This article originally appeared in the latest issue of Perspectives, KCL Economics

Society Journal.
Thousands of years ago, various religions developed an idea some called
jubilee. It entailed the acts of canceling or reversing income and/or wealth
inequalities (especially of land holdings and debts) that had developed in their
societies. Often, jubilees were stipulated to occur periodically every 49 years,
more or less. The point was not to change the socio-economic system; it was
rather to redistribute property and then restart the same system again as a way
to preserve it. Variations of the jubilee idea have survived and occasionally
surfaced into public discourse ever since.
The idea of jubilee was based on recognizing two tendencies in those societies
and how they could threaten social cohesion. The first tendency emerged from
their economic systems (their modes of producing and distributing wealth). It
was movement toward ever-greater inequality of wealth and income until
political authorities intervened to stop, slow or reverse that movement. The
second tendency entailed beneficiaries of inequality using their wealth to
prevent the political authorities from intervening in those ways. When both
tendencies prevailed, the resulting extreme inequalities eventually brought the
economy and society to crisis. Jubilee, it was thought, was the ultimate
mechanism the last political resort that was also sanctified by religion - that
could forestall crisis by canceling or reversing such extremes.
Pre-capitalist economies based on individual farmers or slaves or feudal serfs
often contained their tendencies toward inequality for centuries. Eventually,
however, the beneficiaries of rising inequality blocked political authorities from
mitigating inequalities. As the latter then worsened, the question was whether
jubilee would re-emerge as the last-resort solution. When jubilee was forgotten,
ignored, or repressed, such societies economies descended into extreme
inequalities of wealth and income. Crises followed that could and sometimes did
dissolve social cohesion and provoke revolutionary transitions to differently
structured societies and economies.
Capitalism is no different. In the US, for example, economic inequality is reaching
extremes not seen since the end of the 19 th century. The reversal of inequality
provoked by the Great Depression proved temporary. Even the crisis since 2007,
the worst since the 1930s, has not deflected the US from its descent into
extreme inequalities (as illustrated by the following chart from Too Much):

As Thomas Pikettys and Emanuel Saezs works have shown empirically,

capitalism displays powerful, enduring tendencies toward ever greater
inequalities. When these have approached extremes in the past, crises emerged
that sometimes provoked reverse tendencies from political authorities.
Considerations of jubilee were avoided. For example, income and wealth
redistributions occurred during the Great Depression of the 1930s and/or after
World War 2 with labels like the New Deal or Social Democracy. Yet they were
soon slowed and then mostly stopped.
By the 1970s, capitalisms underlying tendencies toward inequality reasserted
themselves visibly. This occurred together with the strong ideological backlash of
neo-liberalism. Against the redistributive New Deal and social democracy, neoliberalism justified and rationalized the disengagement of the political authorities
(led by Thatcher and Reagan) from redistributive projects everywhere.
The post-1970s increasing economic inequality had a specific geographic
character. Capitalist enterprises relocated away from their old centers in western

Europe, north America and Japan. Where modern capitalism had first developed,
it concentrated factories, offices and stores. They drew food, raw materials, and
laborers to those centers (urban and industrial) from their immediate hinterlands
(rural and agricultural). They sold their outputs to those hinterlands. When
capitalisms old centers outgrew their immediate hinterlands, colonialism and
imperialism reorganized the rest of the world into a peripheral hinterland.
Before the post-1970s relocation, modern labor movements and socialism had
struggled for and won rising real wages in capitalisms old centers. Elsewhere
societies were disrupted or destroyed by their reorganization into peripheral
hinterlands. Wages and living standards there often deteriorated. In any case
they fell ever further behind their rising levels in capitalisms old centers.
The 1970s also saw major technical changes. Among them, jet air travel and
modern telecommunications enabled more rapid enterprise relocations.
Capitalists headquartered in the old centers could visit, monitor and control
production and distribution facilities far removed in regions offering much lower
wages, minimal government regulations and taxes, etc. The profit potential was
huge. The first who relocated and realized such profits made it competitively
necessary for others to follow.
Relocations results were rising inequalities across most of global capitalism. In
the old centers real wage growth stagnated or reversed over the last 40 years. In
most of the new centers (e.g., China, India, Brazil, and so on), disproportionate
shares of their newly expanding wealth went to the richest. Inequality grew there
despite rising real wage levels (also because much smaller shares of the
population were wage-earners).
In general, rising inequality flows from the excess of productivity growth over
real wage growth: when what workers labors provide to employers rises faster
than what employers pay to those workers. The ILO Global Wage Report
2014/2015 shows this for developed countries in the following graph:

