Unequal Gains: American Growth and Inequality since 1700

by Peter H. Lindert, Jeffrey G. Williamson

Overview

A book that rewrites the history of American prosperity and inequality

Unequal Gains offers a radically new understanding of the economic evolution of the United States, providing a complete picture of the uneven progress of America from colonial times to today.

While other economic historians base their accounts on American wealth, Peter Lindert and Jeffrey Williamson focus instead on income—and the result is a bold reassessment of the American economic experience. America has been exceptional in its rising inequality after an egalitarian start, but not in its long-run growth.

America had already achieved world income leadership by 1700, not just in the twentieth century as is commonly thought. Long before independence, American colonists enjoyed higher living standards than Britain—and America's income advantage today is no greater than it was three hundred years ago. But that advantage was lost during the Revolution, lost again during the Civil War, and lost a third time during the Great Depression, though it was regained after each crisis. In addition, Lindert and Williamson show how income inequality among Americans rose steeply in two great waves—from 1774 to 1860 and from the 1970s to today—rising more than in any other wealthy nation in the world. Unequal Gains also demonstrates how the widening income gaps have always touched every social group, from the richest to the poorest. The book sheds critical light on the forces that shaped American income history, and situates that history in a broad global context.

Economic writing at its most stimulating, Unequal Gains provides a vitally needed perspective on who has benefited most from American growth, and why.

Product Details

ISBN-13:	9780691170497
Publisher:	Princeton University Press
Publication date:	04/19/2016
Series:	The Princeton Economic History of the Western World , #62
Pages:	424
Product dimensions:	6.50(w) x 9.10(h) x 1.30(d)

About the Author

Peter H. Lindert is Distinguished Professor of Economics at the University of California, Davis. His books include Growing Public: Social Spending and Economic Growth since the Eighteenth Century. He lives in Davis, California. Jeffrey G. Williamson is the Laird Bell Professor of Economics, emeritus, at Harvard University. His books include Trade and Poverty: When the Third World Fell Behind. He lives in Madison, Wisconsin. Both are research associates at the National Bureau of Economic Research.

Table of Contents

List of Illustrations ix

Preface xv

1 Persistent Debate, a New Approach, More Data, Rich Findings 1

2 Colonial Incomes on the Eve of the Revolution 13

3 When Did Colonial America Get Rich? 43

4 Losing the Lead: Th e Cost of Revolution and Independence 77

5 Unequal Economic Growth, 1800– 1860 96

6 The Civil War: Growth Lost, Freedom Gained, Inequality Maintained 142

7 Contending Forces: American Incomes across the Late Nineteenth Century 166

8 The Greatest Leveling of All Time 194

9 Rising Inequality Once More, since the 1970s 219

10 Inequality and Growth: History Lessons for the Future 242

Appendix A A Guide to the 1774 and 1800 Income Estimates 263

Appendix B Salaries, Payment in Kind, and Workdays 279

Appendix C Estimating Slaves’ Retained Earnings, Colonial Times to 1860 287

Appendix D American versus British Prices, 1640– 1875 304

Appendix E A Guide to the 1860 Income Estimates, and Some Modifications for 1850 311

Appendix F A Guide to the 1870 Income Estimates 320

Appendix G Farm Operators’ Incomes in 1870 327

Appendix H Sources and Notes to Tables and Figures in Main Text 349

References 369

Index 391

What People are Saying About This

From the Publisher

"Unequal Gains provides a brilliant historical perspective on the market forces and political currents behind the explosion of economic disparities in the United States over the past four decades. Lindert and Williamson offer essential insights that can help assure a more equal sharing of the gains made possible by American economic growth."—Samuel Bowles, author of The Moral Economy: Why Good Incentives Are No Substitute for Good Citizens

"Unequal Gains is a very important contribution to the study of American economic development, and is particularly relevant for current concerns about the causes and consequences of income inequality. Lindert and Williamson provide new information about the qualitative and quantitative changes since the colonial period, mainly in the United States, but also in comparison with Great Britain and other nations. This is a major scholarly achievement."—Stanley L. Engerman, University of Rochester

"Unequal Gains is a provocative book that forces us to change the ways we think, write, and teach about American and global economic history. Lindert and Williamson find that Americans have almost always had the world's highest incomes, that the United States may have been the first nation to achieve modern economic growth, and that economic inequality is less a price we pay for progress than a matter of policy choices."—Richard Sylla, New York University

