 I'm Mike Lash, Chair of the Economics Department. Welcome to the first annual Samuel Bowles Lecture of the UMass Amherst Department of Economics. We had a named lecture. It's important to introduce the lecture and then to introduce the lecturer. In this case, the task was made easier because this year, the lecturer and the lecturer have the same name. In addition to supporting the department, the Samuel Bowles Lecture is made possible in part by a generous anonymous donation, to which the department is very grateful. I would like to thank Departmental Administrator Sheila Gilroy for her exceptional work in organizing this event, and the political economy research institute and its administrator, Judy Fogg, for hosting the event. There will be a reception in the Gordon Hall atrium immediately after the lecture. The purpose of the Samuel Bowles Lecture is to highlight work by faculty and graduates of the economics department. It's hard to imagine a better place to start than it was our inaugural speaker. I have some props. At the edge of Camelot, an intellectual history of our department by my colleague Donald Katzner and published by Oxford University Press tells the story of the early years of the modern department, starting about 1973 through the early 80s. Sam is at the center of the story. Sam was a prolific member of the junior faculty at the Harvard University Department of Economics. He was radicalized by the civil rights movement and the US War in Vietnam, key events in post-war America that exposed grotesque injustices within our country and between countries. Sam and other young economists brought forward what they saw as the central issues of our times and examined them through varied and rigorous methods. When Sam came up for tenure, Harvard Economics was in the midst of a bitter fight. And what can only be described as a purge, Sam was denied tenure. He took refuge in the wilds of Western Massachusetts at the University of Massachusetts Amherst. He negotiated a space and attracted an extraordinary cohort to the department, including Herb Gintis, the late Stephen Resnick, Richard Wolff, Rick Edwards, Jim Crotty, and soon Nancy Fulbright and a second generation of political economists not afraid to question everything. The purge had consequences. Happy, for UMass, where almost every one of us in the department can trace our presence to Sam's homesteading. Unfortunate for Harvard, where the mistakes keep adding up or not. More serious for the discipline, which was then more serious for our discipline, which was then at the onset of a transition to a dangerous monoculture and calamitous for the broader world, which desperately needs broader economic thinking. As needed, Sam went outside economics, publishing in science, nature, behavioral, and brain science, and exchanging ideas of neuropsychologists, physicists, and anthropologists. But Sam carefully maintained ties with the world of orthodox economics. Even in that world of crazy, trapped in the throes of rational expectations, efficient markets that just look the other way as bubbles grew and popped, dynamics stochastic generally, Bolivia. Sam identified and corresponded with thoughtful members of the mainstream. He ensured the infusion of new ideas at UMass. His writings and his students had profound effects on open-minded mainstream participants, such as Pranab Vardhan and the noblest George Akerlof and Joseph Stiglitz. Sam also influenced students here and elsewhere. Adrift in my junior year of college when I realized that my development economics course would not, contrary to my hopes and expectations, focus primarily on the relative merits of Cuban or Chinese land reform, wasn't clear to me that I would stay in economics. I feel that seemed to offer a little of relevance other than tickets to Wall Street for my classmates. But my mom gave me, after the wasteland, for Hanukkah or Christmas, or maybe my birthday that year, I was introduced to social structures of accumulation as a way of thinking about economy and society. The book clearly demonstrated that there was an alternative, and my passion was renewed. So thank you. I can also thank you. It's not only my career. It's also my family that I owe to Sam, my wife's parents, who are radical educators, both, accepted me only because I was a schooling and capitalist America type economist, not the other kind. We guard our relationship with Sam jealously. Since he became professor emeritus in 2002, Sam has continued to teach his signature graduate course, The Economics of Competition, Coordination, Cooperation, and Conflict, with Four Seas, every year. We do share Sam with the University of Siena and with the Santa Fe Institute, where he continues to do groundbreaking work. Sam is fascinated by the immaterial economy and is currently leading with Wendy Carlin of University College London, the core project, to develop elegant and free online economic textbooks suitable for understanding the 21st century economy. In 2006, Sam received the Leontief Prize from the Global Development and Environment Institute at Tufton University, one of many international recognitions of his extraordinary achievements. Sam has recently been engaged in a grand project that literally spans human existence on the planet, much longer than mere in history, and examines the fundamentals of production, wealth, risk, exchange, hoarding, and sharing. That project has generated many publications, many fascinating and beautifully illustrated presentations, many lively discussions, and many inspired students. Today, Sam Bowles will deliver the first annual Sam Bill Bowles lecture, The Origins and Future of Economic Inequality. Thanks, Michael. Thank you all for coming. Thanks for your interest in my work. I have to say I'm a little bit embarrassed. I don't think that anything has ever been named for me except my daughter's dog, and it was named Sam. I'm not sure that was unerrific at the time, but she named it. She's here, and my other daughter and their husbands. Thank you very much for coming, particularly in Newport. You probably think that the picture in front of you is photoshopped. It's from Sao Paulo in Brazil, but I'll just show you another take of the picture. It's not at all photoshopped. This is a scene from urban Brazil, first world and third world. But I want to talk a little bit about where these ideas come from. They come from basically a bunch of unanswered questions. I was at school in New Delhi, India, the Delhi Public School. I'm in this picture here. This is me and my schoolmates, and I was struck by how totally average I was in the school at sports and at computations or almost anything. And I remember asking my mom one day because I was struck by how poor the families of the students there were. How does it come about that people are so poor here given that I'm only average in the school? And she tried to give me some kind of answer. She was a social worker and she took every opportunity to uplift me in my thinking. I'm not sure it was a very convincing answer, but the thing really did puzzle me that people were so nearly, people were so similar all around the world but were so different in their economic fortunes. That question really haunted me as an undergraduate and I saw a lot about it. But there was another, that's by the way, in case you wondered how to find me, look for the only white legs in that. There I am. But not too many years later, I was asked a question by Dr. Martin Luther King and the setting was this. I had just got my PhD or recently got my PhD from a pretty good university and I got a job at a pretty good university in economics and by that standard I should know a lot of economics. So when Dr. King asked a series of questions that we should write background papers for the poor people's march, which he was then organizing just before he was killed, I was of course delighted to know that I'd be getting these questions but I was absolutely appalled that I didn't have a clue about how to answer them when I actually saw the questions he was asking. And you can imagine the shock that I had. I was in my late 20s, I thought I knew a lot of economics but I just didn't know where to start. So with a group of people, including Herb Gintas who is here and some of the other people that Michael mentioned, we formed a study group, we met almost nonstop for 10 days, we wrote a bunch of background papers and at that time I decided I'm stopping doing economics the way it's been done until now. I was just two choices, leave economics or change economics and I'm very glad that the University of Massachusetts was what gave me the opportunity to participate in the change in economics which this wonderful institution has been engaged in ever since. So this is the kind of question I asked my mom. I couldn't then represent the world income distribution by these skyscrapers but here we have the poorest country here and there we have the richest, that's Norway over there obscured by the United States. These are the richest people in Chad or Congo. These are the richest people in America and just to give you some idea, this is somewhere where my schoolmates in Delhi would have been and when I returned home to Valley Regional High School in Deep River, Connecticut, they were probably somewhere like that. The difference is in order of magnitude and of course all I could know is that I was just about average in both places and so how do you explain it? It did bother me over a long period of time. So I pursued a whole series of research projects over my life about the question of inequality, why it persists, what creates it, what we can do about it. I have a very large number of co-authors. This is a paper we published. These are two of my collaborators, Fokusato and Borderhoff Mulder. And I'll