Paper presented at the Economic History Society Annual Conference, Wolverhampton, Telford Campus. 27–29 March 2015

Wealth inequality in Sweden 1750–19001

Erik Bengtsson, Anna Missiaia, Mats Olsson and Patrick Svensson Department of Economic History, Lund University

Preliminary results, please do not quote!

1. IntroductionThe last fifteen years or so have seen an important upswing in the research interest in early modern wealth inequality. Previous economic inequality research has mainly built on data from the mid-19th century on and hypothesized patterns in the data (a 19th century increase in inequality) that could not be proven or disproven with the data used. As early as the mid-1990s (van Zanden 1995), the interest in earlier economic inequality, and especially wealth inequality, has grown. Wealth inequality is, in an agrarian economy, a better measure of inequality than the inequality of incomes. This is because a large part of the economic activity is not mediated by the market and the income of most economic activity cannot be measured. Instead, the ownership of wealth, and especially land, is the most important indicator of economic inequality in the preindustrial society (cf. Alfani 2010: 514).

This paper provides new estimates of wealth distribution in Sweden from 1750 to 1900. The previous literature on Swedish wealth inequality before 1900 comprises only of a problematic point estimate of 1800 (Soltow 1985) and some years in the 1870s and 1890s (Roine and Waldenström 2009); our data thus makes it possible to test many hypotheses and ideas about Swedish wealth inequality in the early modern and early industrial periods. One of these is Piketty’s (2014) claim that Sweden before the 1910s was not at all more equal than other capitalist countries. This claim, given that Sweden was a late industrializer, contrasts with the common statement that more economically advanced countries were more unequal (e.g. van Zanden 1995). Moreover, this study aims at extending Lindert’s (1986) analysis of rural vs. urban inequality and inequality by social groups to Sweden. Finally, we are testing the widespread view in Swedish economic history of a relatively equal peasant-dominated rural society.

1 This paper has been written within the projects ”Growth and inequality before the industrial revolution, Scania 1650 to 1850” financed by the Swedish Research Council, ”Wages, economic performance and inequality. Scandinavia in the ‘Little Divergence’ in Europe”, financed by Jan Wallanders, Tom Hedelius stiftelse and Tore Browaldhs Stiftelse, and “Two very different ways? Agrarian reforms, markets and agricultural growth in Germany and Sweden 1750–1880”, financed by the Swedish Research Council.

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2. Literature and hypotheses

The international literature on early modern wealth inequalityHistorical wealth inequality has raised great interest in recent years. For the United States, Lindert and Williamson (1980) provide a synthesis of the studies made up to the late 1970s. Their main result is that wealth inequality went through four phases from the mid-17th century to the 1950. First, a period without much change from the mid-17th century to 1770. The second phase is from the 1770s to the 1860s and sees a rapid increase of inequality.2 Phase three is from 1870 to 1910 with high and stable inequality. The fourth phase is one of decreasing inequality from the First World War to 1950. Lindert and Williamson claim that this is completely consistent with the Kuznets curve: first increasing inequality with industrialization and economic modernization, then decreasing inequality.

Lindert (1986) estimates wealth inequality for England and Wales for 1670, 1700, 1740, 1810, 1857 and 1875. He finds that inequality in ownership was high in the Victorian age, as social commentators pointed out in that period, but had been so also for the two hundred preceding years, although its composition had changed substantially. At the beginning of the period, land was the most important form of wealth, and was very unequally held. When land gradually became less important, this had an equalizing effect. But this effect was counteracted by a growing inequality in the ownership of non-land capital. The compositional change at the centre of Lindert’s analysis highlights how studies of wealth inequality should not reduce its topic to be only top shares or Ginis, but also investigate the composition of inequality and how it changes over time. Lindert also shows an interest in social groups – nobility, merchants, yeomen, peasants and so on – that inspires. However he also presents estimates of top wealth shares. The share of the top decile is, according to Lindert, rather trendless from 1670 to 1875, varying between 81 and 86 per cent. The top percentile share is more volatile, first decreasing from 49 per cent in 1670 to 39 in 1700 and 44 in 1740, then increasing dramatically to 55 per cent in 1810 and 61 per cent in 1875 (Lindert 1986: table 4). However, this increase seems to have been the result of polarization among the rich, as the top 5 per cent share actually did not bulge.

