I just finished reading Walter Scheidel’s The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First Century, and found myself agreeing with Scheidel against his
A simple explanation is that there are no capitalists, no return on capital, that the government has nationalized the means of production and the apparent returns on capital are labor income for stewarding the capital, set by the owner of capital with an eye on the incentives, but intentionally not reacting to this shock (or, indeed, adjusting against it).
Labor can substitute for capital more easily than the other way round?
Wars tend to disproportionately kill young men. Plagues tend to kill randomly with respect to sex. So % population declines aren't necessarily equivalent. Just an observation. Not entirely sure how this might factor in.
"This suggests that a big inequality fall is unlikely anytime soon, and we shouldn’t wish for it, as it would likely come from vast destruction and violence."
One can still wish for big *collapse-free* inequality falls. I do.
I think relative increases in returns to capital may have gone to taxes rather than owners of capital...
I think you are undervaluing intellectual capital. Ancient civilizations had a single form of capital: arable land. Back then that was the true binding constraint: 80%-90% of population was working in agricolture. Other forms of capital, castles, gold, etc... had very little effect on productivity. They just lacked the technology.
In modern times land is a much smaller portion of capital and technology is a much bigger component. Both world wars pushed most countries into high research investment. I don't think buidlings are that important compared to that: many factories would have been obsolete anyway given the technological improvements achieved.
If we properly valued total capital, I think world wars wouldn't look as bad in terms of capital destruction. Ideas and processes are the true fundamental wealth.
Even during the war, allied bombing didn't really hinder war production that much. If they couldn't reduce productivity while they were bombing, why would it have any effect afterwards.
What if the trade-off between complementarity and substitutability is imperfect? With small changes in relative availability of labor and capital, producers don't change the mix of factors much, and the two are complements. However if one of them changes by a lot (a factor of two in your examples seems like a lot) then the nature of production has to change significantly, and the relatively more plenty factor has to act as a substitute instead.
In ancient times, there wasn't much choice in the means of production, so if there was complementarity, that would still have been the case after a shock. more recent times have enabled more ability to change production process, so small changes can look like complementarity, while larger shocks require a complete revamp which looks more like substitution.
I haven't tried to build a mathematical model here, so I don't know whether it'll hold together.
What about state action? Huge profits following war would have likely engendered revolutions. After the 1st war, you had the example of the Russian Revolution. After the second, the expansion of Communism to half of Europe. Did the state restrain capital out of fear?
These wars increased debt significantly. Rationing, price controls, and taxes along with inflation provided financial repression and debt reduction. Losers lost their debt as well as patents. Remarkable what can be accomplished when there is the will, isn't it.