give you a review. I'm gonna tell a story about what I think happened over the past 100,000 years of human society in terms of inequality. I think it may be insightful for where we're going and what we might do about it. That's why I'm telling you that rather esoteric story about the distant past. I believe it's true because of the fact that a research team at the Santa Fe Institute has uncovered, produced over the past decade and a half. The facts and the story together support a kind of explanation. That will be a model that is a set of causal statements about how the inequality may persist or intensify and what might be done about it. I'll end with saying a few things about the future. Of course, we can't predict about the future, but I think the model which we is based on the story and the facts will help us to understand upon what does a more egalitarian, more just future depend? What does it take to make that happen? And here I have a picture of some of my co-authors as you can see. So let me start with a story. In the beginning, we were a very hierarchical species. Here are some of our ancestors. This is a gorilla silverback and his entourage. Highly hierarchical society. Then things started to change. Here's the gorilla band, hierarchical primates. And then here is a painting from the Dawkinsburg Mountains in South Africa where I spend a lot of time camping and hiking. Of a rather egalitarian primate, that is early humans, hunters and gatherers. So there is a transition from a hierarchical animal to a rather egalitarian one, followed by a transition to farming and landlords and peasants and inequality about 10,000 years ago. And of course this then took a different form, same kinds of inequality based on material wealth. This is industrial wealth of course here, but the same kinds of class relationships that existed here. And then I want you to think about the transition from this manufacturing or industrial capitalist kind of economy to an economy today. This is a depiction of the World Wide Web, a connected society in which relationships to account more than material wealth. What can we expect of this kind of society? Now there's a warning here that I tend to cover 10 millennia a minute and if you don't believe it, check your watch. The story is gonna take much less than 10 minutes and I'm covering 100,000 years. So check me and see if I make it. In the first, maybe 90,000 years of modern biologically human existence, we were mobile hunter-gatherers. These are hunters obviously of large animals. These are hunters among the Hadza people in Tanzania with whom I've hunted. These are obviously you can see from this depiction here of Lamalera whale hunters. Cooperation was an essential part of their livelihood. If they didn't cooperate, they died. It was just, that's how they lived. Now, an important thing, these are again these Hadza guys with whom I was hunting. One of the things that they catch very occasionally is a kudu. Remember the name, it'll come up again, but the important thing for now is that it has a massive amount of edible calories. And so if they get one, it's a pretty big deal. And there's the problem of the shelf life of kudus, which is a challenge to them because the kudu doesn't last very long because they have no fridge. So put those facts together. If you get one, which they do extremely occasionally, that is once a month or once every two months they might get one. A band of three or four might get one. And no fridge, put it together and you have a very important lesson, which is you're gonna waste a lot of stuff if you don't share it. So you're getting stuff in large packages and it's wasteful if it's not shared. So not surprisingly, the limo there are whale hunters who you just saw, they divide up the whale before they take to the boats. They've already determined who gets what part. And these are the various parts. The sailmaker gets the tail, for example. That's very poetic because the tail of this whale looks just like the sail of the ship. This is a wall of the, these are the parts that go to the various people. So the hunters already know in advance how the wealth is gonna be divided up or the income is gonna be divided up. So Kudu Dynamics 101 says that if it's a whale or a wall of the, whatever it is, it's wasteful if you don't share it because of the no fridge problem. We're gonna come back to that. There may be an analog to that in our current society. So here we have, that's a former Kudu. That will be shared by a very large number of people. And this is most of human history. Essentially Kudu, how am I doing that time? Maybe, okay, I've got time. So I want you to remember this also. We're gonna come back to Kudu Dynamics. Now with the advent of farming, things changed. What do you see here? You see demarcated property lines. Clearly, this could be set up. We know that this property is somebody's and that is somebody else's. A little less, obviously, these fishing sites in the Columbia River of salmon fishers are also clearly demarcated. And we'll come back to these because these are owned privately, just as these are owned. This kind of land ownership was associated historically with the emergence of states, hierarchical governments. That's Aurangzeb at his throne in Fatih Korsikri near Agra in India. This, amazingly, is a depiction of the, it's a photograph, actually, of the daughter of one of the chiefs of this hunting and gathering society sitting on top of two statues of slaves. So what you see there is hierarchical, political systems arising based on the fact that wealth is now concentrated enough to be owned. These sites, those pieces of land. And of course, this continues into the modern period. Now, what is, this is the economy of steel, grain, the things are owned. So what is the true novelty of this? Well, what do you think's gonna be there? The fridge. The fridge changed everything because the things that constituted the wealth of this society could be owned. They could be demarcated, they could be weighed, they could be essentially fenced, and they could be inherited. And that made it possible for wealth to accumulate unlike kudos, unlike the wealth of our hunting and gathering ancestors. Now we have a slightly different society. This is a market in Cairo. These are things for weighing these beans and I'm saying this is the economy which we've had until now. By the way, this is the economy about which most of economics is written. An economy in which things can be weighed and measured and fenced and owned. It's not about the economy in which relationships, networks, even human capacities are the main form of wealth. So think about today. The wealth of nations, as Adam Smith said, what really matters is increasingly made up of knowledge which is primarily a public good or human capacities which are themselves difficult to own and to alienate, not of material things like cows, factories, and grain. So this is a big change that's taking place. We don't wanna exaggerate how much it's taking place but it is definitely happening. So what's the novelty of the new economy which I call the weightless economy? It can't be fenced and measured and owned. It's that you can own everything and sorry, you can own nothing and have everything. That the novelty here is the public good nature of the essential stuff that we're talking about which is what's going on right now. Sharing information because the marginal cost of being making it available to you once I make it available to anybody is zero. So what matters now is human capacities. I say they cannot be owned, stored, or inherited. I'll give you some evidence about that. You probably doubt it but Herb Gidson, I did write a book about how schools assist in the inheritance of human capacities and the labeling of human capacities but it's nothing like cows and land and that's a very big difference. Now the question is, these guys are concerned because it seems like the stuff on which the modern economy runs is a lot more like a kudu than it is like a cow. It may be about something it's difficult to own and more valuable if it's left in the wild. So another kudu in AmEx 101, like the whale or like the kudu, the knowledge that we have, the capacities that we have to produce and to share are very wasteful if they're owned singly. How'd I do? I did, didn't I? Okay, so that's the end of the story. So you get the picture, right? That's the case I wanna make. That that probably happened and that probably is what's happening and I'll tell you why I think it's true. So now we get some facts. The first fact is one which I think is quite uncontroversial and that is sustained, heritable economic inequality between families was not very common. In fact, it was quite rare prior to 11 or 12,000 years ago. And I won't give you the archeological evidence for that but I think it's quite convincing. I don't think anybody really disagrees with that. But here's partly an explanation. The wealth of farmers could be owned, saved and accumulated and inherited and that's in contrast to the wealth of hunter-gatherers. And I'm gonna try to demonstrate that with facts that my research team around the world has established over the past decade or so. And secondly, the primary form of wealth that's where the primary form of wealth came to be this material wealth, high levels of inequality followed. So I'm gonna trace the rise of substantial inequality to the rise of a new kind of wealth which could be owned, stored and inherited. That's the idea. Now let me have to pause a little bit. Why does the inheritance of wealth matter so much? Why is that important? Well, this is something which you probably thought about but just let me remind you. Suppose in every generation, there are chance events that happen. Somebody gets rich, somebody