Van Zanden (1995) in a very influential paper gave new impetus to the literature and brought it, so to say, to the European continent. Van Zanden compiled the scattered findings from a large number of local studies of wealth inequality in late mediaeval and early modern Western Europe and claimed that the literature needed a uniting analytical framework. The framework he proposed was the Kuznets Curve, now extended from its earlier 19th–20th century shape to a “Super Kuznets Curve” for the early modern period, where the growth period of the 16th century starts increasing inequality which goes on until the 19th century, and the decrease starting in the early 20th century. For example Augsburg, for which there is unusually good data, in the 16th century shows the expected combination of economic 2 Shanahan and Correll (2000) provide a critical study of Williamson and Lindert’s synthesis and find that they slightly overestimate the increase in inequality from 1770 to 1870. However this does not change the major picture.

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growth and increasing inequality that one would expect in the early phase of a Kuznets Curve. Van Zanden also provides new evidence that the Super Kuznets Curve fits the case of Holland.

The later European literature has mainly continued to build on van Zanden’s 1995 paper. Alfani (2010), studying Ivrea, a city in northern Italy, also finds very high preindustrial urban inequality. Reis et al (2011) have data for Portugal in 1550, 1700 and 1770 and do not find increasing inequality from 1550 to 1770 but explain this with Portugal’s relative economic stagnation – i.e., the country is the opposite of the typical Kuznets Curve country. Ergene et al (2013) however find the opposite for 18th century Ottoman Empire: economic stagnation and declining inequality. Fernandez and Santiago-Caballero (2013) investigate the countryside around Madrid from 1500 to 1840 and find increasing inequality. Cankabal and Filiztekin (2013) for four cities in Anatolia from 1500 to 1840 find the expected positive correlation between economic development and inequality. Turner (2010) studies wealth inequality in Northern Ireland from 1858 to 2001 and find no change in inequality before the 1890s when inequality starts decreasing. The decrease after the 1890s is not surprising but the typical right hand side of the Kuznets Curve (albeit starting earlier than most), but it is more surprising that inequality did not increase during the industrialization years from 1858 to the 1890s. Turner says that one possible explanation is that Northern Ireland is “a more agrarian and landlord-dominated economy than England and Wales, and was less industrialized at this stage in its economic development” (p. 642).

Thus, the current literature on early modern wealth inequality in Europe is very much focused, almost single-mindedly so, on the (Super) Kuznets Curve and the relationship between economic development and inequality. This is certainly one connection that we will explore in our analysis, but as we will see from the Swedish literature, there are also more nuanced and fine-grained hypotheses to test.

The Swedish literatureThere are two earlier direct studies of Swedish wealth inequality before 1900. Soltow (1985) uses the 1805 census where parish priests were obliged to report the socioeconomic status of their parishioners. Those who had more than 500 riksdaler above their yearly expenses were to be classified as rich, those who had less as rather rich, those who did not get by without hardship were classified as poor, and those who depended on gifts and alms to survive were classified as destitute. Soltow uses the social distribution into the four groups and combines this with wealth data from the 1800 wealth tax, which lists each owner of property and wealth that year. Soltow has a sample of 6309 persons and estimates a gini coefficient in 1800 of 0.73.3

Roine and Waldenström (2009) use estate tax data for 1873 to 1877 and 1906 to 1908 to extend the previous wealth distribution series which Spånt (1979) created for the

3 Söderberg (1987: 64) points out that Stockholm is missing in the data that Soltow uses. This should mean that Soltow underestimates inequality.

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period 1920 to the 1970s.4 According to Roine and Waldenström’s estimates, the top decile held about 85 to 90 percent of total wealth in the 1870s and this did not change to 1906–08. (In this series there is only real change, with a steep decrease of inequality, after 1930.) The top percentile holds between 53 and 60 percent of total wealth in 1873–77 and 58 to 61 percent in 1906–08; again the picture is one of high and stable inequality. These two studies provide the data also for the reporting on Swedish wealth inequality in Piketty’s (2014: 344f) recent book. Piketty’s conclusion from these data in a comparative perspective is that “Sweden was not the structurally egalitarian country that we sometimes imagine” (p. 344); wealth is not equalized until after World War I.

