Hillard Kaplan

Intergenerational Wealth Transmission and the Dynamics of Inequality in Small-Scale Societies

Origins of Egalitarianism Wealthy contemporary societies exhibit varying extents of economic inequality, with the Nordic countries being relatively egalitarian, whereas there is a much larger gap between top and bottom in the United States. Borgerhoff Mulder et al. (p. 682; see the Perspective by Acemoglu and Robinson) build a bare-bones model describing the intergenerational transmission of three different types of wealth—based on social networks, land and livestock, and physical and cognitive capacity—in four types of small-scale societies in which livelihoods depended primarily on hunting, herding, farming, or horticulture. Parameter estimates from a large-scale analysis of historical and ethnographic data were added to the model to reveal that the four types of societies display distinctive patterns of wealth transmission and that these patterns are associated with different extents of inequality. Some types of wealth are strongly inherited and, hence, contribute to long-term economic inequality. Small-scale human societies range from foraging bands with a strong egalitarian ethos to more economically stratified agrarian and pastoral societies. We explain this variation in inequality using a dynamic model in which a population’s long-run steady-state level of inequality depends on the extent to which its most important forms of wealth are transmitted within families across generations. We estimate the degree of intergenerational transmission of three different types of wealth (material, embodied, and relational), as well as the extent of wealth inequality in 21 historical and contemporary populations. We show that intergenerational transmission of wealth and wealth inequality are substantial among pastoral and small-scale agricultural societies (on a par with or even exceeding the most unequal modern industrial economies) but are limited among horticultural and foraging peoples (equivalent to the most egalitarian of modern industrial populations). Differences in the technology by which a people derive their livelihood and in the institutions and norms making up the economic system jointly contribute to this pattern.