The American Economy: Income, Wealth and Want

The American Economy: Income, Wealth and Want

STANLEY LEBERGOTT
Copyright Date: 1976
Pages: 406
https://www.jstor.org/stable/j.ctt13x0qhg
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  • Book Info
    The American Economy: Income, Wealth and Want
    Book Description:

    Every economic system exists only to satisfy human wants, yet most systems fail to do so. Taking a keen look at the gap between goal and result, Stanley Lebergott appraises public policies relating to the U.S. distribution of income and wealth today.

    Part I shows that many programs have disappointed their proponents because certain basic assumptions were not understood. The author's new data suggest more realistic answers to much-debated questions: Are the rich getting richer? How much "upward mobility" exists? What approaches to poverty, starvation, and discrimination are practical today?

    In Part II, size distributions are derived for wealth in 1970, for income in 1900, and for white and non-white income for the period 1900-1970. These data include new estimates for key items in the standard of living since 1900, with detail on services that have dominated the "postindustrial" economy.

    Originally published in 1976.

    ThePrinceton Legacy Libraryuses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These paperback editions preserve the original texts of these important books while presenting them in durable paperback editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.

    eISBN: 978-1-4008-7000-4
    Subjects: Economics

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. PREFACE
    (pp. v-vi)
    S.L.
  3. Table of Contents
    (pp. vii-2)
  4. I Income

    • CAN AMERICAN CAPITALISM END POVERTY?
      (pp. 3-20)

      There exist eight reliable ways to increase poverty. The United States now pursues seven of them. Should it continue to do so, poverty in America will continue. Now it is true that since 1936 the percent of American families below the official OEO poverty line has been cut, from 56 percent to less than 10 percent.¹ And with our trillion-dollar GNP we have the wherewithal to cut that down to 1 percent by next Sunday. But it may be impossible to end poverty permanently without changing course on these seven ways. Yet doing so could change American capitalism beyond recognition....

    • ON CONFISCATION
      (pp. 21-32)

      Man’s concern with inequality began in the Garden of Eden. According to our source (which may be biased), Eve first, and then Adam, became troubled by the unequal distribution of knowledge. As the years passed, however, man expressed sharper concern over inequalities in the distribution of income than in that of knowledge. A forceful attempt to cut down such inequality in the United States began with the 1913 income tax law. Tax rates have increased twenty-fold since then. But most Americans surely still believe that too many other Americans enjoy unconscionably high incomes. And both the ancient utilitarian theory and...

    • PER CAPITA INCOME AND THE ANGEL OF THE LORD
      (pp. 33-43)

      That death will increase the welfare of a family or a nation has probably occurred to no one but specialists in the cause and cure of poverty. It might, indeed, never have occurred to them but for a heady combination of Latin and long division.

      Those specialists usually agree that a nation’s welfare is to be measured by per capita income—i.e., total income divided by population.¹ But long division tells us that dividing a rupee (or a dollar) by 2 is going to yield a higher per capita income than dividing by 3. How, then, does per capita income...

    • THE SUBMERGED TENTH: COLOR AND ETHNIC GROUP INCOMES, 1900–1970
      (pp. 44-52)

      “While there is a lower class, I am in it,” Eugene Debs once declared. His feeling of affiliation has been shared by many who believe that society fails its essential moral purpose whenever particular groups—religious, ethnic, color—remain mired in a lower class. What has been the U.S. experience from 1900 to 1970? We assume that the income reference standard for the chief minority ethnic and color groups is a simple but a relative one.

      It is not “How well did these groups do economically?” It is rather, “How well did these groups do when compared with the great...

    • A CENTURY OF GUARANTEED INCOME IN THE U.S.
      (pp. 53-69)

      For more than a century American governments have guaranteed incomes to those in poverty. Little attention has been paid to that record by recent discussants of poverty and the guaranteed income. Yet it tells us much about how American values operate through the political process. And it reveals that the values of those who legislated in 1850 were surprisingly consistent with those who dominated the era of La Follette and Mellon, as well as the later days of McGovern and Nixon. Few polemics on the guaranteed income define it as necessarily being only one specific dollar-and-cents figure. And few have...