Of course there is also a wider literature which is relevant to the topic of Swedish wealth inequality, even though it does not present direct estimates of wealth inequality. Soltow (1989) uses the same census classification in four social groups – rich, moderately rich, poor and destitute – as in his 1985 wealth inequality paper from the censuses from 1805 to 1855 to analyze the proportion of households in the different groups. He finds that both among rural and urban households, the share of the poor or destitute decreased and the share of rich or moderately riche increased. He interprets this as decreased inequality (p. 51) He estimates the Gini coefficient of land ownership to be 0.70 in 1805, 0.67 in 1845, 0.64 in 1879 and 0.58 in 1921, and the top decile share in same years as 60, 58, 54 and 48 per cent respectively, i.e. a continuous decrease of inequality. According to Soltow, “general inequality decreased at least a little; inequality above the median income decreased; destitution decreased. The outstanding aspect of the initial stages of the industrial revolution in Sweden is the fact that poverty did not increase. In fact, it decreased.” (p. 62) However, as we have noted his data only concerns the ownership of land, and of course during industrialization land decreased in importance as a source of wealth, as produced capital became more important. As we will see, we will have reason to revise Soltow’s picture of decreased inequality.

There are several other studies of specifically rural social differentiation during our period. Winberg (1975: 17) in a seminal study stresses that from 1750 to 1850 population growth is rapid in Sweden, and especially rapid is the growth of proletarians. The share of proletarian and semi-proletarian groups among rural households increases from one fifth in 1751 to half in 1850. Proletarianization is not necessarily the same thing as pauperization, but it is still reasonable to expect some increased wealth inequality to this social differentiation. Morell (1980) compiles the findings of several local studies of six parishes in east central Sweden from the 1770s to the mid-19th century and reports the main conclusion as one very compatible with Winberg’s: increased social differentiation in the peasant class. Söderberg (1978) counts the share who were poor – defined as those who by the standards of their own time did not have more than “vad yttersta nödtorften krävde” (to cover the absolutely lowest necessities) – in southern Sweden in 1821, 1851 and 1871. He finds that the share who was poor typically was around one fifth of the population. This share was rather stable but 4 Roine and Waldenström (2009) also have wealth tax data for 1908, which enables a comparison of results with estate data and wealth tax data; they have a thoughtful discussion of this on pp. 157ff.

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decreased in some southern regions from 1821 to 1871 (p. 23).5 Söderberg (1978: 182) summarizes Lundsjö’s (1975) study of poverty from 1825 to 1860 as no country-wide trend but increases in poverty in eastern middle Sweden and a decrease in west Sweden (but from a higher level). Isacsson (1979) studies one parish in a protoindustrial area of central Sweden (Dalarna) from 1680 to 1860 and finds increasing social differentiation in the early 19th century; “the process toward a more homogenous peasant class during the 18th century was turned into its opposite at the beginning of the 19th century”. This is similar to Martinius’ (1977, 1982) argument that major peasant farmers started to distinguish themselves from ordinary peasants around 1850, although for Isacsson this process starts already around 1800 while Martinius stresses 1830 as a break point. Olausson (2004) studies social differentiation in western Wermland from the 17th century to the mid-19th century. He finds obvious differentiation already in the 17th century, increasing in the 18th century with growth of proletarian and semi-proletarian groups; he notes that his studied area was particularly dominated by nobles (p. 151). However in the second half of the 18th century he does find some specific expansion of peasant farmers which would indicate a more equal distribution; this is in the 1800 to 1825 period turned to its opposite, with instead a growth of on the one hand proletarian groups, on the other hand of the large estates.

On the contrary, we have very few studies of urban social differentiation. Lindberg (2007) studies income distribution in Stockholm from 1730 to 1810, but only has data for burghers, which of course represented only a small part of the population. Among the burghers he finds increasing income inequality and makes the more general claim that the 18th