gets poor, somebody has a bad health episode or a good market outcome. And so these things happen every generation. They generate inequality in society. But now think about what happens if we have inherited wealth. It means we have inherited inequality. So the inequality today is the inequality of all these things happening in our current generation but also we're inheriting the inequalities that happen to our parents and our grandparents. So the more the wealth is inherited, meaning differences in wealth are inherited, the more we're gonna have inequality today. Well, when you think about inheritance of wealth, the family piano gets inherited okay. But what about learning? What about the fact that that young child is probably learning some skill from his dad? Is that inherited like a family piano? Well, the advent of farming was a revolution in inheritance because things shifted from stuff like this which is actually pretty hard to inherit. I'll show you the evidence for that. The things like the family piano that could be just passed on. And that made a big difference. So let's think about what's the wealth of a forging economy of our ancestors. And here I'm drawing on the work of Hilard Kaplan of the University of New Mexico, a co-author in many of these projects. What is the wealth? It's knowledge, it's personality, it's networks. It's what's called somatic capital. That is bodily capital. They have consumption smoothing is essential. You gotta find a way that you get through if you have a bad day or a bad month hunting. You have to find a way to get through if your water hold goes dry. Your stature, literally your strength and your health, your ability to catch and to dig is essential to the flow of income or services. Public speaking is important. A lot of decisions are made through discussion. And being good at that is one of the reasons why you can get the group to go your way as opposed to some other way. Think about this. A hunter-gatherer is being a good hunter-gatherer is extraordinarily demanding, cognitively. Becoming a good hunter, it doesn't happen until you're in your 30s, in your 30s. By the way, think about becoming a good welder or even becoming a good economist. Becoming a good hunter takes a lot of skill. Here's some data from the Ache people that Hilard Kaplan studied. That's an Ache hunter there. It's a very, so intellectual skills is a really important part of their wealth. Now none of these is readily transmitted, or at least not exclusively so, from parents to children. So the inheritance process for this kind of wealth is quite limited. I'll give you some examples. These are people in Botswana. These are Cuban people. This is a particular individual and he maintains ties walking to all of these places, giving gifts. This is Polly Wiesner's work. And what is that? Why are they walking these long distances? In some cases, 200 kilometers, obviously, on foot. Bearing trivial gifts, what's that about? It's maintaining an insurance network. That's what their wealth is. That network is why they can be sure that if they have a conflict in their group or if things go bad or if the animals move to some other place, they can move on and get some other kind of way of having a livelihood. It's a rather different way of making a livelihood and facing its dangers. So let's now think about, what's the raw data if we wanna look at inheritance? The amount of inheritance is gonna be important and I wanna make some claims about some stuff is inherited and some stuff isn't very inherited. So the kind of data we use, for example, we have maternal social status here. These are all individuals. The open ones are ones whose mothers were not alive at the time the daughter was growing up and this is the daughter's status and this is the parent's status. This is the kind of data we're gonna use and I'll use it quite a bit. We wish we could use this data but unfortunately it's for African spotted hyenas and not for humans. So this is by the way, they do just like humans. They pass on status extraordinarily. So these are the high status people in the group and they have high status daughters. We have a harder task. We have to study wills. We study actual documents about the world thing that's passed on and we get very large variety across cultures. I'll give you some example of that but this is basically how we work. This is a group of people in Kenya or sorry, in Tanzania. They're called the Datoga and here in just, I want you to understand where does the data come from? I want you to see and go through the hood and look at the data. A couple of times I'll show you this. Each one of this is an individual and these are the observations on the parent's livestock and the son's livestock and we're going to estimate the slope of that line. We're going to estimate these are logarithms so we're going to estimate the effect of having a richer in cows than average parent on whether you're richer than average. The slope of that line is going to be a key number. Notice here the slope of the line is basically flat and it's an interesting point. RS means reproductive success, fitness, number of surviving children. So it turns out that the parents who have a lot of kids don't have kids who have a lot of kids. They're not very much. The line is actually a little bit positive. So I just want you to think about, well, why is it that cattle are inherited but reproductive success is not? Is there something about cattle and about the biological processes of passing on a desire to have a lot of kids? Capacity, we don't really know what it is but we're going to see that there are differences in the kinds of things that people value, reproductive success being one among the de toca and cows being another. One is inherited and the other is not. We study, these are hunting and gathering societies, we studied hunting ability. Literally, the dad's hunting ability and the son's hunting ability or the mom's digging or gathering abilities and the daughter's digging and gathering abilities. We studied their social networks, the number of ties. We studied their RS, reproductive success and we studied some aspects of their strength. And this beta here is just the slope of that regression line that you saw. It's in log, so it can be expressed for you economists here as an elasticity. And these are the numbers that we have. And some of these are significantly different from zero. Some are not. But I present this because at the next slide I'm going to show you what we get if we look at cows and land. These are human capacities. Look what we have if we look at cows and land. This is obviously land, this is the Orma people, herders in Kenya, livestock and land. And remember the previous ones were about 0.2 or less. And here we have extraordinarily high figures. Now, let's compare the two. The basic point here is that the inheritance of material wealth measured by this term beta is much greater than the inheritance of human capacities. However you measure them, and we've measured them in lots of different ways that I haven't shown you. I'm just comparing these hunter-gatherers here and these agricultural and pastoral peoples. So let's now move to the question of inequality at a moment in time. I've been talking so far about whether the stuff that your parents have gets passed on. So what does it matter? How much, I mean, we have some inequality. Does it differ according to the nature of the wealth? Well, obviously human capacities differ. We're biologically quite differentiated in our strengths and our cognitive abilities and so on. But the important point, I think, is that biological constraints and also economic rationality limit the extent to which these differences will arise in human society. This is, in fact, not well-known to graduate students, but you cannot actually spend all of your life studying. To get the payoff on your education at some point, because of the finiteness of your life, you actually go out and do it. And that's really an important point. The accumulation of cows doesn't face that problem, at least if you want to inherit stuff and pass on stuff to your kids. So let's take it on an obvious thing. Let's look at inequality in height and inequality in cows. So I'm going to measure inequality by the genie coefficient. I think most of you have heard of it. It's a measure of inequality ranging from zero, complete equality to one, one person has everything. And I'll give you some examples. This is my colleague, Monique, a biological anthropologist. And this is what's known as a Lorenz curve, the red line. This indicates, for example, that the bottom fifth of the population owns 3% of the cows and so on. That's what the red line is. And we measure the genie coefficient by this area here, A, divided by A plus D. And that's the calculation for that's the inequality of cows in that society. And again, to let you see under the hood a little bit, this is what we start with. This is individual 199 and these are all males has 40 cows and so on. So we start with actual data from these people and then we generate these summary measures. So that's a fair amount of inequality. That's the inequality of the type that you might find in a country like Brazil or maybe South Africa. Now, the take home is that if the wealth is highly inherited, it's likely to be very unequally held. But what I want you to now see is that there are other reasons too. Consider the Lorenz curve for, say, height. Height is a measure of strength and capacity to do a lot of things. It's very highly valued. For example, it predicts your success in having multiple wives in a pollutionist society. So it's something that people actually benefit from. That's the Lorenz curve for height. Can you see it? No. No, you cannot, but that is a Lorenz curve. That is this area here, that's A, that's the A. Remember A over A plus B? Remember before it was 0.599? Here it's 0.025. Remember, if it's zero, there's perfect equality. So think about this. You're impressed by this. I'm impressed by this. Pals are much more unequally held than height. Now, it may be that, for example, being a little higher than somebody else is a big advantage. So we might have to translate the height into something, which is the value of height. But here, and this is among the Kipsige's people, the Manik studies, this is the distribution of height. And you might think, well, why is height so much more equally distributed than cows? It's because everybody has a lot of it. And if you don't have a lot of it, you're not alive. If you're not more than 140 centimeters, you're not going to reproduce probably. And you're probably, you know, you're not in the sample. 