Some Comments on Inequality During the "Golden Age" of 20th Century Capitalism

     My previous posts undertook an analysis of  the state and private sectors and their mutual tension and inter-dependence under capitalism; as such, it was necessary to deal with some of the cherished myths of Post-War capitalism, as banal and as "mostly-true" as they maybe. Semi-truthfulness, honest analysis from error, and lies of omission are probably the strongest weapons of bourgeois ideology on the theoretical plane in our time. It is quite funny that despite the "Left" nostalgia for this long-lost age of Capitalism if one was to go back and read radical leftist papers at the time the impression of capitalist society that one would get would not be of a society becoming more equal, or one with some grand commitment to economic equality where possible, nor would one get the impression that radicals at the time believed that the capitalist system that existed was fundamentally fairer then the pre-war capitalist system. The bourgeois argument could be made that many leftists would continue to believe that day was night if they could find a place where Marx had made that claim in spite of all the evidence. But it is quite shallow, we've noted previously the possible impact of secret wealth in addition to the understandable fact that workers may not bend-knee and thank the capitalists for the Depressions, Wars, and War-making measures that narrowed the gap between the rich and poor during the early to mid 20th century.

   Here were have the graph illustrating the number of millionaires in the United States dating to the mid-19th Century as can be seen in 1875 there were just 1,000 millionaires and as late as 1918 just 10,000 and this number doubled during the roaring twenties where this hit 20,000 though some sources give a higher estimate of between 25-35,000--quite a margin of error. By 1953 the American economy had created 27,000 millionaires exceeding the pre-Depression peak by 7,000. By 1961-62 that figure had shot up to 80,000 four times more then the pre-Depression peak, and many more millionaires were about to be minted with soon-to-be enacted Kennedy tax cuts, around 1965 the 100,000 mark hit and by the time the 70s had started in earnest the 200,000 mark was hit circa 1972-73. By the time world recession of 1973-4 hit and the "transition period" away from Keynesianism and towards neoliberalism had quietly and slowly begun there were 10 times as many millionaires in the United States as there were during the peak of the Roaring Twenties! To keep things in perspective a million dollars in 1961 is approximated at over 8 million dollars in 2017 and that's quite an achievement considering the 91% income tax on the top 1% that prevailed up till the Kennedy tax cuts. So, while the age of Rockerfeller-esque tycoons may have briefly died away, and the number of dollar-billionaires may have been confined to just a handful of people,  we can say unambiguously that even if the rich weren't getting richer they were certainly getting more numerous. The 1957 Fortune list named 76 individuals with more then 75 million dollars, this base-level standard is approximately 650 million today with Getty topping out as America's "only" dollar billionaire with a fortune worth 8 billion, as mentioned before, Kennedy himself stood to inherit nearly as much. So, while the absolute number of millionaires was increasing it is quite likely that within that the differentiation within that wealthy class also increased creating more hundred-billionaires. It is possible that the high-taxes of the time, the anti-trust/monopolies laws, the relatively low interest rates,  and more stringent regulation of finance capital limited the ability of individuals to ascend to billionaire status; it is also very possible that the off-shore banking system, headquartered in London, and various other tax-evasion/black fund tricks made it easier to hide and produced greater incentives for doing so.  Of course, having a million dollars in the 1960s was less of an achievement then it was in 1929 but at the same time having one million was also considerably less then it was in the early 1900s and the 19th century. Between the thirty years between the Roaring Twenties and the prosperous sixties the value of one million dollars had fallen from a little over 14 million to 8 million-- while considerable devaluation it maybe,  this was far less then the factor of five increase in the millionaire population. As with the neoliberal era the falling value of the dollar during the "Golden Age" of capitalism is not enough to explain the absolute increase in the number of super-wealthy individuals society.  Meanwhile, the minimum wage had increased from $.25 in 1938 to its all time-high at $1.60 which clocks out at the surprisingly high rate of $11.21; during the exact 30 years that elapsed over this period of time the average minimum-wage worker gained a near 7 dollar bonus up from the Depression-era minimum wage of $4.32 in today's money. If we consider the facts then the wage of the poorest category of protected workers went up double-and-a half, which is no doubt impressive.  

   Hilariously, and painfully, today the federal minimum wage is just $7.25 only $2.93 dollars more then the 1938 standard. Literally just three fucking bucks more then the hard-times of the Depression that has been so lionized in American literature and film; in the nearly 80 years between now and then, the US government's base-line for what is and isn't poverty, what is and isn't a living wage has not changed. Despite all the technical change and immense economic expansion and wealth accumulation between now and then the thirties remains the baseline determining what workers should and shouldn't get.  The US government poverty line which was designed in the 1960s formulated on a standard that took Depression-era poverty as the model. Pathetically, the 1950 minimum wage of $.75 is higher then then the current federal minimum wage at $7.57 in current dollars.  Workers get to live in the 1950s and if their lucky the 60s while the capitalist class is living in the economic splendor of the 21st century and have suited their tastes accordingly.  It should be said that the Federal minimum wage in 1938 was quite generous for its time and even ranks on par with the going minimum wage in the poorer developed nations like South Korea and Israel. But such a high-wage  only became legally enshrined in the United States because American wages were already the highest or close to the highest due to its settler-colonial history  and rapid industrial development which meant the supply for labor was below average and the demand for labor by capital above average. In the late 80s the minimum wage hit its lowest post-68 level at $3.35 ($6.57 in 2017) which was lower then the minimum wage during any year of the 1950s and the closest thing to a return to wage-levels of the Depression, WWII, and the short-lived late 40s recessions.