century was marked by a mercantilist “policy of enrichment of the rich and impoverishment of the poor”. Söderberg (1987) analyzes the distribution of property in Stockholm in 1715, 1799 and 1845. He finds an ownership Gini coefficient of 0.78 in 1715, 0.7 in 1799 and 0.68 in 1845 (p. 68). The share of the nobility or persons of standing falls, and the share of merchants and craftsmen increases. Bengtsson (2015) studies salary–wage differentials in Stockholm from 1833 to 1905. He finds that the difference between a white-collar worker or a professional on the one hand and a blue-collar worker on the other hand increases rapidly in the mid-19th century, to historically high levels in the 1880s and 1890s. In another study he also finds that the wages of urban labourers as well as manufacturing and agricultural workers increase less than GDP per capita does ca. 1830 to 1875, implying a bottom-led increase in inequality, where proletarians’ living standards do not increase at a pace with overall living standards (Bengtsson 2014). This would imply growing wealth inequality, given that, as Williamson (1986) phrases it, wealth distribution is the tail wagged by the income distribution dog. On the other hand, wages are found to increase slightly faster than GDP/capita in the 1880s and 1890s.

Consequences for the present study: hypotheses and measures

5 Blekinge County was an exception (p. 36).

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Where does this literature review leave us for the present study? As we see, the Swedish literature abounds with hypotheses on the movements of wealth inequality – or different parts of inequality – in the 18th and 19th centuries. The international literature is ironically simpler when it comes to hypotheses, mainly sticking to the well-known Kuznets curve of associating modern economic growth with increasing inequality.

Obviously, the latter is something to test for the Swedish case in the 1750 to 1900 period. Swedish industrialization started in early 19th century and had its heyday c. 1870 to 1910. This implies that we might expect increasing wealth inequality especially from 1850 to 1900, but maybe also from 1800 to 1900. Roine and Waldenström (2009) have already shown, as noted by Piketty (2014), that Swedish inequality was high in the early 20th century, but before 1906–08 they only have data from 1873–77, and find no trend between the 1870s and the 1900s. Whether we find a trend from 1850 or even 1800 is an interesting question for the international debate. This trend can be measured by the Gini coefficient or by the top percentile and decile shares as Roine and Waldenström (2009) do. Furthermore, it’s not only the trend, related to the Kuznets Curve, which is interesting, but also the level: will our study, adding estimates for 1800 and 1850, support Piketty’s (2014) argument that the traditional view of Sweden as inherently equal is mistaken? To be able to compare with Lindert and Williamson’s (1980) estimates for the US, Lindert (1986) for Britain, Reis et al (2011) for Portugal, Fernandez and Santiago-Caballero (2013) for Spain and Cankabal och Filiztekin (2013) for the Ottoman Empire, we will use Gini coefficients and top shares.

Furthermore, the hypotheses from the Swedish literature are also interesting to test. These are more fine-grained and require in many cases more fine-grained measures, distinguishing between rural and urban inequality (and the composition effects of rural–urban shifts) and different social classes; fortunately this is something that our dataset allows us to do.

3. Data and methodologyTo answer the questions raised above by the many-voiced literature on early modern and industrial inequality, we present a new dataset. Historical wealth inequality studies typically build on either tax data or probate inventories. Lindert (1986: 1131) states that the probate inventory is the best source since it is the only one that encompasses the entire population, except perhaps paupers. Another advantage compared to tax studies is that wealth and estate taxes in the early modern period often were temporary in character and so do not facilitate studies over a longer time span. Hanson Jones’s (1972, 1982) pioneering studies built on probate inventories. The Swedish studies by Soltow (1985) and Roine and Waldenström (2009) build on tax data; Soltow focuses on a one-off tax in 1805, and Roine and Waldenström on a modern tax instituted in the 1870s.

Compared with these two previous studies, our use of probate inventories enables us to take a long run perspective, going further back than the 1870s and covering several benchmark years, rather than only one year as Soltow (1985). Probate inventories are

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a rich source for economic history in Sweden: they were made mandatory in 1734 and after this year provide a detailed source on individual ownership in all areas and social groups. They cover ownership of land and real estate as well as household goods, and are so detailed that they have been used for instance by ethnologists interested in the spread of manufactured goods as opposed to home made goods. Kuuse (1974) pioneered the use of probate inventories in economic history research, studying the spread of consumer durables, wealth formation as well as mechanization in the 19th and 20th centuries. More recently they have been used for example to analyse formal and informal credit markets (Lindgren 2002). Probate inventories were the main information used for division of estates among heirs and were also used to clear debt relations that the deceased had, so there were strong incentives to create a probate inventory for every person who owned anything and/or had debts.

