As we fire up the grills for the Fourth of July, I am reminded of the famous evocation of our last Gilded Age as “the great barbeque.” All were presumably invited, as the Progressive historian Vernon Parrington noted in 1927, but “not quite all, to be sure; inconspicuous persons, those at home on the farm or at work in the mills and offices were overlooked; a good many indeed out of the total number of the American people. But all the important persons, leading bankers and promoters and business men, received invitations.”
Almost a century later, Parrington’s parable of inequality seems as apt as the day it was written. Consider the latest data on patterns in global wealth, from Credit Suisse’s 2012 Global Wealth Report. Of the 166 countries included in the report, the United States is—unsurprisingly—one of the wealthiest, with a mean (average) wealth-per-adult of about $260,000—making it the seventh-richest nation on that list.
But that is a pretty coarse measure; the mean simply divides national wealth by the national adult population. A more telling benchmark is median wealth—the point at which half adult American are worth more and half are worth less. On this metric, the United States (at only about $39,000) drops to twenty-seventh. Indeed, the yawning gap between the mean and the median is a pretty good measure of wealth inequality. If average wealth is $260,000, but half of all adults have a net worth of less than $39,000, a lot of wealth is being hoarded at the very top.
The graphic below plots all 166 countries. Mean or median wealth runs up the vertical axis, so that the richest countries are at the top of the graph. And the Gini index of inequality (a measure that runs from 0 to 100, with 0 indicating perfect equality) runs across the horizontal axis, so that the most unequal countries are to the right. The United States, the red dot, stakes out the upper right: rich and unequal. All of the countries richer (higher on the graph) are also more equal in their distribution; the few that are more unequal (those to the right of the United States) are also much poorer.
The relative position of the United States is clearer if we narrow our focus to a smaller universe of rich and democratic peers. Of these 166 countries, twenty-nine have a mean adult wealth of $100,000 or more. In this company, the United States ranks twenty-seventh of twenty-nine on median wealth, and dead last on the two inequality measures: the Gini index and the ratio between mean and median wealth.
“It was a splendid feast,” as Parrington noted, “…the eating and drinking went on till only the great carcasses were left. Then at last came the reckoning. When the bill was sent in to the American people [they] discovered they had been put off with giblets while the capitalists were consuming the turkey.”
Colin Gordon is a professor of history at the University of Iowa. He writes widely on the history of American public policy and is the author, most recently, of Growing Apart: A Political History of American Inequality, published by the Institute for Policy Studies a twww.inequality.org