       Despite the impressive wage-growth when we consider that the number of millionaires went up five times and that during the Depression by some estimates there were as few as 5,000 millionaires in 1932 around the same number as was present in 1910 then we can say that the number of rich and super-rich individuals increased far-faster then the growth in wages. Then came the unprecedented inflationary crisis of the 70s driven by the twin imperial self-inflicted crises: the final rejection of a gold-backed dollar and the oil-embargo that compounded the deep resounding recession of 1973-74. To repeat what has already been said by that time there were 20 times as many millionaires as during the Depression yet wages had already begun to fall-down as  the crises of the late 60s and early 70s unfolded.  By 1979 (the year that the Volcker Shock is held to have ushered in neoliberal) there were 500,000 millionaires in the United States; by 1980 the year of Reagan's election and the year widely-held by most scholars to be the zero-point for the neoliberal world order there were 600,000 millionaires. In 1982 there were 13 billionaires in the United States by 1987 that number had risen to 41 and up again to 68 by 1988 around the same time that American wages also declined steadily finally hitting a post-1950 low. By 1988 the number of millionaires had grown to 1.5 million as well. 

    But lest we be tempted to lionize the Keynesian era I found an old IRS report from circa 1977 that claimed there were over one million citizens with incomes/assets over $300,000--how much is that? approximately 1.2 million dollars. It also claimed that around $1.3 trillion dollars in assets was held by these individuals certainly a vast proportion of American wealth considered the output of the American economy was much smaller back then. When I manage to locate said report again I will certainly link it as has some interesting findings; unfortunately, for the 50s and 60s hard-hitting info seems to be scarce going by what's visible on the web, more research is required.  However, considering the fact that the economic paradigm was still quite Keynesian, and even today still is in spite of the neoliberal modifications, what can we say about the "Keynesian compromise" based on the available data?  We can say that the main beneficiaries were the rich, who may have been less extravagant and leaner then their forebears but the proletariat still paid the price for the vast increase in their sheer numbers. It can also be said that considering the long-view that the reforms achieved in the Post-War era was not immensely superior to the wage-growth and reformist waves that proceeded it when it came to improving the well-being of workers quantitively but was of a higher qualitative improvement given the low starting level of American and Western European wages during the rise of capitalism. It maybe said that more of the proletariat's wealth found its way into the hands of much wealthier and more powerful oligarchs, that while the number of the rich were comparatively few, those who were truly super-elite were dominant and gained tremendously over all levels of society during the Gilden Age.  But the Morgans and Rockefellers were replaced by thousands upon thousands of faceless bureaucrats and company Yes-men and thus, despite the larger base and the qualitatively larger number of people enriched in comparison to the super-rich, the difference for the proletariat is really none at all. With the exception of a more tangible hope that he or she may luck out and become one of the "lucky few". Unsurprisingly, capitalism has returned to old patterns choosing to make more Gates' and Buffets' then more petty-millionaires (though this too has grown) with its growing surplus but with the exception that American workers, especially the bottom-half of American workers, have gained little, and even lost, in comparison to the capitalist class. Stagnant wages for the majority of workers even during a recovery/boom was a fixture of 20th century fascist economies but now it seems that this is the new normal for democracies in the core countries. Of course, the wage-growth in 19th and early 20th century industrial economies organized around enlightenment principles often entailed wage-cuts during Depression and a low-starting standard with little state support that kept many workers in absolute misery. Keynes criticized the practice of wage-cuts but it seems in its place we've got stagnant wages and the shadow wage-cuts by inflation. 

   There are many ways to list how many aspects of peoples lives but economic and otherwise are better then the 60s, especially in the West, but this inane and boring practice could've easily been used, and probably was, to justify capitalism to an unemployed and hungry laborer in the Great Depression. The fact is that people work more, produce more, and a large portion of them get less and from this fact stems the romance with Post-War capitalism when the ideal capitalist formula work more=earn more seemed to be the reality for those workers lucky enough to live in the Global North. For the most part American wages were generous compared to their Western counterparts but their social benefits less so; now the unfortunate combination of low-wages and low social benefits is a reality for many. The Keynesian compromise traded a growing inequality between the 1% and the 99% for a growing inequality between 5-10% and the 90% which was no fix to the problems of capitalism at all.  Living in the shadow of the wage and wealth compression caused by a super-Depression and Two World Wars its easy to see why radicals did not see a society becoming more equal, because it wasn't, but  rather the inequality was increasing but from a lower base-level of inequality then what prevailed circa 1900. A larger "mass" of people joined the elite classes, true, to say nothing of the growth in the size of the labor aristocracy and "middle" classes but declining or static inequality between the 1% or .01% and the 99% hid the growth in inequality among the "99%" and one would be hard pressed to say that the average unemployed bum, soldier, or auto assembly-line worker had things particularly good in the 60s. From the perspective of the elite capitalism was in a place where it could create more millionaires and members of the middle class without having to "take" from the billionaires and other ultra-rich individuals. To a certain extent they were right but how long such extremities of inequity can hold is a question that is certainly being discussed  in whispers in Washington, the trouble is how to find more of that "growth" stuff that will allow them to have their cake and eat it too. Could we see a Keynesian social-democratic renaissance as many left-liberal commentators dream?  If it turns out that the tools used to create a Keynesian prosperity and a "broad-based" elite can only work with a high-rate of profit, like what existed after WWII, then that looks very much in doubt.