Probate inventories are a very useful and rich source, but there are also problems with using them. A possible problem is the underreporting of people with no wealth, as pointed out by Markkanen (1976). This will probably underestimate the share of people without wealth and consequently also inequality. We are trying to overcome this problem by weighing the social groups according to their actual size in each study year. Another problem is that probate inventories by definition capture people’s wealth at the time of their death. Death is correlated with age and if different social groups amass wealth at different paces over the life cycle, then this might bias our estimates. It is reasonable to believe that the wealthy amassed wealth continuously as they grew older, while the poor might have been as poor in their prime working age as when they died. If this holds, then it gives an overestimating bias to our estimates of inequality (Hanson Jones corrected for age and Lindgren 2002 uses her method on Swedish data, in the next version of the paper we will apply it).

The full data set consists of the probate inventories from 32 rural districts (Sw: härader/tingslag) and 8 towns in the years 1750, 1800, 1850 and 1900, totally about 1,200 inventories for each of these years. The rural districts were randomly sampled, stratified by region, and comprise of 17 districts from the south of Sweden (Götaland), 9 from central Sweden (Svealand) and 6 from the less populous north (Norrland). The towns were randomly selected from all towns in Sweden by size, i.e. towns with larger populations had a higher chance of being drawn into the sample than smaller towns.6 The probate inventories for the nobility were kept in separate registers and we have consciously over-sampled nobles to provide a detailed picture of the top wealth groups. The information in the probate inventories that we build on is title/occupation, title/occupation of spouse, real estate (rural and urban), claims, debts, personal estate, and our calculated net value. Additionally, we are presently registering age at death, sex and marital status from the church archives, but these variables are not used in this preliminary study. We also still have around 350 rural inventories per year to register before reaching the full sample.

6 The towns studied are Askersund, Härnösand, Kristianstad, Norrköping, Stockholm (two separate registers), Västerås and Ystad.

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Table 1 shows a reconstruction of the Swedish socio-economic structure and the population simulated from our probate inventory sample,7 adjusting for the size of the socio-economic groups, i.e. the sample has been weighted by cloning (“blowing up”) the individuals in the underrepresented social groups to match their share of the population in respect to the over-sampled nobility. From the original 16 group socio-economic classification some of the groups have been merged to ensure a larger number of observations per group, e.g. the clergy, the bourgeoisie, teachers, students and other persons of rank have been merged into a middle class group, and crofters, cottagers, rural servants and workers has been merged into a rural workers and landless group. In the next step, with the full sample, we will be able to discriminate between many of these somewhat heterogeneous classes. Table 1. Socio-economic structure in Sweden 1750–1900 and adjusted data set by year

1750 1800 1850 1900Percent Freq. Percent Freq. Percent Freq. Percent Freq.

Nobility 0.45 216 0.37 219 0.31 233 0.28 236Middle class 5.38 2570 5.66 3359 5.22 3922 4.3 3666Peasant farmers 46.42 22166 43.72 25945 34.37 25808 28.95 24693Rural artisans and urban merchants

1.88 896 1.97 1169 0.79 592 13.33 11370

Rural workers and landless

30.28 14459 33.75 20029 47.11 35376 22.92 19553

Workers in factories and non-bourgeoisie townspeople

8.26 3943 9.93 5894 9.32 6999 27.1 23114

Soldiers and others 7.32 3496 4.6 2731 2.89 2169 3.12 2660

Total 100 47746 100 59346 100 75099 100 85292

Note: We have calculated the socio-economic structure in Sweden for 1750, 1800, and 1850 using Carlsson (1973), Historisk statistik (1969: 80–81, tables 21 and 22), Agardh (1857: 155), and Wohlin (1909: 49, table L, 180, table A). For 1900, we have used the non-aggregated, “raw”, numbers in the Swedish Official Statistics (BiSOS, 1907/A: table 15). Due to changes in classification between the different sources, the categories are not always coherent over time. The artisan and merchant group has for example taken over a huge part of the middle class in 1900. These problems will be further elaborated in coming versions of the paper.

The variable of interest in the paper is the distribution of the net value. We will measure this with top shares (top 1%, top 10%) and Gini coefficients. From the titles/occupations of the deceased and of the spouses, their social status coding permit analyses by social group. We have also coded the deceased as rural or urban and can thus distinguish between these two types.

