Long-term trends in income and wealth inequality in the Netherlands: 1808-1940

Abstract

Although the economic development of the Netherlands took a different path from that of the countries investigated by Kuznets in his study of long-run income distribution patterns, the Netherlands shared in the inverse-U pattern of inequality established by him. From the mid-nineteenth century until about 1880 levels of inequality increased, declining gradually there after. During WWI there was a dramatic widening of income dif ferentials, which were subsequently more than reversed. The immediate preand post-WWI pattern of wealth distribution was similar. While cyclical developments characterized the distri bution history of the inter-war years, for the period as a whole the trend of both income and wealth inequality was firmly down wards. To date very little research has been undertaken into the problem of income and wealth distribution in the Netherlands in the nineteenth century. The reason for this noticeable lacuna in Dutch historiography is not hard to find it was only in 1893 that a national wealth tax was introduced and it was not until 1915 that income tax was added to the government's fiscal arsenal. Whilst some, highly dubious, national income estimates do exist for the nineteenth centuryu) virtually nothing is known about the distribution of that income. However, although ideal data is not available until relati vely late in the day, various other national direct and indirect taxes do serve to provide a more or less accurate picture of inequalities in the distribution of prosperity over a longer timespan.U) Before turning to an analysis of this data, it is necessary to sketch the economic backdrop to the developments to be discussed. The picture of economic development that can be drawn from the sectoral statistics so far available is of a remarkably balanced growth from about 1830 onwards. Unlike the situation in England or Belgium, for example, industry did not play the role of the motor of economic development in the transformation of the Dutch economy. The primary, tertiary and secondary sectors all contributed in their own way in producing a gradual and dis persed pattern of growth. Although prior to 1850, industry had not undergone a thorough-going technological transformation, nevertheless the most impor tant sectors had experienced a considerable expansion of production over the + Address all communications to: J.M.M de Meere, Vrije Universiteit Amster dam, Subfaculteit Sociaal-Culturele Wetenschappen, Afdeling sociaal economische geschiedenis, Hoofdgebouw, kamer 12 A, De Boelelaan 12105, NL 1007 MC Amsterdam This content downloaded from 207.46.13.193 on Thu, 08 Sep 2016 04:50:31 UTC All use subject to http://about.jstor.org/terms