was far larger than what had occurred in Tudor England or Revolutionary France. Consequently, the economic impact was also felt more immediately. Annual agricultural yields rose from 3 tons/hectare in the mid-1950s to 5.3 by the 1970s. The resulting increase in rural income allowed families to invest in education – creating the workforce that staffed the enterprises that spearheaded the explosive industrialization of South Korea. The new wealth also formed the basis for domestic savings that financed the acquisition of machinery and technology that pushed industries to compete in more valuable sectors of the global economy.
South Korea’s economic breakout validated the transformative potential of redistribution. And it was not alone: Japan and Taiwan also pursued this path to prosperity.
The opposite was true in countries where land redistribution did not take place.
As a share of the population, the Hungarian aristocracy in the 19th century was the smallest in Europe. Nonetheless, a quarter of all arable land in the country belonged to these approximately 600 families. The imperial government in Vienna safeguarded these hereditary privileges and ensured their continued socio-economic dominance. In a time of burgeoning nationalist sentiments, the Austrian Habsburg dynasty saw the Hungarian nobility as a counterweight to the people’s demands for an independent Hungarian nation-state.
When the Esterhazy family – one of the country’s largest landowners – faced imminent insolvency in the 1860s, Emperor Franz-Joseph personally intervened to shield their assets from creditors. When the import of cheap American cereal imperiled the Hungarian nobility’s dominance in the domestic flour market, the imperial government levied tariffs to protect their market share. Taxes on imported wheat increased by 429 percent between 1882 and 1906.
These measures led to the continued monopoly of land by the aristocracy. The result was the exact opposite of what had occurred in England, France, and South Korea. Investment in land improvements stagnated. By the start of the 20th century, Hungary’s per hectare wheat yield was below that of Romania and nearly one-third of Denmark’s.
This backwardness in the agricultural sector also affected the country’s industrialization. As late as 1906, only 12 percent of the mills in the country had adopted steampower. Economic historian John Komlos described Hungary on the eve of the First World War as “essentially an agricultural country in which the primary sector still employed two-thirds of the labor force and produced the same share of the national product.”
Guatemala is a more recent example. In 1950, approximately 2 percent of the population controlled 72 percent of the country’s arable land while 88 percent held a mere 14 percent. With two-thirds of the population working in the agricultural sector, the gross inequality made it nearly impossible for people to break the cycle of poverty. Moreover, the resources were ineffectively used – while the vast majority of rural families lived in poverty, less than 12 percent of the total privately-held land was cultivated.
To address this misallocation, Guatemalan President Jacobo Arbenz Guzman introduced measures in 1952 to split over 600,000 hectares of land among 100,000 families. There are critics today who point out that these reforms extended less benefits to farmers of Maya descent and their communities. But economic historians are in no position to analyze the long-term impact of land reform in Guatemala because Arbenz was accused of harboring communist sympathies and a U.S.-backed coup d’etat removed him from power in 1954. Much of the redistribution was reversed thereafter.
The World Bank today describes Guatemala as having “some of the worst poverty, malnutrition, and maternal-child mortality rates in the region, especially in rural and indigenous areas.” The poverty rate is estimated to be somewhere between 50 and 60 percent. Almost half of Guatemalan children under the age of 5 suffer from malnutrition and 23 percent from severe malnutrition. With a population that is fighting to put food on the table and very few gainful employment opportunities, the rate of reported extortion by criminals is 43 per 100,000 inhabitants. In this environment, it is not surprising that many people are choosing to take refuge in the United States.
Both Hungary and Guatemala happen to be predominantly Catholic countries. However, the inequality that held back economic development was not rooted in their faith. The failure to redistribute resources was strictly a political blunder.
There are many ways to ensure equitable access to a society’s economic resources. While this was accomplished through the distribution of private property in England, France, and South Korea, this is not the only path to building an inclusive economy.
In fact, there are many cases where blind privatization created a more exclusive economy, concentrating resources in the hands of a privileged few. In El Salvador, land reforms in the late 19th century harmed the livelihood of many rural workers because it expropriated land that was utilized collectively by local communities. Moreover, the government allowed the newly privatized plots to be acquired by a handful of oligarchs who consolidated them into large coffee plantations. This dispossession prevented agricultural communities from meaningfully participating in the economy, ensuring that these “reforms” would not deliver improvements to the people’s general standard of living. Similarly, the central government’s forced privatization of shared resources catalyzed Emiliano Zapata’s insurrection during the Mexican Revolution.
These cases show how redistribution is less effective when it does not consider the local context. Accordingly, Joe Studwell points out in his examination of successful (South Korea and Taiwan) and unsuccessful (Philippines and Indonesia) cases of land reforms in East Asia that the most successful cases of redistribution were ones that relied more heavily on community participation. Conversely, he observed that redistribution invariably failed when people in positions of privilege were allowed to dictate the process.
Today, there is renewed support for redistributive policies. Notably, the U.S. Democratic Party has placed a spotlight on inequality in its ongoing contest to select a nominee for the 2020 presidential election. Proposals for more equitable access to public services and restraints on corporate power have entered the political discourse.
This is a unique moment because political leaders are putting forward policies that consciously aim to enhance the wellbeing of all citizens. In Tudor England, the economic rewards of the Reformation were the unintended consequences of the monarchy’s attempt to fill its treasury. In Revolutionary France, the republican government was attacking institutions that had legitimized the Ancien Regime.
In these cases, the most vulnerable members of society often bore the cost of these transformations because welfare had not been the states’ principal aim. For instance, King Henry VIII’s land grab led to the closure of hospitals that were funded by monastic orders – these had been the only humanitarian institutions in medieval England that provided medical care for the poor. In addition, a steady erosion of common lands accompanied the expansion of private property, which disproportionately affected poorer farmers. Similarly, the redistribution of land via auctions in revolutionary France privileged farmers with more means, exacerbating inequality in some parts of the country. If societies do engage in redistributive policies today, their efforts must be more conscious about dislocations.
Furthermore, policymakers must make a clear effort to deliver real improvements to people’s lives – and the measure of these gains cannot be limited to traditional indices like industrial output. In pre-modern England and France, increased land productivity resulting from the breakup of ecclesiastical land helped many people escape from the drudgery of subsistence farming. In South Korea’s case, the astonishing rate of industrialization pushed the average life span up from around 41 at the end of the Korean War in 1953 to 83 in 2020. But unmitigated Gross Domestic Product growth in the United States since the 2008 financial crash has not translated into improvements in the quality of life – in fact, life expectancy has been in decline for three successive years. This shows that economic growth does not automatically yield tangible changes in the lives of people. Redistributive policies today must look to affect a wider set of conditions, including health, education, and leisure.
There are still many detractors who repeat Max Weber’s dictum that redistributive policies cannot improve economic conditions. They emphatically argue that individuals succeed and fail based on their moral outlook. As evidence, they point to Venezuela and the Soviet Union, claiming that greater public investments in housing and healthcare are slippery slopes to privation.
Yet history says otherwise. In Tudor England, revolutionary France, and post-war Korea, political decisions that widened people’s access to productive resources fostered shared prosperity. These and other historical cases ought to be more forthrightly presented to spotlight the economic merits of a more equal society.
Because, in Weber’s own dying words, the truth is the truth.