7 The original sample by socio-economic group can be found in the Appendix.

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4. ResultsOverall inequalityLand ownership was the major source of wealth in preindustrial Sweden, and since 0.45 per cent of the population, the nobility, owned about one third of the agricultural land in 1750, it is not surprising if we start on a rather high level of inequality. As noted in the literature review, given the prevalence of Kuznets Curves in the literature, we would expect an increase in wealth inequality during the 19th century. Piketty (2014) claims that inequality was as high in Sweden as in more famously unequal countries in 1900, and the only statements in the literature where we would not expect rising inequality is Soltow (1989) who claims that distribution became continuously more equal from 1800 to 1920, and Roine and Waldenström (2009) who find no trend from the 1870s to the 1900s. As Table 1 shows, there was indeed an increasing trend in inequality, as measured by the top decile share of wealth, in the 19th century, especially from 1850 to 1900. The top decile held about three quarters of Swedish wealth in 1750, the share increased slowly to 1850 and then increased markedly to 1900 during the industrialisation period. This increase is probably related to urbanization and industrialization: urban inequality was higher than rural (see below), and industrialization created new fortunes quite concentrated in the population.

Table 2. Top wealth shares, Sweden, 1750–19001750 1800 1850 1900

Top 1% 51% 43% 44% 51%Top 10% 74% 75% 77% 88%

The top percentile’s share also increased from 1850 to 1900, from 43 to 51 per cent, which is consistent with the expansion of free market and capitalism in the period. This contrast with Roine and Waldenström’s (2009) finding of constant inequality from the 1870s to the late 1890s: the question is whether the difference is due to the longer time period here or the difference in data (probate inventories versus tax data). The levels are rather similar: according to Roine and Waldenström the top percentile held about 53–60 per cent of total wealth in the 1870s, 1890s and 1900s, and according to our finding s they held 43 per cent in 1850 and 51 per cent in 1900. The estimate for the top decile is 85–90 per cent in Roine and Waldenström, while ours end up at 77 per cent in 1850 and 88 per cent in 1900. In an international comparison, our top percentile share is a bit lower than Lindert’s (1986) for Britain in the 19th century, which varies from 55 to 61 per cent; his top decile has 85–90 per cent. It then seems reasonable to concede the point to Piketty (2014): Sweden in 1900 was not a very equal society, but rather very comparable to other capitalist countries. The sources of Swedish equality are modern. However, maybe in 1750 to 1850 wealth distribution, at least as measured by the top decile share, was more equal in Sweden than in Britain. This could be related to the lower levels of economic development in Sweden (cf. Ohlsson et al 2014).

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What about the equal Swedish peasants? In the Swedish literature, several studies of the rural population in this period (Isacsson 1979, Olausson 2004) stress a homogenization especially between 1750 and 1800, as contrasted to increasing disparities in the 1800–1850 period. Our top share data do not support this interpretation: the top percentile’s share does decrease from 1750 to 1800, but (a) this estimate is based on a very low number of observations so is volatile to its nature, and (b) the top decile share does not move, which means that the decrease in the relative ownership of the top percentile was compensated by increased holdings of the percentiles 90 to 98. However, top shares of course only measure the (relative) position of the elite. Possibly, there could have been an equalization on the more popular level in the second half of the 18th century? Table 3 shows the Gini coefficient which is a more encompassing measure of inequality.

Table 3. Wealth inequality in Sweden, 1750–1900 (Gini coefficients)1750 1800 1850 19000.82 0.84 0.86 0.89

Figure 1. Lorenz curves of wealth distribution, 1750–1900

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This does not support the idea of increasing equality between 1750 and 1800: instead the Gini coefficient increases by two points, from 0.82 to 0.84. The shape of the Lorenz curves in Figure 1 confirms that the increasing inequality in the period 1750–1850 was not due to increasing wealth among the richest. This is contrasted by 1850–1900, when the top 15–20% seems to fuel the patterns of increasing inequality. Of course this does not prove that there was no equalization within the landed peasant class, but if there was one, on the aggregate it was counteracted by increasing inequality elsewhere. One probable explanation is that the proletarianization process observed in this period (Winberg 1975) increased inequality by increasing the numbers and share of people who owned little or nothing at all. Given that our dataset allows us to calculate inequality separately for social groups, we have calculated the wealth Gini index for peasant-farmers (social group 7) and it indeed is much more equal in 1750, 0.58, than in 1900, 0.78. In 1800 and 1850 it was 0.70.