    • THE MINIMUM BUDGET: FROM “DECENCY” TO “SCIENCE”
      (pp. 70-76)

      “How much land does a man need?” Tolstoy asked during his high religious phase. And he answered, in a story with that title: “no more than enough for a grave.” As the world has industrialized, a new question was increasingly put: “How much money does a man need?” The answer given by American legislative practice has been noted above. But there has been another approach. Minimum standards and poverty lines have been set by a detailed budget of “required” items—e.g. the BLS City Workers Family Budget. The logic behind these budgets is striking. Yet it has received little examination....

    • POVERTY AND STARVATION
      (pp. 77-87)

      In point of fact there is no evidence that fewer people died of starvation in 1969 than 1968.² Nor the reverse. For no adequate measure of starvation in the United States exists.³

      But it is feasible, and actually more useful, to look to the links between poverty and malnutrition. For malnutrition is the first stage on the road to starvation. More people will be damaged by malnutrition than are ever destroyed by starvation. Furthermore, the malignant health consequences of malnutrition deserve action even where they do not actually end in starvation.

      Malnutrition has been declared endemic in American society: “when...

    • GNP AND THE GARDEN OF EDEN: LONG-TERM TRENDS IN U.S. REAL INCOMES
      (pp. 88-107)

      There, surely, is the ultimate legend. It appeared again, impressively, in the Bible’s description of the Garden of Eden. Surely its most important secular version was Rousseau’s idyll of natural man before civilization ruined his character. The legend did not lack for opposition. Perhaps the most succinct was Byron’s: “The ‘good old times’—all times when old are good—are gone.”² But it was reserved for Marx to attack the legend most tellingly when he described the tremendous advance capitalism made over prior states, as humanity moved on toward socialism.

      In our own day, however, a new and earnest set...

    • DISCRIMINATION AND POVERTY
      (pp. 108-128)

      Market discrimination actually reduces poverty—at least it does according to the kind of data widely used in discussions of U.S. discrimination. Thus 1970 Census data show:¹

      Percent of Families in Poverty in 1969

      White 8.6%

      Japanese 6.4

      Is there any basis in theory why the very real discrimination against the Japanese should yield such results? But there the figures are. The explanation is a simple one: most models which discover that discrimination creates low family incomes are not structural ones. Moreover, few (if any) of them bother to refer to the longest malevolent U.S. experience with market discrimination—namely...

    • WHAT INCOME DISTRIBUTIONS MEAN
      (pp. 129-148)

      The distribution of power, prestige, and pelf has been a topic of durable concern to most societies. In distant eras, and in simple cultures, the distribution of economic power and advantage could be fairly closely measured in simple terms—e.g., the number of the flocks in ancient Israel, or the amount of land in the Domesday Book. But recent centuries have witnessed the notable rise of urban industry. They have also seen bewildering gains in geographic and social mobility: “Men become their own fathers,” making their own status. Moreover, the incentives that press the Rastignacs or Jim Bradys of the...

  5. Wealth

    • THE CONCENTRATION OF WEALTH: SOME ECONOMIC ASPECTS OF ETHICS
      (pp. 149-160)

      Once upon a time, according to Irish legend, there was “a rich man of great age who had bribed the people on the other side of death to leave him here.”¹ Now perhaps riches cannot bring off any such Faustian bargain. But the belief that they can do so reflects a nearly universal fascination with the powers of wealth. The ethical aspects of those powers are twofold: (1) ones that concern equity between rich and poor in a given generation, and (2) ones that concern equity between current and future generations.²

      That a morally unacceptable wealth distribution exists in the...

