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When ‘the state made war’, what happened to economic inequality? Evidence from preindustrial Germany (c.1400-1800)

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  • Schaff, Felix

Abstract

What was the impact of military conflict on economic inequality? This paper presents new evidence about the relationship between military conflicts and economic inequality in preindustrial Germany, between 1400 and 1800. I argue that ordinary military conflicts increased economic inequality. Warfare raised the financial needs of towns in preindustrial times, leading to more resource extraction from the population. This resource extraction happened via inegalitarian channels, such as regressive taxation. The Thirty Years’ War was a unique exception to that pattern but not the rule. To test this argument a novel panel dataset is constructed combining information about economic inequality in 72 localities and 687 conflicts over four centuries. The analysis suggests that there existed two countervailing effects of conflicts on inequality: destruction and extraction. The Thirty Years’ War was indeed a “Great Leveller” (Scheidel 2017), but the many ordinary conflicts – paradigmatic of life in the preindustrial world– were continuous reinforcers of economic inequality.

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  • Schaff, Felix, 2020. "When ‘the state made war’, what happened to economic inequality? Evidence from preindustrial Germany (c.1400-1800)," LSE Research Online Documents on Economics 107046, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:107046
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    More about this item

    Keywords

    wealth; inequality; warfare; institutions; political economy; Germany;
    All these keywords.

    JEL classification:

    • N33 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: Pre-1913
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • N43 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: Pre-1913
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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