Disruption

A hungry chant sounded across China’s sun-scorched plains in the summer of 18 CE:” Heaven has gone deaf”! Hundreds of starving producers, their faces smeared with animal body, marched toward the lavish vaults held by the Han kingdom’s elite rulers.

These farmers ‘ calloused hands held bamboo scrolls, which were ancient tweets accusing the bureaucrats of hoarding grain while the farmers ‘ children gnawed tree bark, as described in the ancient text Han Shu ( Book of Han ). The republic’s firebrand warrior leader, Chong Fan, roared:” Discharge the paddies”!

Within days, the Red Eyebrows, as the demonstrators became known, had toppled regional governments, raided granaries and – for a brief moment – shattered the emperor’s firm order.

One of the most advanced societies of its day, close to the Roman Empire, was the Han dynasty of China ( 202 BCE to 220 CE). Its growth of cheaper and sharper metal plows enabled the meeting of extraordinary harvests of corn.

However, this scientific revolution resulted in economic oligarchs who hired even more officials to control their expanding empire rather than encourage farmers. Immediately, officials earned 30 days more than those tilling the soil.

And when floods struck, the farmers and their families starved while the emperor’s leaders maintained their magnificence. The legs of the frozen dead are found by the roadside, according to a well-known song from the following Tang kingdom.

Two millennia afterwards, the role of technology in increasing injustice around the world remains a significant political and societal problem. The problematic efforts of Donald Trump’s new leadership in the US create an artificial intelligence “technology panic” that reinforces this perception. New technology is destroying ancient certainties, populist rebellion is shredding the social consensus.

And yet, as we stand at the edge of this technological rock, evidently peering into a prospect of AI-induced work apocalypses, history whispers:” Quiet over. You have previously been around.

The connection between systems and inequality

Humanity’s secret weapon for escaping lack is systems. The Han empire’s metal plow didn’t really till soil, it doubled crop yields, enriching landlords and swelling tax coffers for emperors while – first, at least – leaving peasants farther on.

Similarly, Britain’s steam engine didn’t just spin cotton, it built coal barons and factory slums. AI is still using its trillion-dollar tech hegemony while destroying myriads of mundane jobs, not just automating tasks.

Technology amplifies productivity by doing more with less. These gains over the centuries have accumulated, increasing economic output and extending lives and increasing incomes. But each innovation reshapes who holds power, who gets rich – and who gets left behind.

As the Austrian economist Joseph Schumpeter warned during the Second World War, technological progress is never a benign rising tide that lifts all boats. It’s more like a tsunami that, in a process he called” creative destruction,” topples some and places others on beautiful beaches.

A decade later, Russian-born US economist Simon Kuznets proposed his “inverted-U of inequality”, the Kuznets curve.

This provided a reassuring narrative for citizens of democratic countries seeking greater justice: inequality was an inevitable but temporary price of technological advancement and the economic growth that came with it.

In recent years, however, this analysis has been sharply questioned. Most notably, French economist Thomas Piketty, in a reappraisal of more than three centuries of data, argued in 2013 that Kuznets had been misled by historical fluke. He had observed that the postwar decline in inequality was not a general law of capitalism but a result of special circumstances, including two world wars, economic depression, and significant political reforms.

In normal times, Piketty warned, the forces of capitalism will always tend to make the rich richer, pushing inequality ever higher unless checked by aggressive redistribution.

Who is correct, then? And where does this leave us as we ponder the future in this latest, AI-driven industrial revolution? In fact, both Kuznets and Piketty were working off quite narrow timeframes in modern human history.

Due to its historical continuity, cultural stability, and ethnic uniformity, another nation, China, gives the opportunity to study patterns of growth and inequality over a much longer period.

Unlike other ancient civilizations such as the Egyptians and Mayans, China has maintained a unified identity and unique language for more than 5, 000 years, allowing modern scholars to trace thousand-year-old economic records. I set out with my coworkers Qiang Wu and Guangyu Tong to reconcile the theories of Kuznets and Piketty by studying technological development and wage inequality in imperial China for 2, 000 years, starting with Jesus ‘ birth.

To do this, we scoured China’s extraordinarily detailed dynastic archives, including the Book of Han ( AD111 ) and Tang Huiyao ( AD961 ), in which meticulous scribes recorded the salaries of different ranking officials. And here is what we learned about the forces – good and bad, corrupt and selfless – that most influenced the rise and fall of inequality in China over the past two millennia.

Chinese dynasties and the most potent technologies they used:

China’s cycles of growth and inequality

One of the challenges of assessing wage inequality over thousands of years is that people were paid different things at different times– such as grain, silk, silver and even labourers.

