America’s wealth gap — in 1776

Marketplace Contributor Jul 3, 2012

America’s wealth gap — in 1776

Marketplace Contributor Jul 3, 2012

Tess Vigeland: In Philadelphia this week, people from across the country are gathering in the same spot where the Declaration of Independence was signed a couple hundred years ago. They’re hoping to come up with their own document, outlining the future of the Occupy movement.

All the talk of the 1 percent and the 99 around Independence Hall got us wondering. Back in the days when Thomas Jefferson penned that famous phrase, “All men are created equal,” how equal was America, in terms of income and wealth distribution?

From the Marketplace Wealth and Poverty Desk, Krissy Clark has some answers.

Krissy Clark: Back in the 1770s, in colonial America, nobody was using terms like the 1 percent or the 99.

But if they had, this is what they would have found, according to Jeffrey Williamson, a retired economics professor at Harvard.

Jeffrey Williamson: In 1774, the top 1 percent of households got 9.3 percent of income.

Compare that to America today, when the top 1 percent is bringing in about 20 percent of income. Nine percent, versus 20 percent. Wow.

Williamson: Wow.

Even when you include slaves, Williamson says America was actually the most egalitarian country in the world when it came to the difference between rich and poor.

So what did the founding fathers have to say about that? I called up a guy who should know.

Clay Jenkinson: Hello my dear citizens, this is Thomas Jefferson.

Actually it’s Clay Jenkinson, a historian and Jefferson impersonator. And he says the writer of the famous phrase — “All men are created equal” — thought a lot about income inequality. In a letter to a friend describng the 13 colonies, he wrote “The great mass of our population consists of laborers. The rich, being few and of moderate wealth…”

Jenkinson (Quoting Jefferson): Can any condition of society be more desireable?

Jenkinson says, Jefferson believed:

Jenkinson: If you had a wild gap between the lives of the masses and the lives of the rich, that you would produce the French Revolution.

So why was income so much more equally distrubted back then? A lot of it had to do with the fact that we were a new country, with plenty of land for the farming, and even more out west for the next generation. By the industrial revolution, we were closer to the wide gap between rich and poor that is common today.

I’m Krissy Clark for Marketplace.

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