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Property - Global Variation And Convergence

inequality inheritance countries economic

When people discuss global variations in property, they are usually speaking either about differences in how property is distributed, or about differences in how property rules are formulated.


The question of the distribution of property is the question of inequality. There is no one factor that explains why some countries have more equal property distributions than others, as can be seen by taking income as the representative measure for all property. Some of the most egalitarian countries in the world (such as Hungary and Slovakia) have a tradition of equality that has persisted throughout large transformations in their political and economic systems. Other countries, for example those in Scandinavia, achieved greater equality through determined political reform. The most remarkable decline in inequality in the twentieth century was accomplished in socialist Cuba, which under Fidel Castro, who came to power in 1959, leveled its property holdings to a degree unparalleled in the Americas.

Among the major economic powers, Japan has the most equal distribution of income and the United States the most unequal. Inequality increased in the United States during the period of conservative ascendancy that began in the 1970s, and this growth of inequality appears to be related to a general strengthening of property laws. Latin America, dominated by entrenched landowning elites, is the most consistently unequal region of the world. Many African countries, struggling with failed governments, are also highly unequal in their distributions of property—as is South Africa, which in the early twenty-first century was only slowly recovering from decades of apartheid. Several nations in Southeast Asia are marked by inequality that runs along ethnic lines, with the greater riches of minority ethnic Chinese communities being a perennial source of social friction.

Finally, the world itself is a very unequal place. The level of inequality across the globe is greater even than the inequality within the most unequal large country (Brazil). According to the economist Branko Milanovic the richest 10 percent of individuals in the world control fifty times more of global income than do the poorest 10 percent of individuals, and the richest 1 percent of humankind receives more income in a year than does the poorest 50 percent. There are lively debates over whether this global inequality is increasing or decreasing, and over the impact of globalization on inequality. The only safe conclusion to be drawn from these debates is that different conclusions about trends and impacts will be reached depending on the data that are used and the income brackets that are compared.

The distribution of property has a profound influence on almost all aspects of human life. One window into this conclusion is the robust causal connection between levels of inequality and human health. There are reliable data from within the wealthiest countries showing the influence of inequality on health outcomes. In all rich countries, the rich are much healthier than the poor. Moreover, the more unequal a country is in its property distribution, the more unequal it will be in the distribution of health. Interestingly, "middle" groups in rich countries with high inequality are less healthy than middle groups in rich countries with low inequality. Moreover, creating a more equal distribution of property makes the poor healthier without making the rich less healthy. When considering the global correlation between inequality and health, it is evident that the citizens of rich countries are on average much healthier than the citizens of poor countries. Further, as the medical anthropologist Paul Farmer has shown, poor individuals are much less healthy than rich individuals wherever they live. Regardless of where in the world they live, the poor tend to die younger from infectious diseases and violence, while the rich tend to die older from chronic conditions.

Property rules: capitalism.

Beyond the question of the distribution of property is the question of global variations in how property rules are formulated. Looking at the world as a whole, by far the most important change in political economy since World War II is the transition to the near-universal acceptance of the legitimacy of private property in the means of production. This is a tremendous intellectual shift. The contrast between communist and capitalist countries, which defined half a century of world history, has vanished in most places and is vanishing in the rest. Even the Chinese constitution in the early 2000s requires that the right of private property be secured. The fates of the many millions of people who have made (and are making) the transition from a communist to a capitalist economy have been varied. On the one hand, the rapid privatization of state property in the former Soviet Union has been accompanied by a plunge in living standards to levels that are shocking within Europe. On the other hand, the gradual introduction of private property norms into the Chinese economy since the late 1970s has resulted in what is probably the greatest aggregate increase in well-being in human history.

The explanations for this remarkable global convergence on the legitimacy of private property in the means of production cluster around two poles: the political and the economic. Private property is associated with certain kinds of individual political freedom. One type of explanation for the transition to capitalism, emphasized by the historian Richard Pipes, is that the central control characteristic of communist states became intolerable to those wishing more individual control over the politics and less political intrusion into private life. The other cluster of explanations is economic. Communism is simply less efficient than is capitalism at generating the goods and services that people want. The leading theorist of the inefficiency of communist economies was the Austrian economist F. A. Hayek (1899–1992). Hayek's central insight was that the information about how and what an economy should produce is dispersed among millions of individuals, and that it is much less efficient to attempt to move this information to a central source of economic control (as state ownership systems do) than it is to disperse economic control to the individuals who have the information (as private property systems do).