According to The Book of Han,” a governor’s annual grain salary could fill 20 oxcarts.” Another entry describes how a mid-ranking Han official’s salary included ten servants tasked solely with polishing his ceremonial armour. Qing elites hid their wealth in land deals, while Ming dynasty officials received their bleak salaries with silver supplements.

To enable comparison over two millennia, we invented a “rice standard” – akin to the gold standard that was the basis of the international monetary system for a century from the 1870s. Rice is not just a staple of Chinese diets, it has been a stable measure of economic life for thousands of years.

Although rice was once the source of much of Chinese life around 7, 000 BC in the Yangtze River’s fertile marshes, it wasn’t until the Han dynasty that it came into being. Farmers prayed to the” Divine Farmer” for bountiful harvests, and emperors performed elaborate ploughing rituals to ensure cosmic harmony. No rice in the bowl, bones in the soil, a proverb from the Tang dynasty was a wise counsel.

Using price records, we converted every recorded salary – whether paid in silk, silver, rent or servants – into its rice equivalent. We could then compare the “real rice wages” of two categories of people we called either “officials” or “peasants” ( including farmers ), as a way of tracking levels of inequality over the two millennia since the start of the Han dynasty in 202 BC.

Our rice-based analysis demonstrates how real-wage inequality has increased and decreased in China over the past 2, 000 years.

Official-peasant wage ratio in imperial China over 2, 000 years:

The chart’s black line describes a tug-of-war between growth and inequality over the past two millennia. We discovered that there were four main factors, among those that controlled each of China’s major dynasties: social norms ( S), institutions ( I ), politics ( P), and technology ( T ). These followed the following cycle with remarkable regularity.

1. Technology triggers an explosion of growth and inequality

During the Han dynasty, new iron-working techniques led to better ploughs and irrigation tools. The Chinese empire expanded both in terms of territory and population as a result of the boom in harvests. But this bounty mostly went to those at the top of society. While ordinary farmers saw little benefit from landlords grabbing fields, bureaucrats gaining privileges, and so on. The empire grew richer – but so did the gap between high officials and the peasant majority.

Even when the Han fell around AD 220, the rise of wage inequality was barely interrupted. China was in the middle of a golden age during the Tang dynasty ( AD 618–907 ). Silk Road trade flourished as two more technological leaps had a profound impact on the country’s fortunes: block printing and refined steelmaking.

The mass production of books, including Buddhist texts, imperial exam guides, and poetry anthologies, was made possible by block printing at an unprecedented rate and scale. This helped spread literacy and standardise administration, as well as sparking a bustling market in bookselling.

Meanwhile, refined steelmaking boosted everything from agricultural tools to weaponry and architectural hardware, lowering costs and raising productivity. China’s economy reached new heights thanks to a more educated populace and a large supply of stronger metal goods. Chang’an, then China’s cosmopolitan capital, boasted exotic markets, lavish temples, and a swirl of foreign merchants enjoying the Tang dynasty’s prosperity.

The Tang dynasty established the highest levels of inequality in Chinese history, but subsequent dynasties would still face the same fundamental problem: how can you reap the rewards of growth without allowing an overly privileged and increasingly corrupt bureaucratic class to place everyone else in danger?

2. Institutions slow the rise of inequality

Some institutions throughout the two millennia played a significant role in stabilizing the empire following each boom in growth. For example, to alleviate tensions between emperors, officials and peasants, imperial exams known as” Ke Ju” were introduced during the Sui dynasty ( AD 581-618 ). And by the time of the Song dynasty ( AD 960-1279 ), which followed the end of the Tang, these exams were a significant part of society.

They addressed high levels of inequality by promoting social mobility: ordinary civilians were granted greater opportunities to ascend the income ladder by achieving top marks. This induced greater competition among officials – and strengthened emperors ‘ authority over them in the later dynasties. As a result, as their bargaining power gradually decreased, both the salaries of officials and wage inequality decreased.

However, the rise of each new dynasty was also marked by a growth of bureaucracy that led to inefficiencies, favouritism and bribery. As many officials demanded informal fees or outright bribes to support their lives, corrupt practices gradually eroded trust in officialdom and increased wage inequality.

As a result, while the emergence of certain institutions was able to put a break on rising inequality, it typically took another powerful – and sometimes highly destructive – factor to start reducing it.

3. Political conflict and external conflicts lessen inequality.

Eventually, the rampant rise in inequality seen in almost every major Chinese dynasty bred deep tensions – not only between the upper and lower classes, but even between the emperor and their officials.

