>Realists are right in claiming that democratic life is possible only when certain, mostly material conditions are in place. But, in acting like the drunkard that searches for his lost keys only under the lamppost — that is, by looking at the easy-to-measure variable of income — they have missed the true nature of those conditions. It is, rather, excessive economic inequality, particularly in agrarian countries and in nations rich in oil and other minerals, that exacerbates the extent of social and political conflict to the point of making democracy impossible. In an unequal society, the majority resents its diminished status. It harbors the expectation of employing elections to drastically overturn its condition. In turn, the wealthy minority fears the outcome that may follow from free elections and the assertion of majority rule. As a result, it resorts to authoritarian institutions to guarantee its social and economic advantage. By contrast, in societies endowed with some relative social and economic equality, inhabitants are willing to accept the inherently uncertain results of free elections — that is, they are willing to agree to be temporarily reduced to the status of minority and to be governed by the party they oppose.
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Before the irruption of commercial and industrial capitalism in modern Europe, most wealth was fixed in the form of farmland and mines. A few agrarian communities (mountainous Switzerland, Norway, or Iceland) were equal and democratic. But most pre-industrial societies were (and are) characterized by the combination of inequality, authoritarianism and underdevelopment.
Authoritarianism is pervasive in an agrarian economy for a simple reason. In a Hobbesian world infested by bandits and generalized war, autocrats are a standard, reasonable mechanism to enforce peace and to protect the peasant population against plunder and death. Still, the price of authoritarianism is inequality. In exchange for protection against bandits like themselves, rulers such as the Bourbons, the Tudors, or the Sauds seize an important part of their subjects’ assets. For example, at the death of Augustus (14 A.D.), the top 1/10,000 of the Roman Empire’s households received 1 percent of all income. In Mughal India around 1600 A.D., the top 1/10,000th received 5 percent of all income. In fact, the annual income of the Indian emperor was the equivalent of the wage of about 650,000 unskilled workers.