140, 130 is about the smallest people we get in all these samples. So you can see the Kipsige's are pretty tall people. So they have a lot of it. And so the inequality that we measure in this way is actually quite limited. Now, I've compared cows and height. And I'm afraid I might have convinced you that it's really all about agriculture and that agriculture came along. And because something about farming is what did it. So I'll show you again this picture in the Columbia River Fishers of the daughter of the chief sitting on the depiction of slaves. This is a hunting and gathering society that had slaves. And they had these people in the middle of the river, they fished here. There were others on the edge of the river who fished and actually caught a slightly different fish. And so we know who was eating what. And that's how Brian Hayden, archeologist, can say that these people, the ownership of key areas on the social and economic groups that possess these rights, that is these rights to these things here, persisted for a period over 1,400 years. The same people from Longhouse here, among roughly 50 individuals, we knew that those people had these sites for 1,400 years. I don't think we have a record in any society of a class system in which the very same people have occupied the positions over such a long period of time. Well, of course, once I understood how the society worked, I couldn't resist making a Lorenz curve. And you can make Lorenz curves for the society by the grave goods. That is the wealth with which these people are buried. And this is one of them. And if you calculate the genie coefficient on the wealth of these people, the wealth is measured in different ways. We've experimented lots of different ways of measuring it. You have a genie coefficient of 0.7. That would probably put South Africa and Brazil to shame. This is an extraordinary level of inequality. And so the point here is it was not farming. It was not farming that led to inequality. It was the fact that we had a kind of wealth that could be concentrated. It was valuable enough in a small space to be worth defending those fishing sites, for example, or those small plots of land or those cattle. It was worth defending, and it could be passed on. So what is the result of this? That is, when we now have these concentrated forms of wealth, do they actually get concentrated? And the answer is, you bet. Here's 9,000 years of inequality. 9,000 years of genie coefficients over this period. And this is a data set that Matia Focusato and I are putting together. And each one of these is a genie coefficient. And look at the data for a little bit. When Matia and I looked at this, we had the same reaction. Doesn't look like much of a trend. And everybody's always struck by that number there, Sweden, one of the most unequal privately held wealth in the world. That's a real fact. I spent a lot of time interrogating stats Sweden about that. There are many studies on which that is based. These are all kind of other studies. If you want a shorter time span, this is just yesterday, only the last thousand years. You see the same kind of pattern. You may, I'll get to what these data are actually measuring in the next slide. But what you see, I mean, what I get out of this is material wealth. It's extraordinarily unequally held. It's very unequally held. And it doesn't seem to matter when or where it is. I'll come to Chattelhui in Colorado in just a minute. But it doesn't seem to matter very much, except for those two. Now, so let's think about the data. Obviously, this is a very difficult project that Fokusato and I are doing, because we need to make sure that we can compare the data on burials with the data on modern wealth, or land, or cows, or health sizes, and so on. And they come from tax records, land records, and so on, bequest inheritance. We're concerned about these differences in wealth type. We're concerned about some are small populations. Some are large populations. You can imagine that there are some econometric ways you can actually assure or attempt comparability. I cannot assure you that we've done as well as we could. But I think so far, we're pretty persuaded that these data are roughly comparable. Now, let's look at this picture again, because I want you to think about a possibility. What about these things here? The three really low ones. I mean, this is just for reference. This would be like Denmark today, or Finland, or something like that. So they're worth studying. And these are societies, which are farming societies. And they're farming societies in a land-abundant environment, in which land is basically free. So they're farming, but they don't own the land. They own the crops that they take in, they own the stores. But the limit to how rich you can be in the society is not the land that you own, but the number of people you can muster to actually work for you, or the amount of strength that you have yourself. Interestingly, the economy here and the economy here were, for a time, almost identical, as far as we can tell, archaeologically. And then here, they discovered a deposit of salt, which they then mined, and they made it into English. It was actually used as a currency. So they were just printing money. And they immediately had this highly unequal society with a very walled center of the city, highly defended, and so on. So it's part of the story. Now, so far, what I've suggested is that the emergence of widespread inequality inherited inequality between families took place around the advent of farming, but not specifically because of it, and also around those quite a bit later advent of states, which I mentioned before. Now, and the important fact here is that the wealth of farmers could be owned, saved, accumulated, and inherited. That's why that kind of material wealth was so unequal. But I want to then point to something else, which is in modern economies, we have evidence that human capacities are more equally distributed than material wealth. So the same thing that you might say about things like height, or hunting ability, or something else, you can say today about what we're all doing here. That is, we're acquiring our capacities to do research, to talk, to invent, to create. So these are the data that you saw before. These are the range of genie coefficients in that data set. Just for your reference, these striped ones are from what I call democratic capitalism. That is, capitalism in the 20th century is distinctly more unequal in privately held wealth than earlier societies, the big exception being slave societies, which were actually a little more unequal than the democratic capitalism societies. But democratic capitalism in a capitalist society in which there's at least universal male suffrage. Now, if you look at these societies here, I say these societies are labor-limited societies. These are societies in which land, not labor, was the thing that was holding up things. The real constraint. Now, if you go forward here, this is the mean of those societies. And as you see there, it's absolutely, it's disjoint. But here's the mean of inequality of schooling in modern societies here. So, it's quite striking. Actually, I could give you the distribution of genies, but it would look something like that. Big pile up here at 15. So, of course, you'll tell me, and Herb Gintes and I would have to agree, difference is in the quality of schooling may be very important. But I'm quite convinced that even taking account of the quality of schooling, you wouldn't get such high inequalities as you get for material wealth. Okay, are you all lost now? I gave you an idea of the trip, right? But you may have lost the map. But you know what this is all about? This is about, it's your trip. So, you're not gonna master all of this. I'm speaking rather quickly. I'm putting a lot of stuff up there. I hope that you're gonna decide to join me in this trip. That's why I put this beautiful Vermeer here, the geographer. That's what I hope you all wanna be. Join me in being puzzled by this stuff. But let me try to summarize where we are. Remember, we started here, then we went to the first labor-limited economy that was hunting and gathering. In which, of course, land was not owned and the animals were not owned. The means of production were not owned, except for a few things like, for example, weapons, although they were owned in an odd sense in the sense that if my arrow killed the animal, it was often that I couldn't eat the meat. Somebody else had to eat the meat. And then we had the advent of concentrated and defendable property, inheritable, and it became quite unequal in most societies to industrial capitals. And now, this is the question here, I'm sure you knew where I was going, right? This is, are we returning to a labor-limited economy? Is that the economy into which we are now entering? So, to ask, to answer that question, I think we