As each dynasty engaged in wars in an effort to advance, these pressures were made even more acute by the pressures of external conflict. The Tang’s three century-rule featured conflicts such as the Eastern Turkic-Tang war ( AD 626 ), the Baekje-Goguryeo-Silla war ( 666 ), and the Arab-Tang battle of Talas ( 751 ).

The resulting demand for more military spending drained imperial coffers, forcing salary cuts for soldiers and tax hikes on the peasants – breeding resentment among both that sometimes led to popular uprisings. The imperial court then cut off officials ‘ pay and eliminated their bureaucratic benefits in a desperate survival bid.

The result? In these periods of war and rebellion, inequality plummeted, but so did stability. Famine was rife, frontier garrisons mutinied, and for decades, warlords carved out territories while the imperial centre floundered.

So, this shrinking wage gap cannot be said to have resulted in a happier, more stable society. Instead, it reflected the perception that everyone, rich and poor, was living in a chaotic environment. During the final imperial dynasty, the Qing ( from the end of the 17th century ), real-terms GDP per person was dropping to levels that had last been seen at the start of the Han dynasty, 2, 000 years earlier.

4. Social norms emphasize harmony, preserve privilege

One other common factor influencing the rise and fall of inequality across China’s dynasties was the shared rules and expectations that developed within each society.

The social norms that underlie the Neo-Confucianism philosophy that permeated the Song dynasty at the end of the first millennium, which is sometimes referred to as China’s version of the Renaissance, are a striking example.

It blended the moral philosophy of classical Confucianism – created by the philosopher and political theorist Confucius during the Zhou dynasty ( 1046-256BC ) – with metaphysical elements drawn from both Buddhism and Daoism.

Neo-Confucianism placed a premium on social harmony, hierarchical order, and personal virtue, which strengthened imperial authority and bureaucratic discipline. Unsurprisingly, it quickly gained the support of emperors keen to ensure control of their people, and became the mainstream school of thought in the Ming and Qing dynasties.

However, Neo-Confucianist thinking proved a double-edged sword. This moral authority was taken over by local gentry to strengthen their own position. Clan leaders set up Confucian schools and performed elaborate ancestral rites, projecting themselves as guardians of tradition.

These social norms grew rigid over time. What had once fostered order and legitimacy became brittle dogma, more useful for preserving privilege than guiding reform. Neo-Confucian ideals evolved into a protective veil for entrenched elites. They offered little resilience when the stress of the crisis eventually arrived.

The last dynasty

The Qing, China’s most important imperial dynasty, fell victim to numerous uprisings both inside and outside. Despite achieving impressive economic growth during the 18th century – fuelled by agricultural innovation, a population boom, and the roaring global trade in tea and porcelain – levels of inequality exploded, in part due to widespread corruption.

The infamous government official Heshen, widely regarded as the most corrupt figure in the Qing dynasty, amassed a personal fortune reckoned to exceed the empire’s entire annual revenue ( one estimate suggests he amassed 1.1 billion taels of silver, equivalent to around US$ 270 billion, during his lucrative career ).

Imperial institutions failed to stop the inequality and moral decay that the Qing’s growth had initially stifled. The mechanisms that once spurred prosperity – technological advances, centralised bureaucracy and Confucian moral authority – eventually ossified, serving entrenched power rather than adaptive reform.

When shocks like foreign invasions and natural disasters struck, the system was unable to adjust. The collapse of the empire became inevitable – and this time there was no groundbreaking technology to enable a new dynasty to take the Qing’s place.

Nor were there fresh social ideals or revitalized institutions capable of rebooting the imperial model. China’s imperial system collapsed under the weight of its own weight as foreign powers advanced with their own technological advancements. The age of emperors was over.

The situation had changed. As China embarked on two centuries of technological and economic stagnation – and political humiliation at the hands of Great Britain and Japan – other nations, led first by Britain and then the US, would step up to build global empires on the back of new technological leaps.

In these modern empires, we see the same four key influences on their cycles of growth and inequality – technology, institutions, politics and social norms– but playing out at an ever-faster rate. According to the proverb, history does not repeat itself, but it frequently rhymes.

Rule Britannia

If the rice and rebellions that made up the imperial China’s inequality saga, the industrial revolution in Britain featured steam and strikes. In Lancashire’s” satanic mills”, steam engines and mechanised looms created industrialists so rich that their fortunes dwarfed small nations.

In 1835, social observer Andrew Ure enthused:” Machinery is the grand agent of civilisation”. The new industrial class has been disproportionately enriched by steam engines, spinning jennies, and railroads for many decades, just as the Han dynasty of China did 2, 000 years ago. The workers? When the Luddites began destroying their looms in 1811, they inhaled soot, lived in slums, and staged Europe’s first symbolic protest.

