ABSTRACT
The devastating trends in social and economic inequality in developed industrialized nations have been a subject of a growing body of literature, economic and non-economic alike (see Piketty 2014; Taibbi 2014; Stiglitz 2013; Reich [2011] 2013; Wilkinson and Pickett 2010). While the experience of the Great Recession and the ensuing discussion of grotesque inequality has made it obvious that the present trends in rising income and wealth disparities are unsustainable and must be contained and reversed, few scholars have examined the nature of socio-economic inequality itself. Was the rise of inequality part of a natural and, thus, inevitable progression of societies? Is inequality a natural and, hence, unavoidable trait of socio-economic organization? For those who thought that inequality was natural and inescapable, John Henry (2004) presents a convincing account of the not-so-natural rise of socio-economic disparities and classes in Ancient Egypt. In fact, Henry’s contribution clearly demonstrates that the rise of inequality in Ancient Egypt was more akin to an accident of history (though a gradually occurring one), rather than history’s natural progression. Having emerged accidentally, inequality came to be cemented, perpetuated and widely accepted as a ‘normal’ and, thus, ever-present characteristic of societies. The role of ideology in rationalizing and maintaining the status quo in unequal societies is an issue Henry tackles with no less equal passion than the rise of inequality itself (see Henry 1990). Henry examines the rise of such ideology in Western societies, including John Locke’s elaborate theoretical justification of unequal distribution of wealth (see Bell et al. 2004). In his case study of Ancient Egypt, Henry (2004) shows how religious ideology played a crucial part in justifying the newly emerging hierarchical social structures. The final and critical point Henry makes is that the rise of class society and inequality took place alongside the emergence of money, whereby money played a key role in establishing, maintaining, and exacerbating inequality and class division in societies (see Henry 2004). To put it simply,
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as soon as one witnesses the emergence of money, one observes the rise of class society and socio-economic inequalities. Money, class society, and inequality came into being simultaneously, so it seems, mutually reinforcing the development of one another. We believe that Henry’s account of the rise of money, social classes, and inequality in Ancient Egypt has important implications for today’s discourse on growing income and wealth disparities in developed industrialized economies. First and foremost, there is nothing natural about the existence of socio-economic inequality. Second, the current trends in income and wealth disparities could and should be reversed. While we do not argue that perfect equality is possible or even desirable in developed industrialized societies (for reasons that are beyond the scope of this chapter), we do contend that the current state of income inequality could and should be remedied via the use of modern money for public purpose following the principles of Modern Money Theory (MMT) (see Wray 2012a, 2014a, 2014b, 2014c, 2014d). The above propositions inevitably lead us to the discussion of money, its origins and nature, and the underlying link between money, authorities, and inequality. While it is true that money, inequality, and class society developed hand in hand, mutually reinforcing the emergence and consolidation of one another, the inequality-inducing characteristic of money could be greatly (though far from entirely) subverted and undermined, if money were to be used according to the principles of MMT. If used according to the principles of MMT, money could serve the greater public purpose of improving the living standards of the majority of the population of this planet. Thus, rather than doing away with the institution of money, MMT proposes to finally make this institution serve the greater public good. In what follows, we will begin with a discussion of the nature of money, presenting two contending perspectives on the subject-Chartalism and Metallism-devoting more attention to the former. In doing so, we will summarize the contributions of a handful of major thinkers whose work was instrumental in the development of the Chartalist approach. We will then present two historical case studies of money’s origins-in Ancient Greece and Ancient Egypt-demonstrating the reciprocal relationship between the rise of money, class society, and inequality. It will be shown that religious and other ideology played a crucial role in the rise of money, classes, and inequality in both regions examined. This chapter concludes with a brief discussion of the use of modern money for public purpose, such as the reversal of the current trends in income and wealth disparities, following the principles of MMT.