need a model. So, we had the story, the facts. And I wanna tell you what the objective is, is to see how the story and the facts fit together in a way that could allow us to make causal statements about what might be changing inequality today, what might change it in the future, and importantly, what we might do to implement a more just world. That's the idea of the model. And so, we can ask this question here in an economy of the future in which knowledge and human capacities, social connections, and so on, is more important than material wealth. In the production of goods and services, would you expect that economic inequality would be greater than or less than the same, or the same as it is today? Now, I think you probably can guess what I hope the answer to that is, but I don't really know the answer to that, obviously. And I think the answer really could be either way, all three ways. And I'll tell you why I think there's reason for hope, and I'll tell you some big ifs. And the ifs will depend on what people do. Here's the model. Arrows mean causes. Wealth inequality is the cause of what are called wealth shocks, that is these additions or subtractions, your cattle get stolen, or you have a very good period in selling some commodity. Then if the transition across generations is substantial, those inequalities accumulate over generations, so in any particular generation, wealth inequality is substantial. By well-being, what I mean is we would call it income today. In many societies, they would just call it well-being. They might measure it even by things like how many children you have, or whatever it is that people value. But today, we have measured this by something like income. Now, here we have an important determinant of whether or how unequal a society will be, which is how important is material wealth in producing the stuff that we need? You already have the idea. If material wealth is very important in producing the stuff that we need, we've got a big challenge because it's pretty certain that that material wealth is gonna be quite unequally held, at least in most of the societies that we've seen. And then there is redistribution. So, suppose you have unequally held wealth. Example, Sweden is pretty good, but then you have a substantial amount of redistribution through taxes and transfers, and you may have a very moderate level of inequality. And so, these are four parameters that is their mathematical terms, and they together explain the inequality and well-being. And when I say durable, what I mean is, in the long run, this will persist. Technically, it's an equilibrium, or it's the amount of inequality in what's called the stationary distribution of wealth. And if you're having a mathematics withdrawal problem right now, this is how the model looks and here's a place where it's published. It's a very simple model, overly simple, but it helps me understand the kinds of terms that I should be looking at. So you can see, there are only four terms here. That's these four things, and it's saying the inequality is gonna be a function of these things, and here's the function. It tells you where to look. That's all it tells you. Now, what I'd like the model to help me with is the following question. In a democratic society, will an economy increasingly based on human capabilities and networks rather than on material wealth support a more equal living standards in the long run? And I'm gonna conjecture a positive reply before giving you the ifs. First is, the non-material wealth will not be very unequally held. Nowhere near as unequally as the material wealth. Secondly, the modest levels of intergenerational transmission means that inequalities in this non-material wealth will not accumulate very much over time in generations. The reduced importance of individually held material wealth will mean that the highly unequal stuff just won't pound as much as it did before, and that will also be important. And finally, I think in a society based on human capacities, networks, and knowledge, the costs of redistributing through taxes and transfers may be reduced. That's again, a hypothesis about the opportunities for redistribution by states and by other institutions taking place in a society based on knowledge and human capacities rather than material wealth. Now, obviously, if you look at this, that's the model again, I'm just gonna, I can translate that into, oh, what was that conjecture that I just said? What was it about? Reduce shocks, okay? The shocks to, say, height, strength, network ties are not likely to be as large as losing all your cows or getting a thousand cattle. The lesser transmission across generations means that wealth inequality at a particular time will be less. The importance of the material wealth, what I mean there, in producing goods and services is likely to be reduced. That's what the information and caring economy is all about. And finally, I think the opportunities for redistribution can also, not only opportunities for, but the requirements for and the pressures for redistribution will also be enhanced in this society. Now, a year ago, was it? Many of you heard a fantastic lecture by Tomah Piketty, based on his book, Capital in the 21st Century. As you know, Piketty has a rather different view of the future of our societies, namely that we're headed for a period of intensification of inequality. And the 20th century, which was a bad time for the very rich, was just a blip, a blip associated with two world wars and the Great Depression, it won't be repeated. Now, Piketty may be right, but I think I'm talking about a different view and namely human capital in the 21st century. And I'm proposing that maybe we could turn Piketty's results over, by simply pointing out that the thing he's worried about, which is physical capital and its importance, may be declining. Of course, I'm not sure I'm right, I have huge respect for Piketty's work. Okay, what are the ifs? Well, here's a characteristic of the information-based economy that is not unique to it, but it may be enhanced in it. And that is increasing returns. Winner take all. That is, if you're a little better than somebody else at doing something, you can beat the whole competition in the world. If you're a little better, and think of performances like music or something, if you're a little better than somebody else, well, no one's gonna listen to anybody else. Well, in the past, if you're the best person locally, well, then you were the best person locally and you had some following and so on. So there is a winner take all aspect of an information-based economy which has profoundly unequalizing tendencies. I'll give you a couple of examples. The second thing is politics. Remember, I mentioned democratic politics and I think they're very important because the extent of redistribution, something I've learned in this process, in the process of this research is that redistribution is really key. The politics of redistribution is what really distinguishes the countries that are quite equal like the Nordic countries from the rest is from Southern Europe. It's not their material wealth inequalities. It's not even their schooling inequalities. It's the redistribution that they do. So studying the politics of redistribution is important. And the second thing, of course, is the politics of intellectual property rights is absolutely important. You can turn knowledge into a private good and it can be inherited just like a cow. So these are the two big ifs. Just to give you some idea of winner take all, we know VHS versus BMAC. So we think about social media wars. No one remembers Myspace but it did exist. It was by the largest social media in the world, I think 2005 and it disappeared. So these are big battles. This is not battles between, say, the big three or the big five in automobiles. This is, you got a big winner. Now that big winner, of course, earns huge prizes. And so this process here can generate a tremendous amount of inequality. The intellectual property rights side of things, I think it's very complicated. I'd be happy to talk about why I think that intellectual property rights should be abolished. But I think that the important, I wanna talk about the history of the ownership of stuff that could either be public or not. Think about kudos or antelopes or zebras. The vast majority of species that contributed to our well-being throughout most of our history, they couldn't be domesticated. That is, I mean, people tried. They were very difficult to domesticate. And they remained more valuable in the wild. And then think about some, a few horses, cows, dogs became more valuable and domesticated. So some small number of species in it, where they had their value enhanced by the process of being owned privately by somebody who could tether them in their house. So now the question is this, is a song or a new app? Is that like a cow or is it like a kudu? Is a song something which is more valuable if it isn't owned or a new app or a new idea, some new process of thinking? Of course, I think for many of the, for most of the things, leaving these things in the wild publicly owned makes a lot more sense. And the reason for that is that if you don't do that, if you allow them to be privately owned, they'll be sold at huge cost to people who could benefit from them but possibly can't pay the cost. Thereby shrinking the sphere of people who can participate in this knowledge. And one fact that I hope every economist knows is that efficiency in a market economy requires that price equals marginal cost, right? That's the so-called invisible hand theorem. Price equals marginal cost. Well, what's the marginal cost of making available an additional piece of information once it's available to somebody? It's zero, that's right. So