During the 19th century, Britain’s richest 1 % hoarded as much as 70 % of the nation’s wealth, while labourers toiled 16-hour days in mills. In cities like Manchester, child workers earned pennies while industrialists built palaces.

However, as inequality grew to its highest level in Britain, the backlash grew. Trade unions formed ( and became legal in 1824 ) to demand fair wages. Child labor was outlawed and working hours were capped in the Factory Acts ( 1833–1878 ).

Although government forces intervened to suppress the uprisings, unrest such as the 1830 Swing Riots and 1842 General Strike exposed deep social and economic inequalities. By 1900, child labour was banned and pensions had been introduced. The Labour Representation Committee of 1900 ( later the Labour Party ) vowed to “promote legislation in the direct interests of labor,” a striking analogy to how China’s imperial exams had attempted to elude power.

Slowly, the working class saw some improvement: real wages for Britain’s poorest workers gradually increased over the latter half of the 19th century, as mass production lowered the cost of goods and expanding factory employment provided a more stable livelihood than subsistence farming.

The Blitz didn’t discriminate between wealthy and poor neighborhoods, so two world wars flattened Britain’s elite. When peace finally returned, the Beveridge Report gave rise to the welfare state: the NHS, social housing, and pensions.

Income inequality plummeted as a result. By 1979, the share of the top 1 % had fallen from 70 % to 15 %. While China’s inequality fell via dynastic collapse, Britain’s decline resulted from war-driven destruction, progressive taxation, and expansive social reforms.

Top 1 % of the UK’s wealth market

However, from the 1980s onwards, inequality in Britain has begun to rise again. Another technological revolution that has come to mind is the development of personal computers and information technology, innovations that have fundamentally altered how wealth was created and distributed.

The era was accelerated by deregulation, deindustrialisation and privatisation — policies associated with former prime minister Margaret Thatcher, that favoured capital over labour. Trade unions were weakened, income taxes on the highest earners were slashed, and financial markets were unleashed. The richest 1 % of UK adults currently own more than 20 % of the country’s total wealth.

The UK now appears to be in the worst of both worlds – wrestling with low growth and rising inequality. However, it’s still possible to get old. The current UK government’s pledge to streamline regulation and harness AI could spark fresh growth – provided it is coupled with serious investment in skills, modern infrastructure, and inclusive institutions geared to benefit all workers.

At the same time, history reminds us that technology is a lever, not a panacea. Only when institutional reform and social attitudes change in tandem with innovation can sustained prosperity be achieved.

The American century

While China’s growth-and-inequality cycles spanned over a millennium and Britain’s over centuries, America’s story is a fast-forward drama of cycles lasting only a few decades. In the early 20th century, several waves of new technology widened the gap between rich and poor dramatically.

By 1929, as the world teetered on the edge of the Great Depression, John D. Rockefeller had amassed such a vast fortune – valued at roughly 1.5 % of America’s entire GDP – that newspapers hailed him the world’s first billionaire. His wealth was largely attributable to his pioneering oil and petrochemical ventures, including Standard Oil, which dominated oil refining in a time when cars and mechanized transportation were exploding in popularity.

Yet this period of unprecedented riches for a handful of magnates coincided with severe imbalances in the broader US economy. Although the “roaring Twenties” had encouraged consumer and stock speculation, wage growth for many workers lagged behind skyrocketing corporate profits. By 1929, the top 1 % of Americans owned more than a third of the nation’s income, creating a precariously narrow base of prosperity.

When the US stock market crashed in October 1929, it laid bare how vulnerable the system was to the fortunes of a tiny elite. Millions of regular Americans experienced immediate hardship, ushering in the Great Depression, because they had no savings or protections at their disposal. Breadlines snaked through city streets, and banks collapsed under waves of withdrawals they could not meet.

President Franklin D. Roosevelt’s New Deal transformed American institutions in response. It introduced unemployment insurance, minimum wages, and public works programmes to support struggling workers, while progressive taxation – with top rates exceeding 90 % during the second world war. Roosevelt declared:” The test of our progress is not whether we add more to the abundance of those who have much – it is whether we provide enough for those who have too little”.

The Second World War acted as a great leveller for the US, creating millions of jobs and enticed women and minorities into sectors that they had long been untapped. After 1945, the GI Bill expanded education and home ownership for veterans, helping to build a robust middle class. Although access remained unaffected, particularly among racial groups, the era saw a shift away from the accepted notion that prosperity should be shared.