Rural and urbanAs noted, Soltow’s (1989) finding of continuously growing equality in the 19th century has been contradicted by our data. Could this be due to the fact that Soltow only has rural data: did inequality in the rural setting actually decrease? This is in line with what was claimed by Lindert (1986). Furthermore, can we see equalization in the second half of the 18th century as we would expect from Isacsson (1979) and Olausson (2004)? Table 4 shows urban and rural inequality separately.

Table 4. Urban and rural wealth inequality in Sweden 1750–1900, Gini coefficients1750 1800 1850 1900

Urban 0.91 0.91 0.93 0.92Rural 0.73 0.78 0.79 0.82Note: Parts of the landholding nobility resided in the towns, so their rural land possessions are (in this preliminary estimation) included in the urban estimate.

Firstly, table 4 clearly shows that the typical results from previous studies hold for Sweden too: urban wealth inequality is higher than rural. On the direction of urban inequality, we have in the Swedish literature opposite hypotheses from Lindberg’s (2007) study of burgher incomes and Söderberg’s (1987) analysis of real estate ownership: Lindberg claims that urban inequality increases in the 18th century while Söderberg claims that it decreases. According to our data actually there is no trend between 1750 and 1800. The level is constant at 0.91; what is more striking is the very high level.

On rural inequality, the expectation on the late 18th century is contradicted: inequality actually increases by a non-trivial amount, the Gini coefficient growing from 0.73 to 0.78. As noted above, there might have been equalization within the much-researched peasant class during the period, but the overall picture is still polarization, probably mostly driven by certain groups of tenants buying their farms from the state, increasing their real property wealth, while others, tenants under the nobility, was prohibited to do the same. From

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1800 to 1900 rural wealth distribution becomes a bit more unequal still, the Gini increasing from 0.78 to 0.82.

Comparing the urban and rural, the most striking fact is that urban inequality is much higher. Urbanization, which is constant around 10 per cent of the population between 1750 and 1850 but then doubling to 21 per cent in 1900, would then be associated with growing inequality. The process is the opposite of the one found in Britain by Lindert (1986): he claims that ownership of land was extraordinarily unequal and that the increasing importance of other types of capital in the 18th and 19th centuries then had an equalizing effect on wealth distribution. In Sweden, maybe because of the prevalence of independent smallholding farmers, instead rural wealth distribution at the beginning of the period is the most equal distribution we find.

Social groupsAs discussed above, Lindert (1986) sees a major transformation in wealth ownership over the 1670 to 1875 period in Britain, above all a transformation from domination by the landed elites to non-land wealth becoming more important. Steckel and Moerhling (2001) similarly provide a decomposition of wealth inequality and its changes in industrializing New England from 1820 to 1900. How did Swedish wealth composition change over the 1750 to 1900 period and how did this affect its distribution?

Table 5. Wealth by social group, 1750–1900 (nominal values, kronor)1750 1800 1850 1900

Social status Average wealth

Share of total wealth

Average wealth

Share of total wealth

Average wealth

Share of total wealth

Average wealth

Share of total wealth

Nobility 7 965 21% 12 877 11% 35 564 11% 108 160 5%Middle class 574 20% 1 060 15% 4 039 26% 24 202 18%Peasant farmers 134 37% 487 49% 1 175 39% 6 191 30%Rural artisans and urban merchants

1 081 13% 2 803 13% 13 250 11% 14 728 33%

Rural workers and landless

23 3% 57 4% 185 6% 530 2%

Workers in factories and non-bourgeoisie townspeople

56 3% 89 2% 746 7% 2 246 10%

Soldiers and others 62 3% 508 5% 111 0% 2 555 1%Total sample 1 413 100% 2 554 100% 7 880 100% 22 658 100%

We see clearly in table 5 how the importance of the nobility in the economy is diminished during the period. In 1750, the nobility, less than half per cent of the population, holds 21 per cent of total wealth; in 1800 this has decreased to 11 per cent, in 1850 still 11 per cent and in 1900 to a mere 5 per cent. The peasant farmers also see their share decreasing in the long run,

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from 37 per cent in 1750 to 33 per cent in 1900, but with an all-time high in 1800 at 49 per cent. The middle class and bourgeoisie group increase its share from 20 per cent in 1750 to 26 per cent in 1850. The decrease in 1900 is associated with a different socio-economic classification, having a larger part of the middle class in the merchant group. If we merge the middle class and artisan/merchant groups, their percentage of total wealth increased from 37 to 51 between 1850 and 1900. Rural and urban workers own very little, but with the industrialization the share of wealth kept by the urban workers increased substantially.