this is not something you can distribute and respect the price equals marginal cost rule. Now, it doesn't mean that obviously the, then the question, well, how do you get the stuff produced, I mean, we're happy to talk about that. We produce a lot of it without privately owning it. But in any case, I think these are the problems that we face. Before closing, I want to say a little bit about redistribution. This shouldn't have been a surprise to me, but I mean, this is what I would call the redistribution ratio. This height of this bar is how much redistribution there is. For example, here in Sweden, it says the Gini coefficient for disposable income that is income after taxes and transfers is half of what the Gini coefficient is income after taxes and transfers. So essentially, the height of this bar is the extent to which taxes and transfers reduce inequality of market incomes. And the range is extraordinary. Here we have Japan, US over here, interestingly, East Asian countries, fairly egalitarian ones like South Africa, South Korea, Taiwan. These are mostly Northern European countries. These are huge differences. This is really the story about the differences in the country is the redistribution process. And if you look across societies, again, these hatch bars here are adding in public goods. This again is the redistribution ratio. These are some of the Nordic countries. Here I've tried to add in free stuff that doesn't go to families, but is made available to people like public education. Notice here we have hunter-gatherers. This estimate I made by studying among the Aceh people and four other groups that we know who caught the stuff or who collected the stuff and then who ate it. We have a matrix. This person caught it and that person ate it. So we can calculate exactly how much redistribution there is. And there the redistribution is just immense. Essentially about two thirds of the inequality is eliminated by putting the stuff in a common pot and then eating together. And that's a kind of early kind of consumption smoothing. It's kind of an insurance policy which they adopted. Horticulturalists are low-tech farmers and they also do a fair amount of redistribution. That's mostly not state redistribution, but family redistribution. Interestingly, as you see these Asian economies are really quite distinctive. Well, let's try to wind up, what have we learned? I have an interest in early inequality, but of course I've got that interest because I'm passionate about the possibility of a more just future. And so I am constantly asking what we can learn about the just future from a time in human history when we had a radical change in how much inequality there was that is shifting from a very egalitarian kind of society to a rather unegalitarian one. Well, I think they're basically farming and despotic states came along and created conditions for inequality. That is, there was an economic condition, namely wealth was highly heritable and it was subject to significant shocks and that gives us in a long-term equilibrium a lot of inequality in wealth. That's the economic condition. The political condition is that wealth that is highly unequally distributed has to be able to, you have to be able to benefit from the income flowing from it. That is, if the rich can't benefit from the fact that they own a lot of land, then of course there's not gonna be a lot of inequality. So there's a political condition, namely the enforcement of these unequal claims on resources. And finally, a reproducibility condition which is societies that were organized that way had to work reasonably well, at least well enough to win wars and not to try to emulate other societies. So in other words, there's a group competition going on. Remember, we're talking 10,000 years of history and the societies that adopted these highly unequal structures, they did pretty well in competition with other groups. I mean, the sad story is societies, highly hierarchical societies of farmers eliminated hunter-gatherers and pushed them to the four corners of the earth, which is now where we study them. So these were the conditions that made farming and later industrial capitalism in its pre-democratic form such a well-suited environment for the generation of inequality. Now, what I call the weightless economy, it seems to me, will not reproduce these conditions. It won't reproduce the economic condition because the types of wealth will not be subject to the magnitude of the shocks or to the heritability. The political enforcement of the claims of unequal wealth by essentially keeping this stuff to yourself is already shown that in liberal democratic societies, at least in some of them, the forces for redistribution are quite strong and very difficult to resist. And finally, let's think about the reproducibility condition. Are countries that are highly unequal today going to do well in competition with other countries? Well, that's an interesting question. I can think of a number of reasons to think the answer would be no. Countries that are highly unequal devote a significant fraction of their labor force to what Arjun Jayadev from UMass, thank you very much, and I call guard labor. That is the labor which is dedicated to essentially maintaining order, maintaining the institutions of society. The United States devotes much more of our labor to that than do the more equal European societies. It's a waste. I mean, it has to be done in America, otherwise the liquid would blow off because of the inequality. But guard labor is a drag on the economy. Countries that don't have that weight are gonna do better. Think about intellectual property rights. Suppose intellectual property rights are so-called strengthened according to what the US government would now like to do. What does it mean? It means people won't be able to use stuff the marginal cost of which is free. Well, that's obviously inefficient. If some other country, if they can manage to do it differently, can arrange their intellectual property rights so that the knowledge is made freely available, they're going to do better. I could go on down the list, but I think the reproducibility condition may also have been withdrawn from high levels of inequality. Let me close with this. This is a herder, a Tandroy man in Madagascar. They, you may know this in herding societies. Herding societies are famous because of the levels of inequality that develop between the herds. You already saw that among the Kipsiges in Kenya, the genie coefficient was almost 0.6 among the farmers. And in these societies, when an elder, particularly an elite member of the society passes away, there is a commemoration, like a funeral, and it's typically a feast. And at this feast, they, of course, wish the deceased well in the next world and so on. Now, okay, think hard. What do you think they eat at the feast? The cattle, the cattle. The cattle. The cattle. How long do you think the feast goes on? You're not going to believe this. Don't even imagine it. The feast goes on until the herd has been consumed. The feast goes on until the herd has been consumed. It goes on for months in some cases. They just, they distribute the herd. So it's rebooting. Rebooting every generation. Now, I mentioned this because herding societies have a technology and they live in an ecology. They're growing cows. Cows can be hugely and equally distributed. Among the Tandroid people, they've adopted a different thing. They've adopted a 100% inheritance rate. And now, if you ask the Tandroid person, why are we doing this? They wouldn't say, we're doing this because we like equality. They would say, we're doing this because we want grandpa to be happy in the afterworld. But whatever reason they say, the Tandroid people have been doing very well doing just this for a long time. Now, I mentioned this because what I've said so far might lead you to think that inequalities of wealth really can't be changed very much. But then we see some examples when they are. So, I want you to think about inequality as policy. It's something that we choose to do. Think about just how different America is from countries very similar to us facing the same using the same technologies, facing the same world competition and so on. So, if you think about, for example, if you think about hundreds and gatherers, their transmission of wealth across generations is it's not zero. They do transmit wealth across generations. They transmit it about as much as Denmark does across generations. And the most unequal societies in our sample, the herders and the farming societies, they transmit wealth across generations kind of like we do in the United States or UK or Italy, the most unequal in that respect. Well, what have I learned from this? I learned that today in this world, facing the same conditions, we have some countries doing this and some countries doing that and the differences between these countries are as great as any differences that we observe in the entire ethnographic and prehistoric record. That is, today's world, the institutions, policies, choices, cultures, whatever they are that account for these things, they're as different as they are from hunter-gatherers on the one hand and hierarchical farming societies on the other. So, there may be a question of policy that we should think about. I'll come back to the question of, it really does depend a lot on what we do. Because politics matters, education matters, and I'll say one thing about the thing that Michael mentioned. Core is the curriculum open access resources for economics. As you say, it's teaching economics as this the last three decades had happened. It's free online, it's an intro course. We haven't even unveiled it yet, because we're not ready, but it's already being taught as the intro course at