"In this magisterial book, Lindert and Williamson review and reestimate American economic growth and income distribution from before independence to today. The reader follows the growth of the American economy from its modest beginnings to its almost unchallenged global supremacy—but also its many distributional struggles. An indispensable and most pleasurable read."—Branko Milanovic, author of Worlds Apart: Measuring International and Global Inequality

"What are the relationships among inequality, capitalism, and economic growth in the United States? In Unequal Gains, the two greatest scholars of inequality in the longue durée revisit the data and the arguments and bathe the twentieth-century evidence in historical context."—James A. Robinson, University of Chicago

"This book, written by two of today's most distinguished economic historians, is one of the most impressive and important I have read in recent years. Unequal Gains is a landmark study that contributes in a substantive way to contemporary policy debates."—Peter A. Coclanis, author of The Shadow of a Dream: Economic Life and Death in the South Carolina Low Country, 1670–1920

"There is growing academic and policy concern about rising inequality in America, and this timely and engagingly written book has the potential to play an important role in those debates."—Jeremy Atack, coauthor of A New Economic View of American History

Editorial Reviews

"An ambitious and rigorous attempt to address some long-overlooked questions about U.S. economic development."—-Helen Fessenden, Econ Focus

From the Publisher

"[Unequal Gains] traces how inequality surged and receded in American history. . . . The book contains an unprecedented graph that goes all the way back to the eve of independence and charts how unequal people's incomes were. . . . This is as much a work of history as it is a work of economics."

Washington Post

"[Unequal Gains] traces how inequality surged and receded in American history. . . . The book contains an unprecedented graph that goes all the way back to the eve of independence and charts how unequal people's incomes were. . . . This is as much a work of history as it is a work of economics."

Washington Post

★ 04/15/2016
Distinguished economic historians Lindert (economics, Univ. of California, Davis; Growing Public) and Williamson (emeritus, economics, Harvard Univ.; Trade and Poverty) denote that the United States has almost always had the world's highest incomes, and that the nation could become the first to gain in economic growth and economic inequality simultaneously. Their brilliant analysis stresses that from 1774 to 1860, and from the 1970s up to the present, income imbalance in America has increased more than in any other country. Factors accounting for the rise in the unevenness since the 1970s include an increase in inequality among those within lower income ranks (incomes have expanded, but not enough to stem off inequality) and the number of years of education a person has attained—along with perhaps the quality of them—has risen more slowly than in other advanced regions. It is shown that the earning gap has affected all social groups in America from the poorest to the richest. Patrons might also consult Robert J. Gordon's The Rise and Fall of American Growth and Thomas Piketty's Capitalism in the Twenty-First Century. VERDICT A masterpiece in quantitative and qualitative economic research destined to become a classic in its field, this work will interest scholars and to a lesser extent general readers for its investigation of income inequality and economic change since the colonial era in the United States, Great Britain, and elsewhere. An accomplished study that belongs in all economic and social history collections.—Claude Ury, San Francisco

Library Journal

2016-03-08
A long-view look at a problem that has been vexing economists and policymakers lately—namely, financial and social inequality. In theory, America is a society not riven by the class divisions of old Europe, and in the beginning, with some exceptions, American colonists were indeed equally not-well-to-do. Independence, write Lindert (Economics/Univ. of California, Davis; Growing Public: Social Spending and Economic Growth since the Eighteenth Century, 2004, etc.) and Williamson (Emeritus, Economics/Harvard Univ.; Trade and Poverty: When the Third World Fell Behind, 2011, etc.), was an expensive proposition, with incomes falling as much as 30 percent. The early republic, however, was an economic phenomenon, and with the steady expansion of the nation into the continental interior, fortunes were built—though, as the authors note, history had a way of intervening, as when the Civil War served as a modest equalizer in the South even as it built still larger fortunes in the North. Of particular interest in this cliometric account are the factors that the authors identify in the making of "the Great Leveling," which followed the Gilded Age and persisted into the 1970s. "While educational attainment, measured as the average years of schooling completed by adults, advanced by nearly one school year per decade during the Great Leveling," they write, "a marked deceleration followed." The lesson here is that education is both a powerful economic engine and a democratizing force. At times critical of the Piketty school of thought, the authors further identify other factors in our present levels of inequality, including the refusal to regulate the financial industry, to fund education, and to tax large inheritances. The opportunities to end inequality are as obvious as C-notes dropped on the ground, they write in closing: "Of course, the fact that they are still lying there testifies to the political difficulty of bending over to pick them up." Some familiarity with economic principles will benefit readers, but its conclusions are both accessible and urgent.

Kirkus Reviews