Explore Econ: The meaning of equality and growth in the Golden Age

1. Suppose that you could choose to be born in any country in the world, and at any point in history. You cannot however choose your position in the income distribution of that country at that time. Where and when would you choose to be born and why?

The meaning of equality and growth in the Golden Age

Throughout pre-Industrial history, there were very few sparks of economic growth. The exceptions include Greek city-states at their zenith in the fifth century BC, especially Athens. This city of Aristotle and Plato is the cradle of democracy and my idea of a birthplace, despite hiding a darker side of militarism and self-proclaimed supremacy.

Professor Josiah Ober finds the driving force of their growth in rule to be egalitarianism — “relatively open and equal access to institutions.” (Ober 2016, p.8-9). Together with a less defined hierarchy, it incentivised Athenians to invest in their skills. Furthermore, the environment of enforceable laws, progressive or indirect taxation, and flourishing foreign trade enabled Athenians’ risky entrepreneurial decisions to be more likely to pay off. This reduced the inequality to a Gini coefficient of 0.38 (illustrated in Figure 1). Such a Gini is surprisingly low and even comparable to modern Lithuania (0.37) or the US (0.39), but considerably higher than Norway (0.27), the country with the highest living standards. (OECD 2015).

It is reasonable to conclude that consumption and living standards were rising with growth and equality. They were also a major concern of the leader Pericles, even if only to make the citizens satisfactorily play their roles in the state or fall in his wars (Samons, 2007). Archaeological evidence suggests that the average life expectancy went up, as did the citizens’ material wealth measured by median house sizes (see Figure 2, Morris 2004, p.714-715, p.720-723). Unfortunately, this measure is difficult to apply to today’s world. People no longer live in spacious villas and, for example, the median home size in the UK in 2009 was only 78 square meters (DATA.GOV.UK 2011) – similar to the level at the beginning of the Greek expansion.

It is often ignored that democracy and wisdom blossomed in the background of wars and the oppression of non-Athenians. Being born in Athens in the fifth century would allow me to profit from the institutions and have a say in political decisions. Notwithstanding, my existence would always only be equal to one little cell in the organism, bound to work and ready to die for the benefit of the state.

Daniel Drobik


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