University College London and Sciences Po in Paris and I'm told it will be introduced at the Toulouse School of Economics next year as well. And this is before we started. They, I mean, people are really adopting this very quickly as a different way of teaching economics. That's Antonio Cabrales at UCL. And I'll close with these guys who have, by the way, don't worry, we are actually shooting at a target. Remember this, remember we heard it first. And thank you, UMass. It's been a wonderful 40 years and I look forward to many more. Thanks. Stand between an audience and the reception. So let's won't go on for too long to David. I think we'll ignore that last comment about remember where you heard it first and attempt to cleanse an intellectual property rights. I'm curious, why in eight year analysis do you not include the 20th century state socialist party rule of regimes which achieved a relatively egalitarian income distribution not through redistribution, but through changing to build ownership and plans income distribution. And it seems to be in some of my solar to the hunter-gatherers. And the hunter-gatherers didn't really be discouraged by what we pointed out. Even before they captured the animals, they hadn't agreed on redistribution. They were never private goods. Can you hear David in the back? David, why don't you stand up? Okay, what I said is I wondered why Sam did not include in analysis the 20th century state socialist party rule of regimes which achieved a relatively egalitarian income distribution not through redistribution, but through public ownership and a planned distribution income which seems in some ways similar to the hunter-gatherers who didn't really redistribute, as he pointed out, before they even shot the animals or captured the animals, they already had an agreed distribution. They were never private property that was going to be redistributed. So I'm curious about that. The reason, the purpose of the talk like this, it would be balanced to do that. As you can see, thus far, the research has been extremely data driven and it's very hard to find data on income distribution, wealth distribution and so on. There are differences in wealth, of course, even in simply planned societies. But I think what David said is exactly right. Essentially, what you do is you cancel the highly unequal stuff that is the material wealth ownership. And then what you have is a labor, it's like a labor constrained economy because the material stuff is still constrained but it's not getting paid. Then probably, I mean, it's probably that if you take out the capital and just leave the labor earnings, you substantially are going to reduce the amount of inequality. And having a pre-organized distribution plan ahead of time has tremendous advantages because then you don't jockey for position. You saw those guys from the two votes attacking the whale, the reason why they're cooperating and attacking the whales because they already know what they're gonna get. One of them didn't rush up there and try to get the whale first, which is of course what we do in our societies. Bob. I speak a lot of mostly English. Oh, sure. So a very simple, I guess, basic question is should we care more about inequality or about reducing poverty? So if you look at some of your images and if it takes like a World Bank index of income, these are very poor people and the goal of economic development is to raise their material living standards. So how do we juxtapose those two things in the framework? Well, I think both are worthy objectives. Obviously, when you can eradicate suffering for material reasons at limited cost, it's unethical not to do it. But even when there is not intense suffering, when there are vast differences in the kind of opportunities that people have as inequalities, that also is unjust and rectifying that also should have a claim. I mean, remember, differences in wealth are not simply differences in the size of your house and so on, differences in wealth are differences in the kinds of freedoms that you have. And so a society dedicated to a notion of equal freedom has to take wealth inequality very seriously, quite apart from the question of poverty eradication, which of course I take very seriously. So what if there's attention? Okay, you take the obvious case in point in the last generation, two generations is China, which has made enormous advances in raising the average living standard at the cost as you showed of very high inequality. So how do we, how do we, you didn't include that kind of effect in rise and productivity that could lead to greater inequality but reducing poverty. I don't have any simple rule for making that adjudication other than I'm not one to say that all I care about is inequality or all I care about is poverty, I care about both. And if you take a particular case, in your particular case, if you were to add, if the counterfactual is that China had remained growing rather slowly but a more egalitarian society, I would say I'm fine with what happened, but in part because I think forces will develop in China for a more egalitarian distribution even if it takes a generation. But if I didn't think that, I would have to think twice what you said, Lance. Thank you very much. My question is, I was trying to follow your analysis and look at understood the importance of redistribution, but I wasn't sure I saw how you introduced democracy. And my question is, how does it arise? And how does it arise differently in different societies? And briefly, is there a relationship between democracy, whatever it is, and the persistence of inequality? Well, how democracy arose is of course a long story, but it had, I think, a great deal to do. I think I would combine Marx plus warfare. Marx described how capitalism is the first economic system in which the exploited members of society would be brought together in factories and in cities to recognize their common interests. I think this was a very important part of the kinds of protests and the kinds of opposition to exploitation, which took place in many places in the 19th century. But that was combined then with wars that happened. I mean, the First World War was very important. It was a very labor-intensive war. The working class was armed and people thought it was either just or at least prudent that they should get the vote. So I think basically a combination of bringing people together so they understood their common interests, plus the fact that nations had an interest in maintaining the legitimacy of not only the state, but of the inequalities that existed. Now, what is its role in this? Well, I think we saw something about this last night in Iowa. I think inequality is actually vulnerable and inequality is vulnerable when it gets, even in America, inequality is vulnerable when it gets to a very high level because there are just too many people who would benefit from even poorly designed policies of redistribution, much less well-designed ones. So I think that there is, I'm basically an optimistic person. You've done that for many years. But I do understand that America is a good example of how sometimes democracy doesn't do much about inequality. I think in general there are limits to how much inequality you can have in a democratic society. And for the, you know, it's either it becomes undemocratic as the United States has to some extent because of the financing of elections, or it becomes more egalitarian as the Northern European societies have done. Yeah, Diane. You have two different theories about how you behave with human nature in here. One is the kind of economic determinist that will be moved from produced cows. We automatically have futile shifts and we have exploitation and we have inequality. But yeah, we have the exceptions of the... Tandroid, the Tandroid. So the interesting question that seems to me is what explains those differences given the same material conditions. That's absolutely right. And when I would add to that, what Diane is saying, throughout most of the talk, I've talked a little bit like a technological determinist. That is, you have certain ways of producing stuff and that gives rise to high levels of inequality. Well, the first thing to notice is that when farming developed, most of the societies in which farming developed did not develop empires and large states and highly unequal distributions of income. For thousands of years, they maintained the very egalitarian traditions of hunters and gatherers. In fact, in our data set, the genie coefficient of the low-tech agriculture societies is no different from that among the hunters and gatherers because we happen to have societies which didn't go that way. So understanding why some of them went one way and some of the other is important and it can't be predicted by the technology because the technology is the same. Why the tandoor do that is of course a mystery to me but of course the question more relevant to us is under what conditions can we today do like what the tandoor do? And I didn't talk about that. It's obviously, I think, a very, very important topic. But it isn't so much schizophrenia about human nature. It's that I was a little bit moving too fast and talking about how I see historical processes as sort of varying between some kind of a situation with people just decide we're gonna share all the meat as opposed to people who decide, well, we have cows and therefore we're stuck with inequality. That's obviously not right. And thank you for pointing that out. Yeah. I was just, I'm not sure if that's the question that everyone's talking about human nature but I do have a tension between some kind of technological determinism but it's wrong because you also temper that by suggesting societies at a different level of technology may have a