Employers do not return that excess to the workers who produce it. Rather they
distribute it among small minority portions of the population. Hence inequality
grows. When employers deploy that excess to control political authorities,
redistribution is blocked, limited, or rendered too small to reverse the growing
inequality.
Contemporary societies show few signs of ideological shifts that might return
jubilee to the consciousness let alone the policy agendas of political
authorities. The austerity regimes imposed in so many countries represent
quite the opposite. Political authorities refuse policies that would reverse the
growing inequality of recent decades. Despite the crisis since 2007 and even
when authorities are laborite or socialist, they evidently believe that
redistributive reversals are impracticable or ineffective or unnecessary. It is
as if political leaders, mass media, and most academics had acquired some
universal absolute truth: austerity is necessary while jubilee is absurd. Such are
the power and rigidity, on occasion, of ideological commitment.
Yet contrary voices are raising warnings. In December, 2014, an OECD report
called Focus on Inequality and Growth concluded that rising inequality across 21
countries was definitely associated with slowing economic growth. The
aforementioned ILO report showed that by 2013, the global real wage growth
rate had dropped by a third from its pre crisis (i.e. pre-2007) levels.
Other voices raised other sorts of critiques. Detroit residents offer their living
conditions as consequences of the last 40 years deepening inequality. Thus,
United Nations officials found violations of basic human rights in 2014 when
Detroit failed to provide water to its poorest citizens. Voter shifts in Greece,
Spain, Ireland and elsewhere show rising opposition to inequality. Spanish
conservatives seek new repressive laws to ban protests of economic inequality
and the policies that worsen them.
Old political monopolies wielded jointly by alternating center-left and center-right
parties are dying. Increasingly, new, further left and further right groupings
struggle against one another and a shrinking center. A new Pope acknowledges
the injustice of growing inequality and tries to distance his church from it.
Others react to deepening economic inequality by not questioning or opposing
the institutions whose mechanisms and decisions generate the problem: large
capitalist enterprises, the market, and the politicians beholden to them. Instead
they seek and find scapegoats: immigrants; racial, ethnic, or religious minorities;
the poor; terrorists, and so on. Often police are summoned to manage
problems arising from deepening inequality and its social effects. When that task
exceeds their capabilities, their actions often aggravate instead of manage.
In retrospect, those who developed jubilee understood something important even
if their solution missed the basic changes needed. Yet these days, instead of
considering jubilee, it is denial that spreads alongside the inequality and its

negative social effects. Some deny the inequality exists and worsens while
others deny those effects.
Of course, as 2015 begins, amidst the deepening of already extreme inequality,
an article like this could choose between embracing jubilee versus denial. The
former turns the clock back, re-apportions economic resources, and restarts the
same systems drive to inequality while the latter pretends that drive does not
exist or matter much. Yet both of those options leave the basic economic system
unquestioned.
It strikes this writer as better to explore and pursue basic social changes that can
deal with the problem of economic inequality at its base. To take one example,
what can and should be changed is the organizational structure of the
enterprises that produce the goods and services on which all societies depend. A
transformation of enterprises from top-down hierarchies into genuinely
democratic institutions could better address the central modern problem of
economic inequality (Wolff 2012).