The Soviet Union and inequality

This is going to be a very brief and low effort post, I apologise for that, but I’ve run into a particular error about half a dozen times in the last week, and you know what it’s like when somebody is wrong on the internet. This post isn’t going to endear me to anyone. The pro-soviet left will hate it because I point out the USSR was less equal than Norway, the right will hate it because I point out it was actually quite an equal society. Ah well.

I am no fan of the Soviet Union, but I consistently find myself defending it against uninformed criticism. One of those lines of criticism is that it was as unequal, if not more so, than Western industrialised societies, with government oligarchs living lives of opulence. All available data suggests that this is not true. The Soviet Union was less unequal than almost -but not quite- all societies that exist today.

Here’s income share of the top 10% in Russia, versus France and the USA. As you can see, it was low right up until about the end of communism. Source: Filip Novokmet, Thomas Piketty, Gabriel Zucman (2017).

The Gini coefficient of the Soviet Union in its later period appears to have been in the vicinity of .26-.29. That’s a bit higher than Norway today, but far and away lower than most industrialised countries.

EDIT: As Kieran comments: “We should expect measured inequality to be considerable in the USSR even if there was extreme wage compression, as it was a geographically and demographically large entity which incorporated a series of underdeveloped regions, and still retained a large agricultural population. If you calculate for example the Gini for urban western Russia, it will be considerable smaller than the USSR figure. Likewise if we calculated the Gini for all of Scandinavia, or especially for all of Europe, it will tend to be be larger than the population weighted mean for the constituent countries. If we use GE indexes, we can readily decompose inequality into within and between subgroup contribution, and for example in contemporary China we find a large contribution from rural-urban inequality. One of the lowest ever recorded Gina was for urban China in the late 1970’s, with a figure of around 0.11. Czechoslovakia also recorded a Gini of 0.17 in the 1980’s.”