5. ConclusionsThis paper has presented the first long run estimates of wealth inequality in Sweden before the late 19th century using a newly collected stratified random sample of over 3,000 probate inventories. The results show a country with high and growing inequality from 1750 to 1900, in contrast to the picture sometimes spread both in the international and domestic literature of a relatively equal, homogenous society of peasant-proprietors. This image is partial and as an analysis of society as a whole probably misleading, projecting well-known equality in the 20th century back to where it cannot be found in the data.

In 1750, Sweden was a rural country with less than ten per cent living in urban settings. Most people were engaged in agriculture and thereby growth and distribution within this sector was the main determinant of equality/inequality. Since the nobility, constituting less than half a per cent of the population, owned and controlled a third of all land inequality was high. Over the next fifty years, inequality increased somewhat, particularly in the countryside. One factor contributing to this was the opening for tenants on Crown land to buy their farms. Through a rather small sum, equal to six years rent, they became owners of their farms and their property value therefore increased from zero to constituting the main part of their wealth. However, not all tenants invested in this and some tenants, the ones under the nobility, were not allowed to buy their farms. Thus, an increase in the inequality within the peasant-farmer class, the largest socio-economic group by that time in Sweden, took place. This change in property rights increased economic incentives and possibilities for accumulation and was one part of the emerging agricultural revolution which made inequality rise despite a stagnant GDP per capita over the period.

In 1800, the agricultural revolution took up speed, starting in the south of the country with enclosures, investments in land conversion, emerging markets in land, labour and capital, and spread across the country over the coming 50 years. The investments in agriculture required more labour and changes commencing in the eighteenth century was increasing in force, such as the rural landless marrying and forming families without having access to land. There was thus a social differentiation in the countryside and while the group of landless increased, the farmers became richer due to investments, fixed taxes, and rising demand for food. Although both groups belonged to the lower part of the wealth distribution and thereby made little impact on top-wealth and overall inequality, farmers went from less than six times as wealthy as their workers to more than eight times as wealthy. Also in the

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towns, inequality rose, partly due to merchants becoming a very wealthy group, outperforming other townspeople. Overall, inequality rose but rather slowly during this period as did GDP per capita which grew by around 0.3 per cent per annum (Schön and Krantz, 2012).

During the period 1850 to 1900 Sweden experienced the industrial revolution and towns grew both absolutely and relative the countryside. The growth of the towns in relation to the countryside had a compositional effect on total inequality, since towns were more unequal than the rural settings during this period, but there was also a quite strong wealth accumulation among the top 15–20 per cent of the population. This was above all the rise of the new industrialisers and a continued wealth expansion among merchants. Also GDP per capita rose fast, by 1.4 per cent per year, so inequality and growth went hand in hand during the industrial revolution. In 1900, our estimates show a very unequal Swedish society with the top 10% owning 88 per cent of the total wealth and the top 1% owning 51 per cent, which is very much in line with the estimations by Roine and Waldenström for 1907 (cf Piketty 2014: 345, figure 10:4). Although we must bear in mind that our sample is not yet complete, making room for further precision in the estimation in the coming study, the picture of Sweden as highly unequal already at the beginning of the agricultural revolution, and this inequality rising fast over the subsequent industrial revolution, seems quite robust.

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Appendix

Table A1. Number of probate inventories in the sample by socio-economic group1750 1800 1850 1900

Nobility 216 219 233 236Middle class 161 121 106 73Peasant farmers 215 236 199 178Rural artisans and urban merchants

42 46 39 87

Rural workers and landless

18 84 109 107

Workers in factories and non-bourgeoisie townspeople

41 58 78 83

Soldiers and others 24 28 22 28Total 717 792 786 792Note: Socio-economic classification from Table 1.

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