Property rules: inheritance.

Even though private property in the means of production has emerged as the global norm, there are still major variations among countries regarding more specific property rules. One of the most revealing dimensions of variation runs through the laws of inheritance. Inheritance laws are the site of several conflicting values. Parents tend to want to pass their property along to their children, either because this property is special to the family's history or because the parents wish to increase their children's economic security. Yet inheritance laws also permit or even require various forms of inequality to persist across generations, the most significant of these being inequalities between families and between genders. The way that a society frames its laws of inheritance reveals much about its social priorities.

The Islamic law of inheritance derives from the pronouncements of the Prophet in the Koran, which have spurred highly elaborated interpretations. All of the schools of interpretation agree that Islamic law requires a daughter to be given part of an inheritance (a very progressive rule in the Prophet's day), but restricts her share to one-half of what a son receives (which does not satisfy liberals in the early twenty-first century). Also notable in Islamic law are the strict limitation of inheritance to blood relations, and the prohibition on Muslims either bequeathing to or inheriting from those outside the faith. In countries where Islamic law is the basis of national law, one interpretation or another of the Koranic injunctions is codified. In India, on the other hand, the Islamic law of inheritance applies within Muslim communities but not elsewhere. The inability of India to generate a uniform civil code that would bind both the Muslim minority and the Hindu majority (as well as Buddhists, Jains, and Sikhs) is a symptom of the deep social differences that continue to divide this vast and sometimes volatile nation.

Among the Tswana tribes of Botswana, the rules of inheritance perpetuate the prevailing economic, familial, and gender relations. Most of the tribes are patrilineal, meaning descent is traced through the males. In these tribes the wealth of the family (mostly cattle) is kept within the family by passing most of it to the eldest son. Interestingly, in some of these tribes the rule is that ownership of the family home passes to the youngest son, thereby ensuring that a widowed mother will be supported even if the eldest son moves away, and so that the traditional family homestead will be preserved. Other Tswana tribes are matrilineal. In these tribes it is still a male who inherits the cattle, but it is the oldest son of the oldest sister, not the son, who receives the main inheritance. Here again is seen the property rules sustaining, and even defining, the most basic social relationships over time.

Primogeniture (which vests ownership of land in the oldest son) is especially rewarding as a subject for investigation, because its presence correlates to important features in a society's economy. A Marxist thesis states that changes in political and economic rules will tend to follow developments in methods of production: as Karl Marx (1818–1883) himself said, the hand mill gives you society with a feudal lord, the steam mill, society with the industrial capitalist. The history of primogeniture tends to bear out this hypothesis. In the English feudal period arable land was the most productive asset, yet land was limited and required large estates to be worked effectively (to divide it was to ruin it, as the Scottish economist Adam Smith [1723–1790] remarked). Primogeniture ensured that an estate would remain intact, instead of dissipating the land into inefficient smaller parcels by dividing it among sons. These same economic facts also obtained in Japan during the period of domination by the samurai class, and again in Japan primogeniture defined the rules of inheritance. By contrast, primogeniture was never widely adopted in eighteenth-and nineteenth-century American law. This can be explained by the much greater availability of arable land in America (reducing the need to require a specific form of inheritance) and the increased importance there of industrial and financial capital (the ownership of which can be divided without similarly reducing productive efficiency).

The form of inheritance laws in a society are not only responsive to epochal trends in methods of production, they are also of first importance for explaining the specific character of that society at any time. For example, at the turn of the twenty-first century blacks in the United States faced far greater risks of poverty, unemployment, and imprisonment than did whites. The sociologist Thomas Shapiro argues in a 2004 book that the main explanation for this is that these blacks inherited much less wealth than did their white counterparts. Because blacks inherited less, their opportunities were fewer and they were less likely to be able to withstand the economic shocks that are a part of life in a modern economy. Moreover, this racial disparity in wealth can be expected to increase over time, as whites build up greater capital between generations at a much faster rate. Different rules of inheritance would produce different patterns of social inequalities between the races.

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