    • THE NOUVEAU RICHE AND UPWARD MOBILITY
      (pp. 161-178)

      How long has upward mobility been commended as the sovereign medicine for democratic societies? And for how long have the carriers of such mobility, the nouveau riche, been denigrated? Certainly since Balzac and Marx they have been regularly described as vulgar, pushing, greedy, and coarsely aspirant. Such adjectives by now make up a ritual cadence—testimony, of course, to the impressive battery of inventions by those master dramatists. But the resultant formula for aversion has shifted attention almost wholly to the two establishments: the historic rich and the permanent poor. That fixed focus has prevented adequate analysis of the actual...

    • ARE THE RICH GETTING RICHER? TRENDS IN U.S. WEALTH CONCENTRATION
      (pp. 179-212)

      Literature shades into litany in discussion of many an emotionally charged subject, not least the distribution of wealth. Such shading has one great advantage: it often puts prevailing beliefs into superbly succinct form. Thus, the compact statement that “the rich are growing richer and the poor poorer.”¹ We propose to assemble some new evidence on trends in U.S. wealth concentration. When tested by a simple model of wealth accumulation (Part I) this evidence sharply contradicts the conclusion that “the rich get richer.” The reasons for the contradiction inhere in the wider structure of U. S. society (Part II). The continuing...

  6. II New Data on U.S. Income and Wealth

    • THE DISTRIBUTION OF WEALTH IN 1970
      (pp. 215-247)

      It has not been established as a natural law that discussion of the increased concentration of wealth, or the impact of inflation, varies inversely with the amount of reliable data on the subject. Yet where are the facts to warrant multiplied assurances that the concentration of wealth in the U.S. is increasing? Or has moderated? Or that inflation hits the middle class more than the rich? Or less? In point of fact, we barely have comprehensive data on the distribution of wealth for a single year, much less a set for testing changes over time. Moreover, available data either relate...

    • LONG-TERM TRENDS IN THE U.S. STANDARD OF LIVING
      (pp. 248-298)

      How has the U.S. standard of living changed since 1900? And for what has the increase in personal consumption expenditure gone? To answer these questions we develop data on various aspects of the change in personal consumption. But the economic elements in the standard of living include more than personal consumption expenditure, or services from assets. A very substantial increase in personal consumption from 1900 to 1970 was foregone, to permit, instead, a substantial cut in the work day and work year. We therefore take note of the declining work day for members of the labor force, and the declining...

    • WHITE AND NON-WHITE INCOME DISTRIBUTIONS: 1900–1970
      (pp. 299-309)

      Despite the considerable interest in contrasting white and non-white income distributions, data for this comparison do not exist for the years prior to 1947. As a result, it is difficult to understand changes in one distribution relative to the other since 1947. For example, are the changes since 1962 similar to those which occurred in prior peacetime periods? Or are they significantly greater? Do they report a rate of change that merely continues longer trends? Or do they indicate a sharp reversal resulting from newer social forces?

      To assist in the study of such problems, we have developed white and...

    • THE INCOME DISTRIBUTION IN 1900
      (pp. 310-325)

      A more detailed family income distribution, and probably a more reliable one, can be developed for 1900 than for any year prior to 1936.¹ The existence of two extensive studies account for this somewhat surprising potential. One is the 1900 Census, which provided more detail on gross farm income and expenses than is available for any year prior to 1940.² (Farming then occupied a third of our labor force.) The other is the survey by the U.S. Commissioner of Labor, which reports 1900–1902 income data for a larger sample of urban families than has been surveyed in any year...

    • SERVICE EXPENDITURES SINCE 1990: NEW ESTIMATES
      (pp. 326-375)

      WhenLa Nouvelle Heloisefirst appeared, its success was so great that the booksellers rented rather than sold the book, charging 12 0.sous an hour for each volume.¹ In an economy whose prices and incomes are such that few people even rent books for a day, this anecdote is a reminder of how thin a line separates goods from services. Goods, no less than services, are purchased primarily for their service value.² As that service value becomes available in new goods or services, the line between goods and services will shift. The household production function for cleanliness once required soap,...

    • [Illustrations]
      (pp. None)
  7. INDEX
    (pp. 377-382)
  8. Back Matter
    (pp. 383-383)