very different kind of politics of distribution. So the tension here is, is politics, to what extent is politics in command of the general issue of politics as institutions and so on. And it seems to me you don't really resolve that. We're saying there is this technological thrust which is the internet, the network which can now dictate at least promote or improve these certain outcomes. And yet again, societies at a different level of technology redistributing very different ways why that's politics. And for some understanding of what kind of politics I think of what I'm thinking of things a brilliant article about four years ago when it was provided by somebody named Cheval's co-identist. Crisis of liberal democratic capitalism in which he focused precisely on the ways in which no one was able to redistribute and causes the powerful but also have been unable to move beyond a certain kind of negative power and never produced a certain kind of crisis. But I'm looking at more of that kind of analysis. Well, if I wanted to say anything about that I'd just ask you to answer the question you've been asking an expert on social democracy in Europe. No, that's absolutely right. I mean, it's obvious from the way I end this talk that I think politics is what's going to distinguish these two alternative futures that we may have. But I think to come back to Diane's question it's also true. I mean, think about the question of how did hierarchy, how did political hierarchy first emerge in these small scale societies? I mean, this is, it's a really hard problem. You remember, all families are heavily armed and they're skilled at using weapons, men and women. And because women have digging sticks and so on which are extremely dangerous. So people can really inflict a lot of damage on other animals and they can, on human animals too. Along comes somebody, somebody's and say, no, we want to run you. We're going to tax you or something. It just doesn't, I mean, it doesn't make sense that that's the way it took place. Now there are cases when of course there was an imposition from the outside and that had to do with it. But understanding the political transition whereby a group of armed, egalitarian, and I'll say politically democratic people which is what those societies were in the sense of equal rights to speak and be heard how that got transformed. I mean, that's something which I'm in the process of studying that I didn't talk about it today but there's a lot to be said about under what conditions that would be more likely to happen than not. But it's a political question and we have to have political answers now too. Who's going to make the stuff? Well, we're talking about the future. We're not making stuff. I mean, those are the ones that are making naps. Well, if we're reducing inequality, people are going to buy more stuff. So as a part of this political process, choosing the far reaches of the communities that will make the stuff and suffer less or more, more or less inequality along the way depending upon how long it takes. So what are the policies of that? Will the redistribution be really good in some regions of the earth and really bad in others? So we have to go through really ugly events along this part. I don't know the answer to the last question is really hard but the question is, I mean, there's a lot of stuff, right? This and this building and, you know, so the idea that we're in a post-materialist economy is just an illusion. That's not true. And I did hint at the fact that the expansion of the knowledge-based economy, the weightless economy, has not proceeded very far. I mean, we're talking maybe 15 or 20% of the economy really fits the kind of stories that I told. But I mean, do remember that in rich countries, a very small fraction of the population is involved in producing shings. That's really small. It's mostly caring for people and selling stuff and talking to each other and so on. So I think that that's not the case in relatively poor countries. And so one of the things that's quite likely is there'll be a specialization and the more the stuff will be produced in the relatively poorer countries. And I hadn't thought of what you said, but it's certainly likely that the opportunities for more egalitarian solutions might come first in the richer countries precisely because of the relative unimportance of material wealth. I don't mean to exaggerate it's unimportant, but I mean relative to what it would be in a plantation-based economy or a factory-based economy. And I don't know, I hadn't thought about the differences in the world, but that's a very interesting one to think about in terms of international trade theory and comparative advantage, yeah. Even in the knowledge-based economies, if you don't address poverty created out of the existing inequality that we started off, then you could have sub-groups, subordinate groups, even in the knowledge-based economies that are suffering a lot, still suffering a lot of inequality. Yeah, absolutely. I mean, there's, I think that there is, I mean, think about this just economically where the production of stuff is getting to be really cheap. I mean, it's really easy to do, it doesn't take much. You can do it on your 3D printer, et cetera, et cetera. Exaggerate stories, but it's really true. So as the stuff gets to be cheap to produce, then it should be that the caring and the research and the science and so on, that should become scarce, right? That's the stuff that we're not having all this technical progress in. So if you ask an economist, if you didn't tell them the names of these sectors and the names of the occupations, you say, well, those occupations should see their wages going up, except for the fact that in some of them they do, like, for example, some of the research and medical areas, and some they don't. For example, the caring industries of caring sectors. And I think a real challenge is to, as caring becomes an important part of our economy as of our demographic structure and other things, how do you find ways to raise the wages of people who are working in those jobs? I mean, some societies have done much better than we have, but that seems to me that that kind of labor is becoming increasingly scarce in the sense that we're rapidly reducing the labor we need to produce the stuff. Just a quick clarification there. Did you acknowledge the creation of teachers on caring? Yes, yes, yeah. I love the story about the refrigerator, but there's another thing. Hunter-Godler's fire goes back 400,000 years. And you can cure, and you can store it. And an alternative argument is that the reason they didn't do that is because we get stolen and they'd be fighting all the time and they wouldn't be able to go to sleep at night. So the conclusion was like, eat all the cows, which is a non-technological alternative to the refrigerator. I just want to know what about it. Well, it is true. What Herb says is true, that as many societies, for example, the hundreds that I showed, right near them there are people who also are hunters, but they dry meat. And so it's not that it can't be done and it's not that they don't know about it. And also think about some of the Arctic peoples who have. They do have a fridge. They live in the fridge. So there's a sense in which many societies have chosen not to store stuff, either because of Herb's suggestion because they don't have the property rights associated with protecting it, or because they prefer this contemporaneous system of sharing because it's a more effective way of ensuring yourself. That is, if you have a large number of 20 or 30 people or so and you're all essentially eating out of a common pot, some of the stuff, particular species, and so on, if that's the way you're ensuring, that actually is a lot more secure than you having a store, which may last you a year. Storage technology in those days was extremely poor. You lost a lot. Not from theft. You might lose it from theft. But the shelf life of the stuff, even with fairly sophisticated techniques of the day, means you'd lose a lot. So self-insurance wasn't a very good strategy compared to co-insurance. And that's what we do today. We do a lot of co-insurance. That is essentially watching out for each other through the various kinds of ways of redistributing opportunity and providing floors and so on. And that's an essential part of a risk-taking society. Imagine a hunting and gathering society that didn't have a common pot. They all ate whatever they got. That day, the huts of people, when they went out, they're looking for kudu. And if they get a kudu, I mean, it's really fantastic. Or they're looking for a very large amount of honey, which we did get while I went out with them. And so that's what they go for. And the caloric return per hour of labor is huge in those areas. But if they didn't have it, but they only get it once or twice a month or two months. So now imagine they didn't have any insurance. So there's no welfare state among the huts of people anymore. What would they do? They would hunt rabbits. They would hunt very small animals. They would shift to tubers. They would greatly reduce their caloric return per hour because they didn't have an insurance system. So essentially, think of today. Think of the kind of work that we're all doing. We're doing research for having ideas. We're trying this and trying that. Mostly they fail. You can go for 10 years without having a good idea. And I'm not going to assure you that. So I mean, we have a problem. If we want to have a creative society, we have to have a way just like the hot set of making sure that people who are doing this work, actually, aren't going to suffer if they come up with a bad string of a few years of no tutu or no app or no top song. I think it's time for reception.