Meanwhile, grassroots movements led by figures like Martin Luther King Jr. reshaped social norms about justice. King launched the Poor People’s Campaign, which demanded jobs, healthcare, and housing for all Americans in his less well-known speeches. This narrowing of income distribution during the post-war era was dubbed the” Great Compression”– but it did not last.

Another cycle started with the full-scale emergence of the third industrial revolution, powered by computers, digital networks, and information technology, as the oil crises of the 1970s marked the end of the previous cycle of inequality.

As digitalisation transformed business models and labour markets, wealth flowed to those who owned the algorithms, patents and platforms – not those operating the machines. Hi-tech entrepreneurs and Wall Street financiers became the new oligarchs. As the true indicator of success, stock options were replaced by salaries, and businesses increasingly valued capital over labor.

By the 2000s, the wealth share of the richest 1 % climbed to 30 % in the US. With each company’s stock market launch, hedge fund bonus, and quarterly report tailored to shareholder returns, the gap between the elite minority and the working majority grew.

But this wasn’t just a market phenomenon – it was institutionally engineered. The 1980s ushered in the age of ( Ronald ) Reaganomics, driven by the conviction that “government is not the solution to our problem, government is the problem”. Due to this neoliberalist philosophy, high income taxes were reduced, capital gains protected, and labor unions were reduced.

Deregulation gave Wall Street free rein to innovate and speculate, while public investment in housing, healthcare and education was curtailed. The US financial system and housing market collapsed in 2008, which brought about the consequences.

The Global Financial Crisis that followed exposed the fragility of a deregulated economy built on credit bubbles and concentrated risk. Millions of people lost their homes and jobs, while banks were rescued with public money. It sparked a moral awakening and an economic collapse, demonstrating the legacy of decades of market-friendly policies that had led to a system that socialized and privatized gain.

Inequality, long growing in the background, now became a glaring, undeniable fault line in American life – and it has remained that way ever since.

Fig. Wealth share and income share of top 1 % in the US

Is the US evidence that inequality is actually contrary to Kuznets ‘ model? While the chart above shows inequality has flattened in the US since the 2008 financial crisis, there is little evidence of it actually declining. And in the short term, while Donald Trump’s tariffs are unlikely to do much for growth in the US, his low-tax policies won’t do anything to raise working-class incomes either.

The narrative of” the American century” is a jumbled series of technological advancements that have shattered one after the other before institutions, politics, or social norms could move on. In my view, the result is not a broken cycle but an interrupted one. In addition to increasing inequality, reform stutters, and a new wave of disruption begins, like a wheel that never completes its turn.

Our unequal AI future?

Like any technological explosion, AI’s potential is dual-edged. Today’s tech giants monopolize data, algorithms, and computing power, much like the bureaucrats of the Tang dynasty who hoarding grain. Management consultant firm McKinsey has predicted that algorithms could automate 30 % of jobs by 2030, from lorry drivers to radiologists.

However, AI also democratizes: ChatGPT trains students in Africa, while DeepSeek empowers startups around the world to challenge Silicon Valley’s oligarchy.

The rise of AI isn’t just a technological revolution – it’s a political battleground. History’s empires collapsed when elites hoarded power, today’s fight over AI mirrors the same stakes. Will it resemble Britain’s post-war welfare state as a tool for collective uplift? Or a weapon of control akin to Han China’s grain-hoarding bureaucrats?

Who wins these political battles determines the outcome. In 19th-century Britain, factory owners bribed MPs to block child labour laws. Today, Big Tech spends billions lobbying to neuter AI regulation.

In contrast, grassroots movements like the Algorithmic Justice League demand bans on facial recognition in policing, in a similar vein to the Luddites who smashed looms to protest exploitation. The question is not if AI will be regulated but who will write the rules: corporate lobbyists or citizen coalitions.

The concentration of its spoils has never been the real threat, but rather the technology itself. When elites hoard tech-driven wealth, social fault-lines crack wide open – as happened more than 2, 000 years ago when the Red Eyebrows marched against Han China’s agricultural monopolies.

To be human is to grow – and to innovate. Although technological advancement causes inequality more quickly than income, how much it rises depends on how people unite. Initiatives like” Responsible AI” and” Data for All” reframe digital ethics as a civil right, much like Occupy Wall Street exposed wealth gaps. Public opinion is influenced by memes like TikTok skits that mock ChatGPT’s biases.

There is no simple path between growth and inequality. But history shows our AI future isn’t preordained in code: it’s written, as always, by us.

Professor of Economics at Cardiff University is Peng Zhou.

This article is republished from The Conversation under a Creative Commons license. Read the text of the article.

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